Diamonds Instead of Radiators: Chinese Materials for Cooling AI Chips

About 70% of the 2 million carats of synthetic diamonds produced annually by Feng Canjun's factory in Zhengzhou go into jewelry. The entrepreneur is betting on materials for semiconductors, AI servers, and other high-tech applications: "I want to raise the share of products for functional materials above 50% by 2030, and reduce jewelry to a maximum of 30%."

Chinese manufacturers, providing about half of the global supply, are seeking applications beyond jewelry stones: competition is growing, prices are under pressure.

According to the IEA's 2025 report, electricity consumption by data centers will more than double by 2030 – to ~945 TWh, comparable to Japan's annual consumption. Chinese media reported that Huawei and TSMC are exploring diamonds for chip cooling, and Lenovo has released a laptop with a diamond-copper material. Intel's head, Lip-Bu Tan, personally invested in Diamond Foundry. In April, diamond-copper modules from Chinese researchers improved chip heat dissipation by 80% and performance by 10%.

Henan Liliang Diamond is redirecting 1 billion yuan ($149.18 million) into a functional diamond project. Henan province accounts for 80% of Chinese production. Feng has 550 machines costing ~3 million yuan each; one produces 120 carats in six days – a process that takes billions of years in nature. Since 2019, production has increased tenfold, reaching 2 million carats by 2025 – about 9% of De Beers' production.

China has included the technology in export control: 2024 restrictions, 2025 expansion with a one-year delay. "Diamonds may increasingly become part of the conversation about strategic trade policy around semiconductors and rare earth metals," said Manan Goenka of Ken Research.

The margin on jewelry diamonds is 30–40% compared to ~50% for industrial ones. The commercial potential remains uncertain and risks leading to overproduction, but Feng is optimistic: "This will be a market worth billions or even trillions of yuan."