--- title: "The Ultimate Material for Chips? Diamonds, Once Spurned by Love, Are Being Revived by AI" type: "News" locale: "en" url: "https://longbridge.com/en/news/287894587.md" description: "As power consumption of AI chips climbs and traditional cooling approaches physical limits, diamond—boasting thermal conductivity roughly four times that of copper and eight times that of aluminum, along with a thermal expansion coefficient highly compatible with chips—has emerged as an ideal heat dissipation material. NVIDIA has announced the adoption of a “diamond composite + liquid cooling” solution, which, combined with China’s 63% share of global production capacity, has triggered a sector revaluation. Huaan Securities estimates that the global market size for diamond heat dissipation will reach approximately RMB 9.7 billion in a conservative scenario by 2032, and up to RMB 97.4 billion in an optimistic scenario" datetime: "2026-05-28T09:52:14.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/287894587.md) - [en](https://longbridge.com/en/news/287894587.md) - [zh-HK](https://longbridge.com/zh-HK/news/287894587.md) --- # The Ultimate Material for Chips? Diamonds, Once Spurned by Love, Are Being Revived by AI The heat dissipation bottleneck in AI computing infrastructure is pushing lab-grown diamonds from a “love story” narrative toward a “computing power logic.” On May 28, the Wind Lab-Grown Diamond Concept Index surged more than 13% in a single day, with Sifangda and Huanghe Whirlwind hitting their daily upper limits, and Huifeng Diamond rising over 20%. Over a longer timeframe, the index has accumulated an 87% gain year-to-date. **The core of this rally is no longer jewelry consumption; rather, capital markets are beginning to reprice the industrial attributes of diamond.** Huaan Securities points out that as power consumption and heat flux density of AI chips continue to rise, traditional cooling solutions are gradually approaching their limits, while diamond is entering high-end chip cooling systems thanks to its ultra-high thermal conductivity. A report released by the firm in January stated that diamond’s natural thermal conductivity reaches 2000–2500 W/(m·K), about four times that of copper and eight times that of aluminum. This means that under identical conditions, **diamond’s heat dissipation efficiency far exceeds that of traditional materials, holding promise to break through the current physical bottlenecks in chip cooling.** Meanwhile, narratives within the NVIDIA supply chain have further strengthened market expectations. In February this year, NVIDIA announced that its next-generation GPUs would adopt a “diamond composite + liquid cooling” heat dissipation solution; Jensen Huang has also engaged in industrialization discussions with Chinese diamond heat dissipation material companies. ## AI Chips Are Hitting the “Cooling Wall” The core contradiction facing AI chips is becoming increasingly direct: **the stronger the computing power, the higher the power consumption; and the higher the power consumption, the closer heat dissipation gets to the performance ceiling.** Huaan Securities notes that as chip integration increases and dimensions shrink, chip performance continues to strengthen, but power consumption and heat generation rise in tandem. Related research shows that for every 18°C increase in the operating temperature of semiconductor components, the failure rate increases by two to three times. This means that high temperatures not only lead to degraded chip performance but also shorten device lifespan, posing safety risks and additional energy consumption. In some high-performance scenarios, chip heat flux density has already reached 150 W/cm², and in applications such as airborne radar, it can be as high as 10¹⁰ W/cm². In recent years, the AI industry chain has significantly increased its focus on heat dissipation. **From air cooling to liquid cooling, and from heat pipes to vapor chambers (VC), the entire industry is searching for more efficient cooling solutions.** **However, the problem is that traditional materials are gradually approaching their physical limits.** Although air cooling is low-cost and simple in structure, its effectiveness is increasingly limited in high-load AI chip scenarios. While liquid cooling offers higher efficiency, it ultimately still requires superior thermally conductive materials as a foundation. It is precisely for this reason that the market is beginning to re-examine diamond, a material long overlooked in the past. ## Why Diamond Has Suddenly Become an “AI Material” The core logic behind this rally lies in the fact that **diamond’s thermal conductivity far surpasses that of traditional heat dissipation materials.** According to data from Huaan Securities, diamond’s natural thermal conductivity reaches 2000–2500 W/(m·K), approximately four times that of copper and more than eight times that of aluminum. Previous industry information also indicated that its thermal conductivity is about five times that of copper and ten times that of silicon. **More critically, diamond not only “conducts heat quickly” but also offers better “thermal matching.”** A major issue with traditional heat dissipation materials is that different materials expand and contract at different rates after long-term thermal cycling of chips, which can easily lead to interface delamination and reduced reliability. In contrast, diamond’s coefficient of thermal expansion is only 1.0–1.5×10⁻⁶/K, highly compatible with core semiconductor materials such as silicon and silicon carbide. This means that **even after tens of thousands of temperature cycles, diamond heat sinks can maintain interface stability, helping to address heat dissipation reliability issues during long-term operation of high-power chips.** It is for this reason that diamond is gradually moving from traditional industrial materials into semiconductor packaging and heat sink systems. ## **NVIDIA Ignites the Narrative, Lab-Grown Diamonds See a “Computing Power Revaluation”** **What truly accelerated the fermentation of this logic was NVIDIA.** In February this year, NVIDIA announced that its next-generation GPUs would adopt a “diamond composite + liquid cooling” heat dissipation solution, serving as a key catalyst for this round of the lab-grown diamond rally. According to disclosures from diamond material company “Chaoying Diamond,” **the diamond-copper composite material developed by the company has passed verification within the NVIDIA supply chain and can be used to address high power density heat dissipation issues in AI chips.** Previously, during Jensen Huang’s first visit to China in 2026, he also discussed the industrialization of diamond wafers with the company’s CEO, Zhu Yanhui. Due to NVIDIA’s dominant position in the AI chip market, this industrial signal rapidly expanded the market’s imagination regarding diamond heat dissipation. Data from TrendForce shows that NVIDIA’s GPU share in the AI server market reached 75.9% in 2025. At the same time, China already possesses a global production capacity advantage in the lab-grown diamond sector. The “2025 Lab-Grown Diamond Industry Development Report” shows that global rough lab-grown diamond production capacity is approximately 40 million carats, of which China’s capacity is about 25.2 million carats, accounting for roughly 63%. This means that the lab-grown diamond industry, previously viewed by the market as suffering from “overcapacity,” is now being repriced as part of the AI computing infrastructure chain. ## After the “Consumption Bubble,” How Far Can the “Heat Dissipation Revaluation” Go? In recent years, the lab-grown diamond industry experienced a typical bubble burst: the market once firmly believed it would disrupt natural diamond consumption, but rapid supply expansion and continuous price declines led the industry into overcapacity. This time, however, the market’s focus has shifted from “consumption” to “technology.” Huaan Securities points out that **diamond heat dissipation technology is still in the early stages of development, with potential for continued expansion of applications.** Estimates show that **in a conservative scenario, the global market size for diamond heat dissipation will be approximately RMB 9.7 billion by 2032, while in an optimistic scenario, it could reach RMB 97.4 billion.** The market is repositioning diamond from jewelry and industrial materials to high-end heat dissipation systems such as AI chips and semiconductor packaging—this is a valuation revaluation driven by a “shift in industrial identity.” Market movements may always outpace the industry itself. The current rally reflects more of the long-term potential space rather than realized performance. 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