“Diamonds are forever”. This phrase was a powerful coinage by DeBeer, an English diamond manufacturing company and N. Y. Ayer, a leading advertising agency in the ’40s. These words speak volumes of the durability of a piece of diamond.
Though recently, this very word has been threatened in no small way.
The reason is simply that natural diamond deposits are depleting and it is becoming increasingly difficult to mine them. It is noteworthy to mention that the process of mining natural diamond is a hazardous and risky one.
To that end, the value of natural diamonds is on an upward trajectory. It is becoming increasingly difficult to get pieces of natural diamonds, thanks to the 150 km below the earth crust location and the ever increasing environmental hazard involved in mining it.
Diamond mining pit in the town of Aykhal, Yakutia, Russia.
The increasing environmental regulations on the mining of natural diamonds has paved way for synthetic diamonds (lab grown diamonds) to gain greater market penetration.
As at 2016, the synthetic diamond market was valued at $16.8 billion. It is forecasted that between 2018 and 2023, there will be a moderate increase in the CAGR of synthetic diamonds market by about 7.5%.
The demand for synthetic diamonds in the jewelry segment of the market is still in its grooming process. The electronics segment has a different story to tell.
Synthetic diamonds have become a major component in the manufacture of electronics. This is largely because of its ability to diffuse heat when used as semiconductors in the manufacture of electronics.
In 2018, the Semiconductor Industry Association posted sales of about $122.7 billion, a 13% increase from 2016 sales.
This speaks volumes of the economic potentials embedded in synthetic diamonds in the nearer future, especially now that it has found application in smart technologies such as virtual reality and artificial intelligence.
The use of synthetic diamond as a semiconductor in the manufacturing of electronics has provided a great opportunity for top industry players. Some of these players include Element Six, Scio Diamond Technology Corporation, AOTC, Applied Diamond Inc, D.NEA, ILJIN Diamond and Washington Diamonds Corporations.
The players are expected to increase in the coming years especially from the electronics industry.
There’s almost no technological gadget that does not have semiconductor components as part of its electronics configuration. From Cars to coffee makers, even in smaller and very powerful devices such as Radio Frequency Identification Devices (RFID).
The mere fact that synthetic diamonds are technologically driven is enough for them to outperform natural diamonds in the fight for market relevance.
Demand for ultra high performance in modern electronics manufacturing.
Asia has been at the forefront of electronics manufacturing for years. This has naturally put them as the leaders in the global synthetic market. More specifically, China’s electronics manufacturing industry saw over 15% year on year increase by the first half of 2017.
Asia has enjoyed over 50% of the market share as regards synthetic diamonds. Their end-user applications of this technologically driven gemstone in Asia contributed to this.
However, inroads are being made in America and Europe. Although Europe has been slow due to an economic crisis, the market is set to increase in the coming years.
Africa and the Middle East are gradually coming into the fray. And this is how synthetic diamonds are taking over the diamond market.
According to Fares D. Alahmar, a GIA expert, synthetic diamonds are not coming, they are here. Regardless of the slow encroachment rate, because of the technological inclinations of this synthetic diamonds, they will continue to shake the market until such a time when natural diamonds will pale into less significance compared to the notoriety of synthetic diamonds.
“The availability and affordability of synthetic diamonds as compared to their natural counterparts will play a major role in disrupting and reshaping the diamond market.” says Fares D. Alahmar. “Though still considered expensive, synthetic diamonds are about 20 – 30% less expensive than their natural counterparts. The price is expected to further dip with competition rising and influx of more market players”.
With De Beers selling of their Snap Lake Diamond Mine in Canada and a top giant in glass jewellery manufacturing, Swarovski, joining the man made diamond market, there’s so much to expect in the positive prospects that the synthetic diamond market holds.
It will take almost a decade before a significantly massive overthrow of the market by synthetic diamond happens. This is largely because synthetic diamonds produces about 10% of the diamonds (a meager quota) as at early 2018.
However, with more industries and players signing up, there is expected to be a rapid increase in the amount of synthetic diamonds injected into the diamond market. Depending on the way these factors play out, this market overthrow could be expedited or stalled.
Whatever happens, the synthetic diamonds market is giving the natural diamond market a good run for their money, and this competition is expected to favor the former.