【Seoul, South】”K Semiconductor’s Stature Soars”… Allod Shines in the 69 Trillion Won Lab-Grown Diamond Market – Jewelry and Gem

Editor’s Note

In this interview, Allod CEO Kang Sung-hyuk draws a compelling parallel between lab-grown diamonds and semiconductors, positioning South Korea’s technological expertise as a future benchmark for the industry.

CEO Interview: Kang Sung-hyuk, CEO of Allod

Kang Sung-hyuk, CEO of Allod, is the second generation to run the diamond business after his father, Kang Seung-ki. / Photo = Allod

“About 80% of the lab-grown diamond (lab diamond) manufacturing process is similar to semiconductor process technology. Just like semiconductors, the day will come when Korean-made lab diamond technology is recognized as the best in the world.”

Kang Sung-hyuk (33), CEO of Allod, speaks with conviction. His confident voice makes listeners nod in agreement.

KDT Diamond, which operates the lab diamond brand Allod, is the first in Korea to successfully develop gem-quality lab-grown diamonds using the Chemical Vapor Deposition (CVD) method.

‘Lab-grown’ literally means grown in a laboratory. Although produced artificially, they are similar to natural diamonds in appearance, physical properties, and chemistry. It is said they look identical even under a microscope. In 2018, the U.S. Federal Trade Commission announced that the definition of diamond includes lab-grown diamonds.

While everything is the same as a natural diamond, the price of a 1-carat lab-grown diamond is about one-fifth that of a natural one. This is why diamonds have become more accessible recently.

According to diamond analyst Paul Zimnisky’s report, the global lab diamond market size, which was around $1 billion (1.3 trillion won) in 2015, reached $12 billion (16.51 trillion won) in 2023. The report forecasts growth to $49.9 billion (68.68 trillion won) by 2025.

Our Technology, Lab Diamonds Developed with Life on the Line

“Lab diamonds can be made in two ways. The High Pressure High Temperature (HPHT) method creates conditions similar to how natural diamonds are formed. As the name suggests, it applies pressure and high temperature to graphite. The CVD method involves placing a ‘diamond seed’ in a vacuum chamber and heating methane gas to crystallize carbon atoms. It’s almost identical to semiconductor layering technology. CVD can produce relatively more stable and higher quality diamonds, but it requires advanced technological capabilities to support it.”

CEO Kang was involved in the entire process from lab diamond development to mass production. When asked if the development was difficult, he answered with a completely serious expression, “We developed it with our lives on the line.” It turned out the development period coincided with the spread of COVID-19. It was no exaggeration to say they risked their lives, as they traveled the world for R&D to the US, India, Singapore, etc., during a time when they weren’t even supposed to go outside.

“It was the summer of 2022. After establishing the mass production system, we opened our first pop-up store at Hyundai Department Store Yeouido. The response was better than expected, generating nearly 100 million won in sales in just 12 days, and a new challenge immediately arose. Now we had to create not just a ‘diamond’ but a ‘brand’.”

Thus, Allod was born. After spending a full 9 months on branding, it made its debut at Hyundai Department Store Trade Center Store at the end of March last year.

“Many first-generation companies that succeeded in diamond production often remain only in synthetic technology. They sell lab diamonds as grown. Because we have been engaged in the jewelry industry for many years, we cover all areas including craftsmanship, design, and branding based on our experience. That is Allod’s unique strength.”

This is the secret to KDT Diamond’s ability to cover both B2B and B2C transactions. Currently, B2C through Allod has a higher proportion, but the long-term plan is to increase B2B. To this end, they are also building a diamond factory in the ‘Surat’ region of India. Surat polishes over 95% of the world’s diamond volume. As a free economic zone with tariff exemptions, it offers many advantages for exports. The factory size is 2,000㎡, targeting production of 36,000 carats in the first year and 100,000 carats annually thereafter. Completion is scheduled for the end of September this year.

Lab Diamonds Made by the World’s Top Semiconductor Powerhouse

Currently, De Beers is the only global brand that possesses its own lab diamond technology and also runs a brand business. LVMH followed suit, establishing its subsidiary ‘LVMH Luxury Ventures’ in 2022 and investing $90 million (about 124 billion won) in the Israeli lab-grown diamond company ‘Lusix’. Many brands like Swarovski and Prada have launched lab diamond lines, but they all source rough stones (processed raw stones) to make products. Thus, having both technology and design is no easy feat.

Domestic brands and jewelry companies also mostly depend on imports for rough stones.

According to On Hyun-sung, head of the Wolgok Jewelry Research Institute, Korea’s synthetic diamond imports are increasing annually: $6.6 million (about 9.1 billion won) in 2021, $9.3 million (about 12.8 billion won) in 2022, and $14.26 million (about 19.6 billion won) in 2023. The lab diamond market size is also growing: 35 billion won in 2021, 50 billion won in 2022, and 80 billion won in 2023. This year’s market size is expected to exceed 100 billion won.

CEO Kang anticipates that once the Indian factory is completed and in-house lab diamond production increases, it will significantly help prevent foreign currency outflow due to diamond imports. He also plans to build a factory in Korea that only produces diamond rough stones in two years.

“Korea is really in a great environment to produce the world’s highest quality lab diamonds. The two most important things for diamond production are electricity and methane gas, and because Korea is already in the semiconductor business, both can be mass-produced at the world’s highest level. Especially the main raw material, methane gas, is of very high purity. The purity of rough stones made in China and India, major global synthetic diamond producers, is 99.99%, but the diamonds we make are 99.99999%. The quality is several levels higher. The potential of Korean lab diamonds is limitless.”

CEO Kang dreams of growing Allod into the representative brand of K-lab diamonds. Supplying rough stones of global quality to companies and becoming the first brand consumers think of for lab diamond jewelry. Looking at Allod’s recent growth, his ambition seems more than just a dream.

“It’s true that it’s not easy for domestic jewelry brands to compete because domestic consumers’ preference for global luxury brands is so high. However, recently K-brands are gaining popularity overseas as their design and product quality are recognized, so Allod will also strive to become a K-jewelry brand loved worldwide.”

Allod has entered all three major domestic department stores and operates 7 stores as of August this year.

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⏰ Published on: August 09, 2024

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