【South Korea】Is It Cheaper Than ‘Half-Price’ Diamonds? The ‘This’ That Makes Lovers’ Eyes Pop Open [The Tech Wave]

The diamond, a symbol of eternity, is universally recognized as the ultimate gemstone. This has led to stable demand and minimal price fluctuations. However, a notable change is occurring in the diamond market recently: the emergence of ‘Laboratory Grown Diamonds’.
Laboratory grown diamonds, as the name suggests, are diamonds cultivated in a laboratory. The term combines ‘lab’ (short for laboratory) and ‘grown’.
Unlike previous synthetic diamonds, laboratory grown diamonds are 100% identical to natural diamonds in physical, chemical, and optical properties. They can only be identified with high-precision, expensive equipment, and can be issued certification using the same grading standards.
Being created in a controlled environment allows them to be produced in a more flawless state than mined diamonds. Most importantly, their price is about 30-70% cheaper depending on size.

Unlike natural stones, their price has the potential to drop further due to advancements in manufacturing technology and supply-demand dynamics. According to the Antwerp Diamond Centre (AWDC), the production cost of lab-grown diamonds fell from about $4,000 per carat in 2008 to around $300-$500 per carat in 2018.
According to global diamond expert analyst Paul Zimnisky, the global lab-grown diamond market was estimated at about $12 billion last year. Furthermore, US market research firm Allied Market Research projected that this market could grow to $49.9 billion by 2030.

Lab-grown diamonds are considered eco-friendly as they prevent the environmental pollutants and unethical practices associated with natural diamond mining. They appeal to consumers not only with a ‘good price’ but also provide a ‘justification’ for consumption.
Natural diamonds have long faced controversies over environmental pollution and labor exploitation during mining, leading to the widespread term ‘blood diamonds’. Additionally, transforming a diamond from rough stone to gem requires significantly more resources compared to other precious metals, involving rock excavation and massive use of water and energy.

In reality, lab-grown diamonds are targeting the psychology of young, value-oriented consumers. This aligns with the ‘Meaning Out’ consumption tendency of the MZ generation, where consumption reveals personal values and beliefs. ‘Meaning Out’ combines ‘Meaning’ and ‘Coming out’, referring to the behavior of making consumption decisions based on taste or political, economic, and social beliefs.
Last year, the Wall Street Journal analyzed that the number of people, especially newlyweds, seeking lab-grown diamonds has increased. A survey by The Knot of over 5,000 engaged adults the year before last found that one in four chose a man-made stone for their engagement ring. Conversely, the proportion who believed the ring must be a natural stone fell 8 percentage points from two years prior to 34%. Notably, Gen Z (28%) considered natural stones less important than Millennials (35%) and Gen X (41%).
A survey commissioned by Korean diamond company KDT Diamond last year found that 41.6% of 2,000 respondents intended to purchase lab-grown diamonds, with only 22.5% responding negatively. Interestingly, those in their 40s and 50s (44.2%) were more favorable than those in their 20s and 30s (34.3%).

Diamonds made in laboratories have been produced for industrial use since the 1950s. With technological advances, by the 2010s, rough stones suitable for gem use began to be produced in earnest. Obtaining a 1-carat natural diamond typically requires thousands of years under high-temperature, high-pressure conditions. However, recent technology has advanced to the point where diamonds can be grown in a laboratory within a few months.
To manufacture diamonds artificially, a base diamond wafer, a so-called diamond ‘seed’, is needed. It’s not about creating from scratch in a factory, but rather a method of growing the diamond, hence the frequent use of the term ‘grown in a lab’.
Lab-grown diamonds cultivate the carbon atoms of natural diamonds using methods like High-Pressure High-Temperature (HPHT) and Chemical Vapor Deposition (CVD). CVD, in particular, has been a groundbreaking breakthrough.

Currently, there are eight countries capable of manufacturing diamonds in laboratories: the United States, India, China, Japan, Singapore, Germany, Israel, and South Korea.
The US, China, and India are prominent in lab-grown diamond production. By production volume, China produces the largest amount (50-60% share), with India closely following. Analysis suggests that due to China’s high volume of lower-quality diamond production, the US and India can be seen as leading the production market.
India considers lab-grown diamonds an important industry at the national level and is fostering it. During his visit to the US last June, Indian Prime Minister Narendra Modi gifted a 7.5-carat Indian lab-grown diamond to US President Joe Biden and First Lady Jill Biden.

South Korea succeeded in production for the first time last year, with about 30 companies known to be involved. Even traditional companies dealing with natural diamonds are jumping into synthetic diamond production.
Some analysis suggests that artificially manufactured diamonds should be noted more for their potential and utility as industrial raw materials than for their intrinsic value. Diamonds have excellent thermal conductivity, high electrical resistance, and heat resistance, leading to significant development of synthetic diamonds as new materials. Nuclear batteries made from synthetic diamonds are also being developed.

Notable companies are emerging in the lab-grown diamond market. Brilliant Earth, a US blockchain-based jewelry company that went public on Nasdaq in 2021, deals in both natural and lab-grown diamonds. Blue Nile, known as a pioneer in online diamond jewelry, is pursuing a strategy of expanding its product line with larger (1-4 carat) and higher-priced lab-grown diamonds.
Abroad, lab diamond brands began appearing from the mid-2010s, including the UK brand Kimai (made famous by Meghan Markle), the French brand Courbet (which received investment from Chanel), and Japanese brands Tera and Primal.
Not only dedicated lab-grown diamond companies but also traditional jewelry companies are rising as key players. In 2021, Danish jewelry manufacturer Pandora, declaring the ‘democratization of diamonds’, completely stopped using natural diamonds and launched its lab-grown diamond line ‘Pandora Brilliance’. Many companies like Swarovski are increasing their sales proportion.
The worries of luxury giants, who have adhered to the scarcity value of natural diamonds, are also growing. Recently, the aversion to lab-grown diamonds has somewhat softened. Luxury brands that were reluctant to use synthetic diamonds are gradually launching products incorporating them.
Tag Heuer was the first in the industry to introduce the ‘Carrera Plasma’ made with lab-grown diamonds. Breitling also launched the ‘Super Chronomat Automatic 38 Origins’ equipped with lab-grown diamonds, announcing a full transition to lab-grown diamonds by the end of 2024.
Particular attention is focused on the moves of LVMH, the world’s largest luxury group.

There is also the possibility of funds flocking to promising companies. A domestic venture capital (VC) representative told the reporter, “We are keeping an eye on investments in lab-grown related startups.”

The lab-grown diamond market is recording over 100% annual growth rates.