Editor’s Note
This article explores a significant shift in the diamond industry, driven by advances in synthetic gemstone technology. As the line between natural and lab-grown diamonds blurs, traditional market dynamics and valuations are being fundamentally challenged.
Diamonds have been a gemstone of human fascination since ancient times. They have been the jewel of marriage proposals, with their value often compared to that of gold.
However, a major shift in the market is now underway due to the innovative synthesis technology developed by researchers at South Korea’s UNIST. As the difference between natural and synthetic diamonds becomes negligible, market demand for synthetic diamonds is rising, leading to a decline in diamond prices.
Diamonds were first discovered and mined in India about 3,000 years ago. The word originates from the Greek ‘adamas’, meaning ‘unconquerable’. In 1772, France’s Lavoisier determined that diamonds are composed of carbon.
The history of the modern diamond market is inseparable from De Beers. Founded in 1888 in South Africa by Cecil Rhodes, De Beers effectively monopolized the global diamond industry throughout the 20th century. It controlled 80-90% of the world’s rough diamond production, allowing it to manipulate market prices and demand at will.
De Beers encountered another opportunity during the 1930s Great Depression in the United States. As diamond demand plummeted, De Beers launched a massive marketing campaign with the famous advertising slogan “A Diamond is Forever.”
While diamonds are not a scarce resource, De Beers cultivated an image of rarity and preciousness by controlling the supply of rough stones.
De Beers’s monopoly structure began to crack in the 2000s with the rise of Russia’s ALROSA and Canadian mines.
However, the most significant factor is the synthetic diamond development technology from South Korea’s UNIST. UNIST succeeded for the first time in the world in synthesizing diamonds at 1 atmosphere of pressure. This enables cost reduction and environmentally friendly production, significantly increasing industrial applicability.
Consequently, the diamond market began to undergo changes. It is predicted that synthetic diamonds will account for 20% of the entire diamond market by this year.
Synthetic diamonds are significantly cheaper than natural diamonds and are difficult to distinguish by appearance. Cases have been frequently reported where even diamond appraisers cannot tell natural and synthetic diamonds apart. Synthetic diamonds are also free from environmental destruction and human rights issues.
For these reasons, UNIST’s technology is changing the paradigm of diamond production and is expected to accelerate the growth of the synthetic diamond market.
De Beers itself has also directly entered the synthetic diamond market. Through its brand ‘Lightbox Jewelry’, it sells synthetic diamonds at relatively low prices.