Editor’s Note
The rapid rise of lab-grown diamonds, now producible in a week versus nature’s billion-year process, is reshaping the gem industry. As technology slashes costs, this synthetic alternative presents a profound challenge to the traditional diamond trade.
While it takes over a billion years for natural diamonds to form on Earth, synthetic diamonds can be produced in just one week.
According to Marty Hurwitz, Chairman of the Synthetic Diamond Trade Organization, the emergence of these lab-grown diamonds is causing significant disruption to the traditional industry.
Although synthetic diamonds began appearing in the gem market over a decade ago, recent technological advancements have drastically reduced production costs.
Currently, a 3-carat artificial diamond costs only 7% of the price of a natural diamond of the same size. Data from Tenoris shows that lab-grown diamonds now hold a 17% market share by sales volume in the U.S. retail market, a sharp increase from 3% in 2020.
Over 70% of the world’s lab-grown diamonds used in jewelry are produced in China, with Henan Province at the heart of this industry.
China’s pivot to diamond production was driven not by jewelry demand but by geopolitical factors, following the Soviet Union’s halt of industrial diamond supplies in the early 1960s.
By the 1980s, Henan had become a hub for industrial diamond production. It is only in the last decade that Chinese companies began shifting to the more profitable jewelry business.
Today, most synthetic diamonds produced in China use the High-Pressure High-Temperature (HPHT) method, with an increasing number of manufacturers adopting Chemical Vapor Deposition (CVD) for larger gems.
After initial processing, these products are shipped to Surat, India for polishing, then sent to trading hubs like Antwerp or Dubai before finally reaching consumers.
However, due to tariff marking practices that typically indicate the country where a diamond is polished, few consumers are aware of China’s central role in diamond production.
China’s diamond industry is strategically important as it is used in military and defense equipment. Norinco, a Chinese state-owned arms manufacturer, even operates a lab-grown diamond business through its own jewelry brand.
In 2018, De Beers, a giant in the natural diamond industry, established the lab-grown diamond company Lightbox Jewelry to carve out a niche and preserve the luxury status of expensive natural diamonds. However, this move triggered price competition, ultimately driving down natural diamond prices.
By the end of 2024, De Beers’ diamond inventory had reached $2 billion, its highest level since the 2008 financial crisis.
The price drop for lab-grown diamonds has been staggering. In 2020, the retail price for a 3-carat lab-grown diamond was about $28,900. However, by Q2 2025, the price had fallen to $3,900, only one-eighth of its previous level. As Chinese companies advanced their technology and lowered retail prices, Lightbox lost its competitive edge and ceased operations this year.
In China’s Henan Province, the provincial government had to intervene, establishing a new diamond association to control price wars, similar to its actions in the electric vehicle industry. One of the association’s first measures was to set a minimum price for rough diamonds at $15 per carat.
David Kellie, CEO of the Natural Diamond Council, acknowledged the challenges posed by lab-grown diamonds but argued that the main cause of the price decline is the supply-demand imbalance following the pandemic.
The emergence of lab-grown diamonds has had a positive side effect: the democratization of diamonds. Ankur Daga, co-founder of the online jewelry company Angara, expressed amazement at the popularity of synthetic diamonds.
The sharp rise in gold prices has also changed the cost structure of engagement rings. For many people buying lab-grown diamonds today, the most expensive component is no longer the diamond itself, but the gold setting. This shows that lab-grown diamonds are not only transforming the market but also redefining how consumers perceive luxury and value in jewelry.
