Under the encroachment of lab grown diamonds, natural diamonds are in the most sluggish stage in history. However, the cultured diamond market is also not optimistic. As producers continue to flood into the market, the involution is becoming increasingly fierce.
On Wednesday local time, WD Lab Grown Diamonds, the second largest man-made diamond producer in the United States, filed for bankruptcy and became the biggest casualty of the industry's infighting. The company has total liabilities of $44 million and total assets of $3 million.
The one who beat WD Lab Grown Diamonds is probably a fellow from China.
According to data compiled by "Financial Eleven", Henan is the world's largest lab-grown diamond production base. In the past few decades, Zhengzhou City, Xuchang City, Nanyang City, Shangqiu City and other places in Henan Province have formed a synthetic diamond industry cluster integrating R&D, production and sales. Around 2016, with the maturity of laboratory-grown diamond technology, the artificial diamond industry quickly entered this new field. In 2022, China will contribute half of the output of the global cultivated diamond industry chain, 80% of which will come from Henan.
Even diamond analysts said that WD was already a leader in the industry, and its collapse means that "it will be difficult for any company to compete with Chinese and Indian manufacturers."
Founded in 2008, WD was once a leader in shaking up the global diamond industry, with revenue reaching US$33 million last year. The company has developed a technology called chemical vapor deposition, which sprays evaporated materials onto the surface to create dazzling lab-grown diamonds that are exactly the same color as natural diamonds.
Lab grown diamonds are posing a huge threat to the natural diamond industry. The physical and chemical properties of the two are exactly the same. Measured by the 4C standards (color, clarity, cut, carat), cultured diamonds can fully meet the standards. You can’t tell the difference between natural diamonds and cultured diamonds with the naked eye. Generally, It's also difficult to detect the difference with instruments, but the latter is much cheaper. With inflation high, many young people in Europe and the United States are giving up on natural diamonds and turning to Lab Grown diamonds.
However, the price of lab-grown diamonds has plummeted in recent years due to overproduction. In the past seven years, the decline in Peiyuan diamond prices has expanded by three cups. In the U.S. market, the price per carat of cultured diamonds is currently only 15%-25% of that of natural diamonds.
Diamond Foundry, another large US laboratory-grown diamond producer, has begun to seek development avenues outside the jewelry industry. Company CEO Martin Roscheisen told the media in August this year that as production costs continue to decrease, Diamond Foundry plans to provide diamond-based chips for the semiconductor industry.
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