Diamond Price Discount: Lab-Made Diamond vs Natural Diamond
- 2016: 1-carat lab diamond 17% discount
- 2023: 1-carat lab diamond 73% discount
A recent article in the WSJ had me wondering when we will have the first mass-produced diamond-covered iPhone case… Or! Diamond-filled iPhone; per the article, diamonds are the “holy grail” of semiconductor material. The article cites Mike Grunza, chief executive at WD Lab Grown Diamonds, a portfolio company of Huron Capital Partners:
“‘There’s no material known to man that’ll do the job of transporting electrons and dissipating heat’ better than diamonds.”
So far natural diamond pricing has held strong, but how long will the cartel-controlled supply survive this pricing pressure? Even De Beers Group is making lab diamonds through a subsidiary called Element Six.
Two things to consider: (1) Adoption is increasing. At the end of 2022, lab diamonds accounted for 15.7% of US engagement ring sales, up from 7.9% in the prior year. (2) WD Lab Grown Diamonds, Diamond Foundry and Element Six are all developing diamonds for both jewelry and industry use.
With adoption increasing and the potential for industrial use encouraging cheaper production, what will become of diamonds?