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This publication serves as the first in-depth thought
leadership report from DMCC (Dubai Multi Commodities
Centre) on the lab-grown diamond (LGD) industry. It
discusses how this nascent product will shape the
Future of Trade, gathering insights from key industry
leaders on the opportunities and challenges brought
about by LGDs at all levels of the value chain. The
report leverages key findings from the inaugural Lab-
Grown Diamond Symposium in Dubai in July 2023,
which assembled influential industry leaders and
featured insightful panel discussions addressing critical
challenges and opportunities, evolving trends, new
applications, economic dynamics, branding strategies,
sustainability concerns, and industry reputation.
EXECUTIVE
SUMMARY

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MAIN
FINDINGS

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The lab-grown diamond sector has undergone remarkable
growth over the past five years. However, recent growth
deceleration coupled with increased production has prompted
reflection within the LGD industry about its future trajectory.
Amidst robust volume expansion, LGD prices faced downward
pressure, raising concerns about the industry’s sustainability.
This has catalysed a collective drive among industry leaders to
pivot towards value creation and craft an actionable path forward
for a cost-effective technology product to thrive in the luxury
market. The challenge is to translate insights into ongoing
discussions and sustainable impacts across the LGD value
chain, driving the Future of Trade.

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The LGD sector has
reached a global
retail sales value of
USD 12.24 billion in
the past five years

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A BRIEF HISTORY
OF LAB-GROWN
DIAMONDS

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The journey of LGDs began in the early
1950s, pioneered by General Electric (GE)
and ASEA using the High Pressure High
Temperature (HPHT) method. Initially focused
on industrial use, LGDs gradually fulfilled
industrial diamond demands. The current
industrial LGD capacity greatly surpasses
natural diamond production.

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Advancements in technology enabled the production of gem-quality
LGDs in the 2000s, initially competing with natural diamonds in terms
of cost. Over the last decade, production costs decreased, propelling
the growth of gem-quality LGDs significantly. The optimal size and
quality of diamonds shifted, maximising industry margins.
Emergence of gem-quality LGDs overcame concerns about
undisclosed mixing with natural stones. Factors like De Beers’ entry
into the LGD space, FTC guidelines clarifying LGDs as diamonds, and
reputable grading laboratories contributed to the exponential growth of
the LGD market.
While the overall jewellery market witnessed substantial expansion,
LGDs outperformed with a compound growth rate of over 50%.

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THREE KEY ENABLING FACTORS FOR GROWTH:
The entry of De Beers into the LGD space with the launch of
LightBox gave a tremendous boost to the legitimacy of LGDs as a
product in the eyes of consumers.
The FTC guidelines, which clearly stated that LGDs were
diamonds, paved the way for sale of LGDs with full disclosures.
Reputed diamond grading laboratories started grading LGDs, which
further reinforced the equivalence of LGDs as a diamond as they could
now be purchased with the same certificate as any other diamond.

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By the 2000s, it became feasible to produce
gem quality LGDs using either the HPHT or
Chemical Vapour Deposition (CVD)
technology. However, the cost of producing
the gem quality LGDs was the same, if not
higher than that of similar natural diamonds.

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As technology improved, so did the “sweet spot”, i.e., the size and
quality of diamonds which provided the industry with the best margins
shifted from polished stone size of 0.2-0.25 carats about a decade ago
to currently at above 2 carat polished stone weight.
The start of this spurt was visible in 2019, before the Covid crisis, but
exponential growth continued after the easing of pandemic lockdowns.
The overall jewellery market growth started slowing towards the end of
2022 on the back of interest rate hikes, although the LGD industry was
still able to gain market share worth an estimated 19% of the US
jewellery retail market. However, the slowdown in the growth rate
became more visible in 2023 and coincided with additional production
capacity coming online, leading to pricing pressures.
The overall effect of this was that prices for LGD polished have shown
declines of nearly 60% since August 2022. Despite this correction, the
industry remains profitable for all stakeholders.

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AVERAGE LGD PRICE
Average LGD price showing a decline of 60% from May 2022
60%
decline
Source: Tenoris.BI

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LOOSE NATURAL & LGD
SHARE OF SOLD UNITS
Loose LGD diamonds share of units sold crossing that of natural in July 2023
50%
tipping
point
Source: Tenoris.BI, Edahn Golan

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FROM GROWTH
SPURT TO
GROWING PAINS

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The gem-quality LGD industry is navigating a phase of
transition. It adapts to slower growth and market shifts in the US
while exploring untapped markets like China, Europe, India, and
the Middle East. Dubai established itself as a global LGD trade
hub, leveraging DMCC’s expertise in trading, technology, and
traditional commodities including natural diamonds. The first
LGD Symposium in Dubai provided a strategic platform to
assess market challenges, identify drivers for long-term
success, and develop collaborative solutions. As the LGD sector
matures, the symposium served as an ideal arena to foster
discourse and action for industry-wide prosperity.

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LGD
SYMPOSIUM
HIGHLIGHTS

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• The keynote address was delivered by Tom Chatham, Chairman of
Chatham Created Gems, a pioneering figure in laboratory-created
gemstones, particularly emeralds. Chatham, with a wealth of experience
spanning over five decades, played a pivotal role in persuading the FTC to
abandon the term ‘synthetics’ when referring to laboratory-created gems.
• Chatham cautioned against repeating the mistakes witnessed in the lab-
grown emerald industry, namely fierce competition and aggressive retail
tactics that resulted in a race to the bottom in emerald prices.
• This uncontrolled price erosion caused retailers to struggle to attain
expected profits, leading to the eventual decline and discontinuation of lab-
grown emerald products.
• On the production front, Chatham stressed the importance of stringent
controls on intellectual property.
• Chatham urged LGD industry players to substantiate their ‘green’ claims
and align with increasing scrutiny from the FTC.
Past Mistakes
and Future Problems

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• Toby Cruse from leading LGD producer Diamond Foundry producer
Diamond Foundry provided valuable insights as both a Silicon Valley
disruptor and an early entrant to the LGD sector.
• He predicted that technological advancements would lead to the evolution
of growing technology, transitioning from the current maximum 4-inch
wafer to up to 8-inch wafers in the future, accompanied by decreasing
production costs.
• This trajectory is expected to transform technology companies into
significant LGD buyers, while their emphasis on stringent product quality
will remain unwavering.
• From a jewellery industry standpoint, Diamond Foundry’s research
indicated stable retail prices accompanied by demand growth. The fiercest
price competition was identified within the wholesale sector, where
manufacturers competed among themselves.
• Diamond Foundry stressed that substantiating sustainability and neutrality
claims is imperative, cautioning against the practice of ‘greenwashing.’
Tracking Recent
Trends in Lab-Grown

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• Discussions on industry economics were overshadowed within the last year
by 50% price declines.
• The growth in LGD volumes has been driven by production in India and China,
and this trend is anticipated to persist. Most LGD producers have treated
LGDs as commodities, whether in their rough or polished form, primarily at the
wholesale level, contributing to the decline in prices. While retail demand
remains robust, consumer sales prices have been less affected.
• The decline in production costs, owing to technological advancements, has
maintained industry profitability thus far. However, the sector faces the risk of
established, less efficient, producer based companies being driven out of
business by further technological advancements and price reductions.
• The LGD industry is fundamentally a technology business, distinct from the
natural diamond industry. Success requires differentiation through branding
and strategic partnerships. Treating LGDs as commodities would only lead to
price declines akin to commodities.
Industry
Economics

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• The focus of industry discourse has shifted toward effectively promoting
LGDs to consumers. Education regarding the distinctive offerings of
LGDs is crucial, along with embracing the idea that LGDs are an
evolution of natural diamonds and represent love.
• Stakeholders advocate moving away from purely transactional sales of
individual stones to creating desire and value through innovative design,
branding, and marketing.
• The decline in material costs could potentially enable brands and
retailers to invest more in branding efforts, but excessively low prices
might render these investments unfeasible.
• While the industry acknowledges the imperative to “sell the painting, not
the paint,” the onus lies on retailers, jewellers, and brands to engage
consumers directly.
Marketing
and Branding

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• In the LGD industry, sustainability encompasses a broad spectrum of topics
beyond carbon neutrality. While consumers’ purchasing decisions are not yet
heavily influenced by sustainability factors, such credentials are pivotal for
reinforcing industry legitimacy from a marketing standpoint.
• Selling reputation and brand equity holds greater importance than merely
marketing “sustainability”. However, the industry must avoid over-relying on
sustainability claims for marketing.
• Authentic sustainability must evolve from a marketing tactic to a genuine
commitment practiced by companies. A critical consideration is the
avoidance of a two-tiered market, where some entities can substantiate their
sustainability claims through documentation and audits, while others cannot.
• The consensus favours industry-wide sustainability standards to foster a
positive consumer image, necessitating strong leadership to drive this
initiative forward.
Sustainability
and Reputation

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LAB-GROWN
DIAMOND
EVOLUTION

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• LGDs have made their mark in the US consumer psyche
by leveraging the association with natural diamonds, a
strategy that has yielded remarkable success in recent
years. Yet, as the market penetration matures, LGDs need
to evolve, transcending their current role and emerging as
a distinct industry in their own right.
• Immediate avenues for LGD industry expansion include
increasing market penetration.
• Further avenues for growth lie in penetrating markets like
China, India, and the Middle East. These markets, though
substantial, come with unique challenges, particularly a
consumer focus on value.
SHIFTING THE
INDUSTRY’S
TRAJECTORY

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• Unlike natural diamonds, LGDs present an opportunity
where the diamond’s cost is more affordable in relation
to the total jewellery value. This presents designers with
the creative liberty to experiment with diamond usage in
novel ways
• The affordability of LGDs opens doors to innovative
designs in various products, including handbags,
sunglasses, shoes, and phones.
• This shift from ‘product driven’ to ‘innovation driven’
models can only be fully harnessed through increased
investment in innovation.
• Strategic innovation investment is crucial to propel the
LGD business into its next phase of growth.
SHIFTING
DYNAMICS:
FROM ‘PRODUCT
DRIVEN’ TO
‘INNOVATION
DRIVEN’

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• The conventional natural diamond mindset of producing
polished diamonds and maintaining large stockpiles
becomes impractical for LGD producers due to steep
stock losses.
• LGDs can shift their operations to become demand driven.
Adopting a just-in-time (JIT) model allows for rough
diamonds to be selected based on orders, followed by
lasering, polishing, and fine jewellery assembly within a
short timeframe.
• Implementing the JIT model requires investment in
systems, processes, and personnel training, potentially
necessitating closer proximity to end consumers.
• This shift embodies a mindset of innovation and adaptation,
moving beyond previous generations’ paradigms.
TRANSITION
FROM ‘SUPPLY
DRIVEN’ TO
‘DEMAND LED’

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• The LGD industry has effectively harnessed its
environmentally friendly reputation to market its products.
• While this strategy has proven successful, the industry’s
growth brings with it heightened scrutiny. The time has come
for the LGD industry to shift its focus from merely comparing
itself to natural diamonds and instead substantiate its own
“green” credentials.
• Staying proactive in meeting sustainability requirements is
imperative. Emerging businesses should establish facilities
with sustainability as a foundational principle, encompassing
both processes and human resource decisions.
• A unified set of standards for claiming sustainability across
the industry would enhance consumer communication and
bolster credibility.
BEYOND
‘GREEN-
WASHING’:
UPHOLDING
GREEN
CREDENTIALS

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LAB-GROWN
DIAMONDS FOR
NEXT GENERATION
APPLICATIONS

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• LGDs emerge as pioneers in cutting-edge domains
such as diamond windows, semiconductor use, and
quantum computing.
• Research endeavours centre on mastering growth processes,
minimising defects to parts-per-billion levels, and attaining the
requisite quality for advanced technological applications.
• The allure of LGDs in high-tech applications lies in their
capacity to function within extreme environments, at a
reduced scale, while exhibiting enhanced performance.
• Diamond-based semiconductors surge power density,
facilitate faster, lighter, and simpler device designs, and align
with sustainability discussions, proving more eco-friendly than
silicon while boosting thermal performance within devices.
• LGDs are poised to revolutionise technology, underpinning a
realm of possibilities that extend well beyond the world of
gems and jewellery.
A GLIMPSE
INTO THE TECH
FUTURE

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• The LGD sector represents a fusion of technology and
business, where research investment is intrinsic to its
trajectory. The dynamic landscape of the LGD industry
necessitates consistent investment in technological upgrades
and process enhancement.
• Presently, LGD research predominantly revolves around
cultivating larger and superior diamonds.
• However, the potential for LGDs stretches far beyond their
application in jewellery, encompassing domains like
semiconductors, Electric Vehicles, 5G base stations and
cloud / quantum computing. These spheres represent high-
tech sectors demanding unparalleled consistency.
• By embracing a research-focused approach, the LGD industry
positions itself to explore diverse horizons, capitalise on
emerging opportunities, and ultimately redefine its role within
the broader technological landscape.
FROM
‘OPERATION
FOCUSED’ TO
‘RESEARCH
FOCUSED’

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KEY
RECOMMENDATIONS
FOR THE FUTURE OF
LAB-GROWN DIAMONDS

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 EMBRACE THE IDENTITY OF A TECH INDUSTRY Moving away from the traditional natural diamond pricing model, the industry should
base pricing on value-added attributes and innovation. Branding and marketing will be pivotal in setting LGDs apart and avoiding
commoditisation.
 PRIORITISE PRODUCT INNOVATION LGDs possess inherent flexibility, enabling creative freedom that is unattainable with natural
diamonds. Beyond jewellery, the LGD industry’s potential in technology, particularly in areas like chips and quantum computing, demands
research focus for sustained market leadership.
 REIMAGINE THE SUPPLY CHAIN The LGD supply chain should transition towards an order-driven model, departing from traditional
rough-based limitations. Integrated supply chains can accelerate the transformation from raw material to finished jewellery, reflecting the
adaptable nature of LGDs.
 SHIFT FROM COMPONENT SELLING TO END PRODUCT PROMOTION Departing from the commodity-focused approach, LGDs
should be positioned as an integral part of the finished product rather than individual components. This shift fosters consumer engagement
and highlights the value of the complete jewellery piece.
 FORGE INDEPENDENT LEADERSHIP As the LGD industry matures, it must assert its individuality and independent leadership. Steering
clear of unnecessary disputes, the focus should remain on value addition, showcasing the product’s inherent beauty and focusing on
LGDs’ unique strengths.
 LEAD WITH PURPOSE Industry leaders must rise to the occasion, steering the industry in the right direction. Defining industry standards,
establishing priorities, and fostering an environment of collaboration can shape the LGD industry’s growth trajectory.
KEY RECOMMENDATIONS

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About DMCC
Headquartered in Dubai, DMCC is the world’s most interconnected Free Zone, and the leading trade and enterprise hub for
commodities. Whether developing vibrant neighbourhoods with world-class property, or delivering high performance business
services, DMCC provides everything its dynamic community needs to live, work and thrive. Made for Trade, DMCC is proud
to sustain and grow Dubai’s position as the place to be for global trade today and long into the future.