Founder: Functional diamond goes from discretionary consumption to AI materials, achieving dual breakthroughs in heat dissipation and PCB processing.

Founder has released a research report stating that AI is accelerating the upgrade of synthetic diamonds from traditional superhard materials and consumer products to high-value functional materials. China accounts for over 90% of global synthetic diamond production and has established a complete industry foundation around HPHT, CVD, and superhard materials. As AI computing power continues to upgrade, two core physical properties of diamonds are opening up new high-value application spaces: first, using ultra-high thermal conductivity to address the heat dissipation bottleneck caused by the high power consumption and high heat flux density of AI chips; second, leveraging ultra-high hardness and wear resistance to solve drilling processing challenges posed by high-end PCB materials like M9/M9Q, high-multilayer, and quartz fabric. As a result, the synthetic diamond industry is expected to extend from traditional grinding, cutting, and diamond cultivation markets to two new growth curves: AI chip thermal management and high-end PCB precision processing. The main points from Founder are as follows: Diamond Thermal Management: Investment opportunities in advanced thermal management materials amidst rising AI computing power consumption. In the short term, focus on the penetration rate of diamond-copper composite materials in servers; in the medium term, pay attention to the capacity realization of large-sized CVD diamond heat sinks, customer sample verification and small batch orders, as well as the yield and equipment ramp-up of large-sized products like 8 inches, and the upgrade of single GPU value from localized small-area heat sinks to larger area package-level thermal solutions; in the long term, focus on the mass production capability of 12-inch and larger-sized CVD diamonds, integrated with microchannel liquid cooling/packaging structures, and the ability of diamond materials to extend from single heat sink to chip-level, package-level, and system-level thermal management platforms. 1) Definition: Diamond thermal management materials are typically not placed inside transistor circuits but rather on the thermal conduction path near the bare chip (die). Their core function is to rapidly spread localized hotspots of the chip and then transfer the heat to a cold plate or heatsink. They are categorized by integration position into die-level (directly bonded to the back of the chip), package-level (packaging cover plate), and system-level (coordinating with cold plates for uniform heat distribution). Major material types include commercially advanced diamond and metal copper composite materials, polycrystalline and single-crystal diamond heat sink plates, and replacing silicon substrates with diamond substrates. 2) Market Scale: By calculating market space using the number of equivalent NVL72 cabinets 72 GPUs single GPU value penetration rate, under the conditions of 500,000 cabinets and a single GPU value of $50, a 10% penetration corresponds to about 1.26 billion yuan in market space, and 100% penetration corresponds to 12.6 billion yuan; if in the future, the transition from localized small-area heat sinks to larger area package-level thermal management, metallization and precision processing upgrades occur, the single GPU value may rise to $100, and the theoretical total addressable market (TAM) under the same cabinet conditions could further rise to 25.2 billion yuan. Diamond Drill Bits for PCBs: Under the backdrop of advanced PCB high-endization and the introduction of high-hardness materials like quartz fabric, there are industrial upgrade opportunities for diamond drill bits. In the short term, focus on the increased penetration rate of M9/M9Q/M10 for high-end CVD diamond-coated drill bits; in the medium term, pay attention to the penetration of high-hardness materials like quartz fabric, customer verification, and small batch orders for PCD polycrystalline diamond drill bits, as well as yield improvement and cost reductions driving the economic advantages of single-hole drilling; in the long term, focus on the extension of diamond drill bits to advanced packaging substrates and other high-difficulty precision processing scenarios. 1) Definition: Diamond drill bits refer to ultra-hard micro cutting tools that use diamond (single crystal/polycrystalline PCD/CVD diamond coating) as the cutting working layer, paired with a hard alloy or steel matrix, used for precise drilling of microholes in hard and brittle, high-wear materials. 2) Market Scale: According to Frost & Sullivan's forecasts, the global PCB drill bit market is expected to grow steadily from 2026 to 2030, reaching approximately 10 billion yuan by 2030, with a compound annual growth rate of 9.6% during this period. The market share of high-end coated drill bits will increase from 31.3% to 50.5%. Diamond drill bits belong to the high-end precision drill bit category and will directly benefit from the trend toward high-endization. Recommended Companies: Sf Diamond Co., Ltd., Beijing Worldia Diamond Tools, Sinomach Precision Industry Group, North Industries Group Red Arrow, Henan Huanghe Whirlwind, Henan Liliang Diamond, HFZS. Risk Warning: Risks of technological iteration, commercialization falling short of expectations, and certification cycle risks.