On November 4, NVIDIA’s stock price plummeted nearly 4% in a single day, evaporating $1.4 trillion in market value. Behind this is the Chinese Ministry of Commerce’s notice on export controls for certain industrial-grade diamonds. This material, praised as “extremely smart” by Russian media, is the core lifeline of chip manufacturing, with over 77% of global supply coming from China. How will this industrial chain game change the landscape?
Industrial-grade diamonds are the “industrial teeth” of chip manufacturing, essential for key processes such as wafer cutting and photolithography lens production. According to data from the U.S. Geological Survey, over 77% of industrial-grade diamonds from 2020 to 2023 came from China, with 99% used in chip production. Zhecheng in Henan controls 95% of global production, with an annual output of 22 million carats, forming an absolute advantage.
This time, China is not “cutting off supply” but rather implementing precise controls, allowing exemptions for high-end products with defect rates below 10 ppb. After the new regulations were announced, American customers specifically traveled to Zhecheng to pick up 5-carat powder diamonds, highlighting market dependence. Russian experts commented that compared to rare earths, which impact the “skeleton” of manufacturing, industrial diamonds choke the high-tech “throat,” making it difficult for competitors to bypass, given that China holds 37% of global patents.
This export control is an inevitable part of the global industrial chain restructuring, showcasing China’s strength in basic materials while exposing the imbalances in some countries’ industries. The healthy development of the global industry relies on collaborative cooperation rather than unilateral blockades. China’s increased initiative in basic industries will drive changes in the landscape, and countries accustomed to “choking” others need to reassess their cooperative stance.