Northeast Securities: AI cooling drives the diamond industry to reevaluate domestic substitution and accelerate high-end transformation

The Zhitong Finance App learned that Northeast Securities released a research report saying that short-term mass production of diamond-copper composites has the best performance flexibility. Medium- to long-term CVD single-crystal equipment and domestic replacement of large-size wafers are the core main line, and companies that have passed leading computing power supply chain certification are expected to face valuation revaluation. The growth prospects for the diamond cooling circuit are clear. Multiple benefits, such as iterative computing power and hardware, intergenerational advantages in material performance, and supply advantages for the domestic industry, support each other, and jointly promote the quantitative expansion of the industry market size. The three types of traditional superhard materials, equipment companies, and new material startup manufacturers form a differentiated competitive pattern.

The main views of Northeast Securities are as follows:

AI computing power cooling reconstructs industry logic, and domestic alternatives accelerate the seizure of high-end racetracks

The demand logic of the diamond industry has ushered in a fundamental restructuring. The traditional abrasives business is growing steadily, AI computing power cooling has opened up 240 times incremental space, and the industry is showing a structural differentiation pattern of overcapacity at the low end and a scarce supply of semiconductor-grade CVD diamond heat sink. Industry competition has been upgraded to competition for comprehensive strengths such as equipment self-research and high-purity crystal processes, and barriers to leading companies that have mastered MPCVD equipment and the ability to prepare large 8-inch wafers continue to be consolidated. Currently, the racetrack forms a hierarchical supply pattern of the three major technology routes, which fully covers the computing power gradient cooling requirements. The core profit depends on factors such as the localization rate of CVD equipment, computing power and heat dissipation penetration rate. High-end semiconductor-grade diamonds are the core profit moat. Short-term mass production of diamond-copper composites has the best performance flexibility. Medium- to long-term CVD single crystal equipment and domestic replacement of large wafers are the core main line, and companies that have passed leading computing power supply chain certification are expected to face valuation revaluation.

Driven by high industry growth: multiple industrial logics collaborate to consolidate the certainty of high growth of the diamond cooling circuit

The growth prospects for the diamond cooling circuit are clear. Multiple benefits, such as iterative computing power and hardware, intergenerational advantages in material performance, and supply advantages for the domestic industry, support each other, and jointly promote the quantitative expansion of the industry market size.

1) On the demand side, power consumption of the Nvidia Rubin platform and future Ultra chips has soared, air cooling has failed, and full liquid cooling has become popular. 3D-HBM stacking increases heat dissipation pressure. Traditional copper and aluminum material bottlenecks are prominent. Diamond has become the core cooling medium with its ultra-high thermal conductivity. It is expected that in 2030, the diamond heat dissipation penetration rate in data centers will increase from 0.1% in 2025 to 12%, and the market size will expand 240 times.

2) On the supply side, China controls more than 90% of the world's HPHT industrial diamond production capacity, but high-end MPCVD equipment is monopolized by overseas, the localization rate of ≥4 inch semiconductor single crystals is less than 20%, and the global supply and demand gap continues to expand.

3) On the policy side, the country introduced a full-chain export control policy, forcing the computing power supply chain to be autonomous and controllable, and clarifying the target for high-end localization rates.

4) On the material side, diamond's core physical properties are leading. It has been incorporated into Nvidia's flagship GPU cooling system, which has remarkable effects in improving heat dissipation and energy efficiency.

5) On the industrial side, the domestic superhard materials industry cluster forms a closed loop, and local computing power vendors introduced relevant solutions in batches.

Competitive landscape and core barriers: production capacity is being solidified in layers, and technical barriers on high-end racetracks continue to rise

The global diamond industry hierarchy is clear and the Matthew effect is remarkable, forming a three-tier hierarchy. Tazian is dominated by US, Japanese and European companies leading the CVD monocrystalline high-end circuit, mastering the complete industrial ecosystem such as 8-inch large-size wafer growth and semiconductor packaging adaptation, and monopolize the single-crystal heat sink core market for ultra-high power chips; the waist is the leading domestic superhard materials company, which relies on HPHT production capacity advantages, focuses on diamond copper composites and 2-4 inch CVD polycrystal heat sink products, and enters the high-end AI server liquid cooling supply chain; small and medium-sized manufacturers at the end focus on low-end abrasives and cultivating diamond tracks, and the product has low added value and homogeneity. Competition is fierce, and industry resources continue to move towards those with high-end process capabilities Leading companies are concentrated. Currently, the industry covers barriers such as self-development and mass production of MPCVD microwave equipment, ppt grade high-purity crystal growth processes, NVIDA/domestic computing power long-term supply chain qualification certification, and diamond-semiconductor heterogeneous bonding precision processing technology, etc., which continue to widen the competitive gap between leading enterprises and small and medium-sized manufacturers. Enterprise growth paths are mainly divided into three categories: traditional superhard material manufacturers rely on HPHT production capacity advantages to lay out the field of CVD high-end heat dissipation materials upward; equipment companies break through MPCVD domestic equipment technology bottlenecks and extend wafer preparation business downward; new material startups focus on the single-crystal heat sink circuit, binding leading AI chip manufacturers to provide customized cooling solutions. The three types of paths form a differentiated competitive pattern.

Risk warning: AI computing power iteration falls short of expectations; CVD process yield increases slowly, etc.