Japan and the United States plan to build a synthetic diamond factory in the U.S. to strengthen the supply of key materials for chips

The United States and Japan are promoting the construction of a synthetic diamond factory in the U.S., which is a priority project in Japan's $550 billion investment plan for the U.S. This move aims to create a supply chain for key semiconductor materials, with synthetic diamonds being core materials for chip manufacturing and high-precision processing.

According to a report by Reuters on Tuesday, this project could become one of the first announced investment projects, with details expected to be revealed before Japanese Prime Minister Fumio Kishida's visit to the U.S. as early as March.

"The U.S. wants to accelerate domestic production of synthetic diamonds," said one informed source, indicating that Washington hopes to establish a U.S.-Japan supply chain by bringing in Japanese companies.

The project involves Element Six, a subsidiary of the global leading diamond company De Beers Group. In addition to the synthetic diamond factory, a large power generation project involving Hitachi Group may also be included in the first batch of projects.

Acceleration of Investment Plan Implementation

Japan is accelerating the implementation of projects under this investment plan. This plan is part of an agreement between Tokyo and Washington to reduce Japan's export tariffs. Investment funds will include equity investments, loans, and loan guarantees provided by state-owned institutions such as the Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI).

Meanwhile, President Trump is raising tariffs on South Korea, accusing it of delaying the adoption of a similar agreement reached last year.

Japan's Ministry of Trade declined to comment on the projects under discussion, stating only that it is negotiating with the U.S. to establish a project pipeline as soon as possible, but no decisions have been made yet. Hitachi stated that it is in discussions with both the Japanese and U.S. governments but declined to comment further.

Strategic Value of Synthetic Diamonds

As one of the hardest known materials, diamonds are crucial for high-precision manufacturing. They are used for ultra-fine polishing in semiconductors, processing hard metals and ceramics in quantum devices, and heat dissipation in advanced electronic systems.

Synthetic diamonds also have dual-use characteristics, which can be used in the production of munitions and radar components. This makes the security of the synthetic diamond supply chain a strategic issue of concern for both the U.S. and Japan.

According to previous reports by Reuters, large infrastructure projects involving SoftBank Group's data center construction are also still on the final candidate list