Crushed by fellow Henan compatriots? The second largest diamond cultivator in the United States files for bankruptcy.

Under the erosion of lab-grown diamonds, natural diamonds are currently experiencing the most severe downturn in history. However, the lab-grown diamond market is also not optimistic, as more and more producers enter the market, intensifying competition.

On Wednesday local time, WD Lab Grown Diamonds, the second-largest lab-grown diamond producer in the United States, filed for bankruptcy, becoming the biggest casualty of the industry's intensifying competition. The company had a total debt of $44 million and total assets of $3 million.

The likely winner against WD Lab Grown Diamonds is probably from Henan.

According to data compiled by "Finance Eleven", Henan is the world's largest production base for lab-grown diamonds. Over the past few decades, cities in Henan Province such as Zhengzhou, Xuchang, Nanyang, and Shangqiu have formed a cluster of lab-grown diamond industry integrating research and development, production, and sales. Around 2016, with the maturity of lab-grown diamond technology, the lab-grown diamond industry quickly entered this new field. In 2022, China contributed half of the global lab-grown diamond production chain, with 80% of it coming from Henan.

Even diamond analysts have stated that WD was already a leader in the industry, and its closure means that "it is difficult for any company to compete with Chinese and Indian producers."

Founded in 2008, WD was once a leading player that shook the global diamond industry, with revenue reaching $33 million last year. The company developed a technology called chemical vapor deposition, which sprays evaporated materials onto the surface to create lab-grown diamonds that are dazzling and have the same color as natural diamonds.

Lab-grown diamonds are posing a huge threat to the natural diamond industry. Both have identical physical and chemical properties and can meet the 4C standards (color, clarity, cut, carat) used to measure diamond quality. It is almost impossible to distinguish between natural and lab-grown diamonds with the naked eye or with general instruments. However, lab-grown diamonds are much cheaper. Under high inflation, many young people in Europe and the United States have given up natural diamonds and turned to lab-grown diamonds.

However, due to overproduction, the price of lab-grown diamonds has plummeted in recent years. In the past seven years, the price of lab-grown diamonds has fallen by three cups. In the US market, the price per carat of lab-grown diamonds is currently only 15%-25% of natural diamonds.

Another large lab-grown diamond producer in the United States, Diamond Foundry, has begun to seek development opportunities outside the jewelry industry. The CEO of the company, Martin Roscheisen, stated to the media in August of this year that as production costs continue to decrease, Diamond Foundry plans to provide diamond-based chips for the semiconductor industry.