Diamonds may not be forever after all. The value of the gemstone is set to diminish and they will become common in computer chips, satellites and even medical implants within a decade — if Silicon Valley's avant-garde lab-grown diamond purveyors have their way.

"We want to drive prices down because we think there are going to be many more applications for diamonds at present," says Martin Roscheisen, founder of Diamond Foundry.

His company produces diamonds in a cluster of biotech start-ups. Engineers use proprietary reactors that mimic the extreme pressure and fiery heat that creates plasma that, with the addition of carbon, produces natural diamonds.

Carbon atoms are stacked one by one in a thin layer of diamond atomically and visually identical to gems in Tiffany's. Polishers in Antwerp buff each diamond up to 2000 times to create multiple facets that capture and reflect light. One carat of rough diamond takes "a few weeks" to produce and once polished, prices start north of US$1000 ($1556).

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Worn by the Duchess of Sussex and by actresses Emma Watson and Gal Gadot, lab-grown designs are being offered by London jewellers. A ring forged from a large chunk of man-made diamond, the last work of guru Jony Ive before he left Apple, sold for almost US$500,000. This would suggest the lab replica has a shot at disrupting the 131-year-old diamond giant De Beers.

"Thanks to laboratory-grown diamonds, mining diamonds out of our Earth is now an unnecessary evil," says Jason Payne, who co-founded Ada Diamonds, a San Francisco lab-grown diamond retailer named after 19th-century English mathematician Ada Lovelace. "We can leave a natural resource in the ground and instead produce it with sustainable, renewable energy," he says.

The environmental credentials are an important element of lab diamond producers' marketing. However critics have pointed out that the energy needed to essentially bottle lightning is substantial. The Diamond Foundry, which makes less than half of the overall lab diamonds in circulation, says it uses completely renewable energy, a combination of solar and hydro-power.

Global jewellery sales are shrinking, yet the diamond industry, which analyst Paul Zimnisky estimates is worth about US$90 billion annually, is expected to grow. Despite public perception that millennials have become diamond shy, for economic and ethical reasons, Tiffany's latest results were better than expected. However, all is not rosy.

De Beers is limiting supply in the face of trade tensions between the US and China, the two largest markets. The impact of lab diamonds is still only about 1 per cent of the overall market and will rise closer to 3 per cent by 2035, Zimnisky predicts. He is reluctant to say lab-grown diamonds will crush De Beers, saying producers are more likely to focus on hi-tech applications.

Munich-born Roscheisen has a computer science degree from Stanford and it was when using novel reactors to find an alternative to silicon that he realised they could build diamonds. When a jeweller who had heard of the firm's technology came knocking at their door looking for jewels costing "billions", Roscheisen realised they could sell the by-products.

The gems have a far greater margin than solar panels, he muses, stating that "diamonds are more valuable than cocaine per unit".

The foundry is one of a number of rival makers of lab diamonds. The concept took off in 2018 when US regulators ruled that the definition of a diamond grown in a lab or one chipped from rock as far as 600m below the surface were the same. The technology has been around for some time, but its popularity and marketing push as an alternative to traditional jewellery has shaken the incumbents, which have never faced a threat of this size.

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Bigger players insist mined diamonds can never be replaced. Nathan Strauss of Tiffany says it will not use lab diamonds, describing mined gems as rare and a "romantic symbol billions of years in the making with an intrinsic value far beyond their chemical make-up".

Tiffany believes natural diamonds are important in countries where they are a resource including Botswana, which relies on them for jobs.

Unsurprisingly, the lab-grown diamond industry is making enemies. "We've seen a multitude of attempts to discredit and harm the nascent lab diamond industry as a result," Payne says.