Plans to establish a synthetic diamond manufacturing facility in the United States form a central element of Japan’s proposed $550 billion investment package, according to two sources briefed on the talks. The plant is seen as a priority among projects that may be announced in the opening tranche of the programme, which could be disclosed before a U.S. visit by Japan’s Prime Minister Sanae Takaichi planned as early as March, the sources said. Both declined to be identified because the discussions are private.
"The United States wants to accelerate domestic production of synthetic diamonds," one source said. "By involving Japanese companies, Washington hopes to build a U.S.-Japan supply chain that does not rely on China."
The emphasis on synthetic diamonds follows recent moves by China to impose export controls on some artificial-diamond products, a development that underlined the strategic value of the material. Much of the worlds synthetic diamond output is currently produced in China, the sources added.
The synthetic diamond proposal reportedly involves Element Six, a unit of De Beers Group, which the source identified in describing the initiative. No financial terms for the project were provided by the sources.
Tokyo is racing to finalize projects under the larger initiative, which was negotiated alongside an agreement with Washington to lower tariffs on Japanese exports. The financing package that Japan is preparing would draw on equity, loans and loan guarantees supplied by state-backed institutions, including the Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI), the sources said.
That diplomatic and financial backdrop sits against other trade tensions. At the same time as the U.S.-Japan talks, President Donald Trump is reported to be increasing tariffs on South Korea, accusing Seoul of lagging in adopting a similar pact agreed with Washington last year.
Alongside the synthetic diamond plan, other large undertakings are likely to appear in the first set of projects. One source said a large-scale power-generation project involving Hitachi Ltd is expected to be included. Separately, a major infrastructure initiative to build a data centre connected with SoftBank Group remains on the shortlist, the sources said.
Japans trade ministry declined to comment on the specific projects under discussion, saying only that talks with the United States were underway to rapidly assemble the project pipeline and that no decisions had been finalized. Hitachi confirmed it was engaged in discussions with both governments but declined further comment. De Beers Group, the U.S. commerce department and the Japanese embassy in Washington did not immediately respond to requests for comment outside business hours.
Industry observers note that diamond is one of the hardest known materials and serves several technical purposes in advanced manufacturing. Synthetic diamonds are used for ultra-fine polishing of semiconductor wafers, machining of tough metals and ceramics used in quantum devices, and for thermal management in advanced electronic systems. The material also has military applications, including in certain munitions and radar components, the sources said.
The sources did not provide a breakdown of which projects would be announced first beyond the items identified, nor did they disclose the aggregate value of any individual deals. That information remains subject to final negotiations between the governments and the corporate parties involved.
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