Japan and the United States are exploring the establishment of a synthetic diamond manufacturing facility in the US under Japan’s planned $550 billion investment programme, Reuters reported, citing sources familiar with the discussions.

The proposed facility would focus on lab-grown diamonds (LGDs) used in semiconductors, precision tools and other advanced industrial applications, as both countries look to reinforce strategic supply chains. Synthetic diamonds are considered a critical material for high-end manufacturing.

The talks are taking place amid growing concern over global dependence on China, which accounts for the bulk of synthetic diamond production and has imposed export controls on certain materials, according to Reuters.

The project could be among the early initiatives announced ahead of an expected visit by Japan’s prime minister to Washington. Reuters said companies such as Element Six, part of the De Beers Group, may be involved, with Japanese state-backed institutions potentially providing financial support. Discussions remain at an early stage and no formal agreement has been finalised.