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Company hopes its cultured diamonds dazzle

When people ask Martha Linares about the five diamonds set into the gold ring that she wears, she offers a surprising answer: "My husband made them at work." Linares, her husband, Robert, and their son, Bryant, all work at a small start-up in the western suburbs of Boston called Apollo Diamonds. One recent week, the company churned out 18 carats of diamond that they contend is more perfect, and more pure, than what miners extract from the earth.

"We're just finishing our shakeout with our new equipment," says Bryant Linares, Apollo's president and CEO. "Once we're up to speed, we'll have the ability to produce as much diamond here as a small African country."

Consequently, none of the Linares clan wants me to tell you exactly where their company is located.

But the media has already found Apollo. The company was featured in a cover story in the September issue of Wired magazine, and more recently on the front of an industry publication called the Rapaport Diamond Report. Camera crews from "60 Minutes II," the BBC, and Boston's Channel 7 have paid visits.

The company plans to introduce Apollo "cultured diamonds" to consumers next year, and sometime after that begin supplying diamonds to the semiconductor and optical device market.

While there's indisputably something dazzling about a company that has developed and patented a technique for manufacturing crystals chemically indistinguishable from a naturally occurring diamond, I wonder whether Apollo will be able to successfully carve out a place in its chosen markets.

Robert Linares is a former Bell Labs researcher who'd previously started a company called Spectrum Technologies, which helped pioneer the high-performance gallium arsenide microchips that operate most of today's cellphones. In 1990, after he'd sold Spectrum, he began trying to cook up a recipe for diamond.

"Diamond represented the ultimate semiconductor material," Linares says. "But natural crystals weren't pure enough."

The process that Robert Linares developed with another Apollo employee, Patrick Doering, uses well-established technique for forming crystals that's called chemical vapor deposition. Diamonds had been produced this way before, but their crystal structure was jumbled -- setting them apart from natural diamonds. "It was `beauty in, garbage out,' " Robert Linares says.

Over a decade, he and Doering discovered the perfect recipe for growing perfect diamonds. Inside a vacuum chamber, they place small "seeds" of natural diamond on a tray. Hydrogen and methane gas are injected into the chamber. The gases are heated by a microwave beam. As they approach 1,800 degrees, the gases are excited into a glowing purple plasma, and single atoms of carbon begin to "rain" from the plasma onto the diamond seeds. The carbon atoms affix themselves to the seeds, layer upon layer.

In five days, the process can produce a quarter-carat gemstone. Once the stone is removed from the reactor, the new diamond is cut from the seed by a powerful laser. The seed can then be used again.

The process isn't yet reliably producing large quantities of diamond, and some of the stones that Apollo has grown so far have a pinkish-brown tint to them -- at least until they're treated in a pressure chamber to remove the color. Gems grown more slowly, Bryant Linares says, are colorless when they emerge from the reactor. (A Florida company is already selling man-made yellow diamonds, using a process that tries to emulate nature, subjecting carbon to high pressure and high temperature.)

And Apollo hasn't yet been able to turn out flat diamond "wafers" of a large enough size to be useful to the semiconductor industry. Diamond is especially appealing for microchips because it sheds heat better than silicon. And using a diamond laser to write and read data on a CD could vastly increase their storage capacity -- squeezing a terabyte of data onto a normal-size disc.

But those are long-term transitions, and Apollo will have to sustain itself as new chips and devices using diamond move from the R&D stages into products that consumers buy.

And chip makers can be conservative. "To convince them to retool and change their entire fabrication process, you need to convince them that something else is better" than silicon, says Bernhardt Wuensch, an MIT professor who has served as an adviser to Apollo.

Plus, silicon "is really, really, really cheap," says Richard Woodin, manager of the advanced materials program at Fairchild Semiconductor in Maine.

"The semiconductor industry has become very cost- and commodity-driven. It'll be very difficult for a new material to displace silicon, unless there's a compelling economy advantage."

Woodin does think that diamond, even if it's more expensive than silicon and gallium arsenide wafers, could find specialty applications, for example in chips that control power grids and need to handle high voltage.

Work on synthetic diamonds, Woodin points out, isn't exactly new. General Electric and Union Carbide were producing them when Eisenhower was in the White House.

While waiting for the high-tech applications to emerge, Apollo intends to try selling its cultured diamonds to consumers next year.

The diamond industry isn't exactly throwing a welcome party. Diamond prices are rigidly controlled by the De Beers Group, the South African diamond cartel. To have Apollo selling man-made diamonds that are indistinguishable, at the atomic level, from mined diamonds could create confusion for consumers -- not to mention undercut the industry's established pricing. (Apollo says it will always clearly label its product as man-made.)

There are questions here, too: Will consumers regard Apollo's cultured diamonds as little better than cubic zirconia, or will they see cultured diamonds as a good deal? Will distributors be interested in selling a machine-grown crystal that costs 30 percent less than a natural one?

"It's a fragmented, archaic distribution channel," says Glenn Rothman, president of Hearts on Fire, a Boston-based marketer of specially cut natural diamonds. "It's very hard to penetrate and build a [sales] channel in the jewelry industry."

Merritt Mayher, the CEO of Shreve, Crump & Low and a former Tiffany & Co. executive, wasn't impressed by a sample of Apollo's product that she saw last week. "It had a big, black inclusion under the table," she says, the diamond equivalent of having a pimple on the tip of your nose.

"And when we compared it to our ideal cut diamonds, it was not nearly as brilliant to the naked eye." Still, she acknowledged that if you put both stones under a diamond tester, "they're both going to come up as diamond."

"Jewelry is about beauty and uniqueness," Mayher says. "That is what is appealing to customers when they buy diamonds as a symbol of their love."

I asked whether I could expect to see Apollo cultured diamonds sold at Shreve's flagship store on Boylston Street anytime soon. Her response: "It certainly isn't something I see on a near- to mid-term time horizon. But we've been in business since 1796. I'm sure I sell things today where someone in the past had said, `We'll never sell that.' "

Try this test the next time you see someone wearing a diamond ring: Would they prefer wearing a bigger diamond, even if it were man-made? Apollo says it will be able to deliver a one-carat cultured diamond for the same price as a natural stone that weighs less than three-quarters of a carat.

Bryant Linares says the company has been operating on $5 million in private funding, plus several million in government research funding and several million of the Linares' own money. He is in the process of raising a final round of private funding, to set up more diamond-growing machinery, and has already been fielding calls from investment bankers about taking the company public.

That seems a bit quick to me. But in the often-dull world of high-tech investing, a company that promises to churn out diamonds as routinely as Krispy Kreme makes doughnuts is a dazzling proposition. And it's hard to deny the allure of a process for making precious gems that will only get better and cheaper, year after year.

Scott Kirsner is a contributing editor at Fast Company. He can be reached at skirsner@verizon.net.

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