Silicon Valley startup bets on North Bay to pioneer lab-grown diamond tech – The Mercury News

Diamond Quanta Inc. is establishing a North Bay operations and process development center in Petaluma, where the Mountain View company developing diamond materials for electronics and optics is building its first major pilot manufacturing system and expects its first locally produced parts within months.

The company calls the operation “Diamond Valley,” a deliberate reference to the North Bay’s former “Telecom Valley,” the communications-equipment cluster centered around Petaluma and Santa Rosa that became a major technology manufacturing hub in the 1990s.

“It definitely keeps us connected to Silicon Valley, where our customers and partners are,” founder and CEO Adam Khan said. He said Petaluma offered industrial infrastructure, a skilled labor pool and “the space and room to grow for our future needs,” at costs difficult to find in Silicon Valley.

The Petaluma site will become Diamond Quanta’s primary California operations and process development center, while Mountain View remains its headquarters, the company announced Wednesday.

Only the beginning of hiring

The operation initially is permitted for 10 jobs, primarily highly skilled technical and advanced-manufacturing positions. Khan said further hiring will depend on completing code-related improvements to accommodate more employees and on customer qualification programs turning into production business.

“The initial jobs will consist of highly skilled technical and advanced manufacturing positions, and then as we’re qualifying our customers and converting them into production, we’re going to staff and expand around it,” Khan said.

First product

At the center of the operation will be Diamond Forge 1, a pilot manufacturing and process-integration system intended to bring together diamond synthesis, surface preparation, metrology and other processes needed to qualify the technology for customers. Diamond Quanta ultimately plans to license its processes and supply customers with similar equipment for their own production lines.

The buildout includes a 1,000-square-foot ISO Class 5 clean room, a highly controlled space designed to keep airborne particles at extremely low levels so they do not contaminate sensitive manufacturing processes. Khan said the main tool will occupy much of that room, stretching about 25 feet long. It requires 480-volt electrical service and consumes tens of kilowatts while operating.

Power is part of the pitch

That kind of high-capacity electrical service can be difficult and costly to secure for industrial users in the Bay Area, including the North Bay, where the Journal has documented utilities adding substation and feeder capacity to accommodate housing, transportation electrification and other large new loads.

Khan said Petaluma’s existing industrial power infrastructure was one factor in choosing the site. He said Diamond Quanta also expects to use PG&E’s economic-development rate-matching program, which can reduce electricity costs by comparing California rates with competing locations.

The company’s Petaluma power requirement is part of a much broader regional competition for power-rich industrial buildings.

Advanced-manufacturing demand across the East Bay, Silicon Valley and San Francisco Peninsula has reached a record level, according to Kristin Hagedorn, research director for JLL’s Northern California industrial group. She said the number of square feet leased this year already has surpassed the total for all of 2025, driven by semiconductor, drone, autonomous-vehicle and quantum-computing companies, including major leases by Super Micro, Archer Aviation, Zoox and Quanta Computer.

“For the first time in more than a decade, advanced manufacturing has overtaken warehouse and distribution uses in regional leasing activity, fueled in part by investment in physical AI and data centers,” she said.

Hagedorn expects demand to remain strong through the rest of 2026 and into 2027, with companies seeking nearly 10 million square feet of space — preferably buildings with about 4,000 amps of electrical capacity.

From computer chips to phone screens

Khan said production time via processes used in Diamond Forge 1 varies by application and the thickness of diamond required, but the system is designed for high-throughput manufacturing, including 300-millimeter semiconductor wafers (on which many circuit chips are made) and multiple smartphone-sized pieces at a time.

Diamond Quanta initially is targeting durable diamond optical surfaces and diamond-based thermal interfaces designed to remove heat from increasingly dense semiconductor systems. Longer-term research includes moving from thermal materials into active diamond microelectronics.

The company plans to showcase the first parts made at the Petaluma operation at CES 2027, a massive consumer-electronics trade show at the beginning of next year in Las Vegas, where it plans demonstrations involving engineered-diamond optical surfaces and thermal interfaces for semiconductor and packaging systems.

Diamond Quanta has assembled several different kinds of outside relationships. Japan-based ExtenD provides diamond-deposition technology, while New Jersey-based Heller Industries is an investor and system integrator for production equipment. The company also has research ties with Lawrence Livermore National Laboratory and has participated in Plug and Play’s Semiconductor & Photonics accelerator and NVIDIA Inception, NVIDIA’s startup-support program, according to company announcements.

Partners, investors and accelerators

Khan has worked in lab-grown diamond technology for more than 15 years. Before founding Diamond Quanta, he founded Akhan Semiconductor, where he developed diamond thin-film applications for electronics and optics, authoring more than 38 diamond-technology patents, and before that conducted research at Stanford nanofabrication facilities and Argonne National Laboratory.

Illinois-based Akhan raised more than $30 million before ceasing operations in 2024. Phoenix-area Diamond Technologies Inc. acquired Akhan’s patent portfolio, equipment and other assets in mid-2025 for an undisclosed amount.

Khan meanwhile founded Diamond Quanta in January 2024 by Khan, joined later by diamond photonics researcher Afaq Piracha and startup expert Michael Pierantozzi. Khan serves as CEO, Piracha as chief technology officer and Pierantozzi as chief operating officer.

In July of this year, the company was selected by HAX, the hard-technology venture program of venture capital firm SOSV. The relationship includes an operation at HAX’s Newark, New Jersey, facility and access to engineering, manufacturing and commercialization resources. Khan said SOSV’s investment was more than $1 million and closed out Diamond Quanta’s pre-seed financing. He said the company plans to open its next seed round in the first quarter of 2027.

Telecom Valley legacy

The North Bay location also puts Diamond Quanta near a workforce with roots in technologies closely related to its own.

Telecom Valley was best known for communications-equipment makers, but optics, coatings and thin-film technology also have long been part of the region’s manufacturing base. Local reporting has chronicled such operations, including 3M’s former Petaluma optical-film plant traced its roots to Optical Sciences Group, founded by vision-care scientists in San Rafael before 3M acquired it in 1982 and moved it to Petaluma. The operation developed films for displays, electronics and other industries

The broader technology cluster reached its high-water mark in the late 1990s. Sonoma County’s telecom industry employed more than 12,000 people near its peak, many of them engineers. Cisco Systems’ $7 billion purchase of Petaluma startup Cerent in 1999 became a symbol of the boom. After the dot-com recession began in 2001, local telecommunications companies lost about 6,000 jobs in two years, and many eventually closed or moved operations.

Khan said the “Diamond Valley” name is aspirational rather than a claim that another cluster already exists. Diamond Quanta wants to establish “the first node” around which suppliers and related businesses could develop.

A workforce pipeline

Some workforce infrastructure also survived or developed after Telecom Valley’s decline. Santa Rosa Junior College has extensive career and technical education programs, while North Bay employers continue to draw on skilled workers in machining, optics, electronics and related manufacturing. The California Biomanufacturing Center partnership based at Solano Community College’s Vacaville campus launched in October 2020 and has developed specialized high-tech manufacturing training, including biomanufacturing.

Khan said Diamond Quanta already has discussed workforce development with Petaluma and Sonoma County, including possible connections with community colleges for training in clean-room operations and advanced-materials equipment. Recruiting also could extend to the East and South Bay for jobs such as laser operations and senior power-electronics engineering.

“Diamond Quanta’s investment is a strong example of the opportunity we see for Sonoma County and the North Bay to diversify our economy by attracting advanced technology and manufacturing companies that create skilled, high-quality jobs,” said Ethan Brown, executive director of the Sonoma County Economic Development Collaborative, in the announcement. Emily Desai, chief deputy director of the California Governor’s Office of Business and Economic Development, said in that news release that such companies can create skilled jobs while keeping emerging technologies’ commercialization in California.

Jeff Quackenbush joined North Bay Business Journal in May 1999. Reach him at jeff@nbbj.news or 707-521-4256.