An induction furnace includes a cylinder, a top and bottom cover that seal the top and bottom ends of the cylinder, and coolant passages within the cylinder and the covers. The induction furnace further includes a power supply and a coil. The coil surrounds the chamber and is hollow to allow flow of coolant therethrough. A susceptor susceptible to induction heating is located in the chamber and includes top and bottom pieces. A thermal insulator is disposed between the susceptor and the inner walls of the chamber and can be formed of a fused quartz cylinder within which the susceptor and the workpiece are contained. The thermal insulator can also include infrared reflectors and insulating members on the ends of the susceptor to reduce heat leakage to parts of the furnace outside of the susceptor.