Diabetes does cause infertility, eventually, if he doesn't take care of himself. If you really are concerned about that, talk to the doctor. Have him checked out. Just being diabetic, in itself, shouldn't be a factor. My best friend growing up is, and he has 2 children. So. Good luck.
I know plenty of diabetic men who have fathered children. I know uncontrolled diabetes can cause erectile dysfunction, but as long as he is not having that problem, I would think his sperm would be ok. It may be something to mention to the doctor. How long have you been trying?