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U.S. optical component stocks surged following a Reuters report that the Trump administration is drafting a ban on U.S. imports of new Chinese data center hardware. Applied Optoelectronics jumped 16%, Coherent gained 13%, Lumentum rose 11%, and Corning climbed 8%.
According to four sources familiar with the matter, the Federal Communications Commission (FCC) is preparing restrictions against new Chinese optical transceivers—the critical hardware that routes data over fiber-optic cables inside AI data centers. Officials hope to finalize and enforce the ban this year to protect U.S. AI infrastructure from potential data theft, malware, and service disruption. The sources noted the FCC could still modify or abandon the rule.
Key Impacts & Market Implications:
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China’s Zhongji Innolight, which holds a 27% global market share in data center transceivers (per Counterpoint Research) and was placed on the Pentagon’s military-backed company list in June. According to the Foundation for American Innovation, Innolight relies on overseas markets for 90% of its revenue.
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The rule could drive up costs for hyperscalers like Amazon Web Services, forcing a transition to alternative suppliers such as Coherent and Lumentum.
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Echoing past FCC restrictions on Chinese drones, routers, robots, and inverters, the agency plans to ban all new transceiver model imports while granting exemptions to select non-Chinese suppliers, according to three sources.
