Key facts
- The Trump administration is drafting a ban on new Chinese data center component imports.
- The measure targets optical transceivers, crucial for data transfer within data centers.
- The ban aims to prevent data theft, malware installation, and service disruption by Chinese firms.
- The FCC is expected to publish the restriction this year.
- Chinese firms like Zhongji Innolight could be significantly impacted.
- U.S. companies such as Coherent and Lumentum may benefit from the ban.
The Trump administration is developing a ban on new imports of Chinese data center components, including optical transceivers, as part of an effort to secure U.S. infrastructure critical for artificial intelligence development. Four sources familiar with the matter told Reuters that the Federal Communications Commission (FCC) is working on the measure, which could be published and take effect this year.
The proposed ban aims to prevent Chinese companies from engaging in data theft, installing malware, or disrupting services within U.S. data centers. This move is seen as an attempt to preemptively block Chinese technological incursions into sensitive U.S. industries, drawing parallels to past difficulties in removing Huawei equipment from U.S. networks.
While the FCC has the authority to modify or abandon the restriction, the initiative reflects a broader strategy to limit Chinese technological influence. Experts like Divyansh Kaushik of Beacon Global Strategies emphasize the importance of securing the data center supply chain as AI infrastructure expands.
The Chinese embassy in Washington urged the U.S. to consider the views of business communities and cease actions against Chinese companies, warning that Beijing would respond to any measures that harm its interests. The White House and FCC did not comment on the report.
If enacted, the ban would likely affect Zhongji Innolight, a leading global supplier of transceivers with a significant market share. U.S. companies such as Coherent and Lumentum, which offer competing technologies, stand to gain from the restriction, though they may lack the scale to fully replace Chinese vendors. The FCC has previously implemented similar restrictions on Chinese drones, routers, robots, and inverters.