Key facts
- The U.S. FCC is drafting a ban on new models of Chinese optical modules and data center components.
- The ban aims to secure AI infrastructure and prevent data theft or service disruption.
- Chinese manufacturers supply over half of the world's high-speed optical interconnects.
- U.S. companies like Lumentum and Coherent are seen as potential beneficiaries.
- China has stated it will respond to actions that harm its interests.
The U.S. Federal Communications Commission (FCC) is reportedly preparing a ban on new models of Chinese-made optical modules and other data center components, a move aimed at securing the infrastructure underpinning the artificial intelligence boom. The proposed restrictions seek to prevent Chinese firms from potentially stealing data, installing malware, or disrupting services within U.S. data centers.
Sources familiar with the matter told Reuters that the FCC hopes to publish the measure this year, with the ban taking effect before the end of 2026. This action is part of a broader effort by the Trump administration to limit Chinese technological influence in critical U.S. industries. Optical transceivers are essential for high-speed data transmission within data centers, converting electrical signals into light and vice versa, and Chinese manufacturers currently supply a significant portion of the global market.
AI policy experts have noted that transceivers pose a risk and that securing the data center supply chain is crucial as AI infrastructure scales up. The news sent shares of U.S.-based transceiver makers, including Lumentum, Coherent, and Applied Optoelectronics, higher. However, the ban could also increase costs for American cloud providers like Amazon Web Services, as they might need to shift to U.S. suppliers who may lack the scale of Chinese competitors like Zhongji Innolight, a leading global seller of transceivers.
The Chinese embassy in Washington urged the U.S. to consider the voices of business communities and cease actions against Chinese companies, warning that Beijing would take necessary measures in response to any action causing material harm to its interests. The FCC has previously imposed similar curbs on other Chinese technology products.