Trump admin drafts ban on new Chinese optical transceivers in US data centers, hits Zhongji Innolight
Trump admin drafting ban on new Chinese optical transceivers in US data centers, per Reuters, citing malware, data theft risk. Targets Zhongji Innolight, on Pentagon's China military list since June. Rivals Lumentum $LITE, Coherent $COHR up 7-11%.
The Trump administration is drafting a ban on US imports of new Chinese optical transceivers, the fiber-optic hardware that moves data at light speed inside data center racks, Reuters reports, citing people familiar with the matter. The Federal Communications Commission is working on the measure, aimed at preventing Chinese firms from stealing data, installing malware or disrupting service inside US data centers that train and run AI models. Officials hope to publish the rule this year, though the FCC could still modify or shelve it. The restriction would hit Zhongji Innolight hardest, one of the world's largest transceiver sellers, which the Pentagon added to its list of alleged Chinese military-backed companies in June. Shares of US-based rivals rallied on the news: Lumentum $LITE rose 7%, Coherent $COHR rose 11%, and Applied Optoelectronics $AAOI jumped 18%. The move would extend years of US restrictions on Chinese chips and networking gear into a hardware layer, fiber-optic transceivers, that has so far drawn far less regulatory attention despite sitting at the physical core of every AI data center buildout.