US drafts ban on Chinese optical transceivers for AI data centers
Reuters reports the Trump administration is drafting an FCC ban on new imports of Chinese-made optical transceivers, the hardware that routes data inside AI data centers, citing national security risk. China's Zhongji Innolight and Eoptolink shares fell 10 percent; US suppliers A
The Trump administration is drafting a rule to ban new imports of Chinese-made optical transceivers, the hardware that routes data over fiber-optic cables inside AI data centers, Reuters reported on August 4, 2026, citing four sources familiar with the matter. The FCC is preparing the restrictions on national security grounds. China's Zhongji Innolight, the 10th-biggest China-listed stock by market value and holder of a 27 percent global market share in data center transceivers per Counterpoint Research, saw shares fall roughly 10 percent in Shanghai and Hong Kong; the company generated 62 percent of its first-quarter revenue from the US. Rival Eoptolink Technology, which draws 96 percent of sales from overseas markets, also fell 10 percent, and Suzhou TFC Optical Communications slumped roughly 6 percent. US-listed suppliers rallied on the news: Applied Optoelectronics jumped 16 percent, Coherent gained 13 percent, Lumentum rose 11 percent, and Corning climbed 8 percent. Jefferies analysts said in a note they see a low risk the ban materializes under Trump, calling it a negotiating tactic ahead of President Xi's planned visit to the US in September, given China's own rare earth export controls affecting the US optics industry. Source: Reuters.