A late-night report on August 4 stirred investor sentiment regarding optical modules, with terms like "optical module" and "Zhongji Innolight" even trending on social media. According to a Reuters report on August 4, citing sources, the U.S. government is drafting a ban to prohibit imports of new models of data center components from China, aiming to protect critical infrastructure supporting artificial intelligence (AI) development. In response, the Chinese Embassy in the U.S. stated that Beijing urges Washington to "listen to the objective and rational voices of the business communities from both countries" and stop smearing Chinese companies and threatening sanctions.

Listed Companies: Overall Impact Considered Manageable

Preliminary assessments from companies listed on the STAR Market suggest that a strict U.S. ban on importing Chinese optical modules is unlikely. This is based on two key reasons: first, similar rumors have circulated multiple times in the past, making it hard to distinguish fact from fiction, and there is little need for excessive speculation. Additionally, from an industry perspective, U.S. AI development heavily relies on Chinese optical modules. Seven of the top ten global optical module manufacturers are Chinese, and Chinese suppliers account for 70% of shipments for high-speed products like 800G and 1.6T, while U.S. manufacturers lag in both capacity and technological advancement. Major U.S. cloud providers are accelerating AI infrastructure construction, and without Chinese optical modules, the entire process would be disrupted. Second, even if the news proves true, past experiences indicate the impact would be manageable. After tariffs were imposed in 2025, optical modules were among the first items to be included in tariff exemption lists due to opposition from U.S. cloud providers. Therefore, even if a policy is enacted, it is expected to include numerous exemptions, keeping the overall impact under control.

Institutions: Sufficient Preparations in Place

Leading brokerages have weighed in with timely interpretations. The communications team at Guotai Haitong pointed out that this news lacks official sources and details, similar to past rumors, and should be evaluated based on government or industry statements. The current information suggests involvement from the Federal Communications Commission (FCC), focusing on product certification or testing rules, rather than the "prohibition" implied by some reports. The ecosystem for optical communication products is influenced by complex, multifactorial dynamics and is one of the most globalized and earliest sectors. As a result, both North American demand-side cloud providers and Chinese supply-side optical module and component manufacturers have been preparing for geopolitical factors for five to six years, including policy responses, capital planning, and production site capacity. If the FCC ultimately implements new regulations, there are sufficient plans for industrial-scale deployment. The team also noted that optical communication relies on a globalized ecosystem, benefiting not only Chinese enterprises but also key U.S. chip and component companies upstream, which capture significant profits, and downstream cloud providers, which receive critical support. A blanket restriction would only harm globalization, making such a scenario highly unlikely. They further explained that traditional pluggable products already see deep participation from Chinese firms, while next-generation products like NPO (near-packaging optics) and Coherent lite are being co-developed with Chinese enterprises, a process that cannot be easily replicated or disrupted.

The communications team at CICC stated that while there will be a short-term emotional impact, the long-term outcome is likely to be "much ado about nothing." They clarified that the core function of optical modules is photoelectric signal conversion, which does not involve storing business data, presenting a fundamentally different risk profile compared to active equipment. Since 2020, similar narratives have emerged repeatedly, with initial concerns about Chinese manufacturers losing market share to North American competitors. However, these discussions have waned over the past two years as Chinese suppliers' share has actually increased, despite policies favoring domestic U.S. supply chains. The reason is practical: high-speed optical modules require customer certification, high-volume production yields, and delivery stability, all of which take time to develop. Currently, Chinese suppliers account for an average of 70% to 80% or more of orders for high-speed optical modules from major overseas clients. Implementing a blanket ban would leave North American firms unable to fill the gap for years, delaying U.S. data center construction—a disproportionate cost for a minor gain.

The communications team at CITIC Securities also argued that such a policy is unlikely to be implemented and would have limited impact, citing two reasons. First, policy implementation is difficult: the vast majority of global high-speed optical modules come from Chinese manufacturers, and overseas firms alone cannot meet North American demand (even most of their production capacity is based in China). Replacing all existing optical modules would be prohibitively costly, leading to a result of "much ado about nothing." Second, leading manufacturers have established overseas production capacity. Companies like Zhongji Innolight and Eoptolink have been actively developing Southeast Asian capacity for years, with most current North American shipments coming from abroad. Thus, even in an extreme scenario, Chinese firms have ample room to respond. Currently, domestic leaders significantly outpace their overseas counterparts in technological capabilities, product progress, cost control, and capacity layout. A complete decoupling in optical modules would only cause comprehensive delays in North American data center construction, a clear case of sacrificing major interests for minor gains.