Trump Admin Drafting Ban On Chinese Optical Transceivers To Protect Data Centers From Spying
The Trump administration is preparing to slap import bans on Chinese optical transceivers, targeting a critical component for US data centers as White House officials seek to protect infrastructure supporting the AI boom from Chinese espionage, Reuters reported.
These small, pluggable connectors convert electrical signals from servers, switches, and AI chip stacks into light for transmission over fiber-optic cables, then convert the light back into electrical data at the other end. Because these modules are critical to data centers, Chinese-made transceivers could potentially allow Chinese firms to steal data, install malware, or disrupt services at US facilities.
Sources told the outlet that the Federal Communications Commission is drafting import restrictions on Chinese optical transceivers, which could take effect this year.
“Transceivers definitely pose a risk,” said Divyansh Kaushik, an AI policy expert at the Washington, D.C.-based advisory firm Beacon Global Strategies. “As the data center buildout scales up, you want to make sure the data center supply chain is secure from the outset,” he added.
The restrictions would affect Zhongji Innolight, which controls about 27% of the global data center transceiver market and was recently added to a Pentagon list of companies allegedly linked to China’s military.
Meanwhile, U.S. manufacturers Coherent and Lumentum could benefit significantly from the measure. Coherent shares are up 18% in premarket trading, while Lumentum shares are up 14%. Applied Optoelectronics is also up 18%.
However, as Reuters noted, those U.S. companies “lack the scale to replace Chinese suppliers immediately.”
Read Goldman’s trading desk take on optical networking and transceiver stocks.
Tyler Durden Tue, 08/04/2026 – 09:40
Source: https://freedombunker.com/2026/08/04/trump-admin-drafting-ban-on-chinese-optical-transceivers-to-protect-data-centers-from-spying/
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