Chinese optical transceiver makers dodge US ban for now as FCC updates rules
The US Federal Communications Commission (FCC) has published its final decision on updates to its equipment authorisation rules, easing market anxiety over potential bans on Chinese optical transceivers. The rule, adopted in July and finalised on Friday, tightens authorisation requirements for devices containing certain hardware components made by entities on the Covered List – a US blacklist of…
On Friday, the US Federal Communications Commission (FCC) finalized a rule update, easing concerns about potential bans on Chinese optical transceivers. The decision, adopted in July, modifies authorisation requirements for devices housing specific hardware components originating from entities on the US blacklist. Notably, optical transceivers, integral components of data centres' communication networks, were not directly targeted by this ruling, which alleviated market speculation surrounding a potential US ban, reported by Reuters in August.
Following the FCC's announcement, shares of Zhongji Innolight, a prominent manufacturer of optical transceivers, saw a 4% increase in Shenzhen and 4.37% in Hong Kong. Similarly, Eoptolink Technology experienced a nearly 3% rise. Conversely, Suzhou TFC Optical Communication declined by 2.62% in Shenzhen.
The shift towards optical interconnects in artificial intelligence infrastructure, driven by the need to scale efficiently due to bandwidth and power consumption constraints, has intensified. Optical links are now vital as data centres expand. Experts emphasize that competition in this arena extends beyond individual computing power to encompass the scale of entire clusters.
The global optical interconnect market, projected to expand from US$24.8 billion in 2025 to US$111 billion by 2030, is expected to see significant growth in shipments of 800Gbps (45 million units this year and 49 million in 2027) and 1.6Tbps (33 million units this year, rising to 71 million in 2027) optical transceivers.
A notable divergence exists in the technical focus between Chinese and US players. Chinese firms prefer near-packaged optics (NPO), which maintains optical engines in separate packages close to switch chips, reducing electrical connections while leveraging existing manufacturing ecosystems. In contrast, US leaders favor co-packaged optics (CPO), integrating optical engines onto the same substrate as switching silicon.
While CPO offers superior performance, NPO is favored for its practicality and cost-effectiveness, allowing Chinese suppliers to leverage their strengths in optical module manufacturing.
Written by urgent.news from SCMP Tech's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
