Chinese optical-module stocks rebound as analysts downplay ‘mild’ AI curbs proposed by US

FCC plan would preserve existing supplies while targeting next-generation products, forcing Washington to balance security concerns with cost of replacing Chinese capacity

Shares of China’s leading optical-module makers clawed back early losses on Wednesday after analysts downplayed the impact of proposed US restrictions that could block the firms from future American AI data centres.

They noted that the rules would likely leave current supply chains intact and face significant hurdles because of America’s heavy reliance on Chinese manufacturing.

Zhongji Innolight ended the day down 7.3 per cent and 6.7 per cent in Shenzhen and Hong Kong, respectively, while Eoptolink Technology dropped 5.3 per cent and Suzhou TFC Optical Communication gained 2.3 per cent in Shenzhen.

All three had tumbled sharply in early trading before recovering ground. In contrast, their US rivals surged on Tuesday, with Coherent closing 12.4 per cent higher and Lumentum gaining 8.9 per cent.

The market divergence followed a Reuters report on Tuesday that the Trump administration was drafting a measure through the Federal Communications Commission (FCC) to bar new models of Chinese optical transceivers from the US market, aiming to implement the rule this year.

Zhongji Innolight, Eoptolink, and Suzhou TFC did not immediately respond to requests for comment on Wednesday.