Shares of optical communication concept stocks experienced a severe sell-off in Hong Kong markets. CIG (06166) plunged 19.15% to HK$72, while YOFC (06869) dropped 15.19% to HK$106.6. TIME INTERCON (01729) fell 14.4% to HK$12.9, and TRIGIANT (01300) declined 11.94% to HK$1.18.

The sell-off comes amid news that a supply-demand gap for optical fiber is driving multiple companies to initiate expansion plans for optical preforms and fiber manufacturing. On the evening of July 10, FiberHome and Lingyi iTech both released announcements. Nomura had previously warned that if new entrants successfully develop high-end products (such as hollow-core and multi-core fiber) and execute their capacity expansion plans smoothly, market competition would intensify, potentially putting pressure on existing players' profit margins.

Notably, concerns over a "circular financing" scheme have emerged following Nvidia's latest $750 billion AI infrastructure transaction. Analysts point out that major cloud providers and Nvidia have previously invested their own capital into model developers and chip companies, which then use that money to purchase products from the same investors. This creates an illusion of strong demand and high revenue growth. If these investors exhaust their free cash flow, they will be forced to rely on external financing to sustain such circular transactions. Reportedly, in June this year, Nvidia announced its first debt issuance in five years, aiming to raise $20 billion.