Shares of ZJ Innolight (03308) plummeted 14.95% in intraday trading on Wednesday, following reports that the Trump administration is drafting a ban on U.S. imports of new Chinese data center components.

The sharp decline was triggered by a Reuters report that the U.S. Federal Communications Commission is working to bar imports of new Chinese optical transceivers, which are critical for high-speed data transmission inside data centers. ZJ Innolight, one of the world's largest sellers of such transceivers with a leading 27% global market share, would be directly impacted by the proposed restrictions. The company generates approximately 90% of its revenue outside China, making it particularly vulnerable to U.S. trade actions.

The potential ban aims to prevent alleged risks of data theft, malware installation, or service disruption at U.S. data centers that power the AI boom. While the measure could still be modified or shelved, the news sent shockwaves through the sector, with U.S.-based optical-networking stocks rallying sharply on the prospect of reduced Chinese competition.