Direct Impact of Proposed U.S. Bill to Ban Chinese-Made Optical Modules Remains Small

Dow Jones
Sep 29

0418 GMT - The direct impact of U.S. lawmakers' proposal to ban Chinese-made optical transceivers is limited so far, Nomura analysts say in a research note. The proposal seeks to prohibit the procurement of Chinese optical transceivers, specifically naming Zhongji InnoLight and Eoptolink Technology for federal government national security systems, they say. As this legislation doesn't extend to the private sector, which accounts for the majority of revenue for the two companies, the commercial impact remains minimal, they say. However, policy overhang remains as they could be added to the Federal Communications Commission's Covered List, the analysts say. "Given the current shortage of 1.6T optical transceivers and InnoLight's leading market position, we expect the company's fundamental performance to remain robust," they add.

 

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