The U.S. is considering banning the import of new Chinese data center components, causing a sharp surge in the U.S. stock market's optical communication sector, with AAOI jumping over 18%.

BlockBeats News, August 4th, Reuters reported citing sources familiar with the matter that the Trump administration is drafting an order to ban the import of new Chinese data center components. The Federal Communications Commission (FCC) is planning to impose import restrictions on Chinese optical transceivers (used for high-speed data transmission in data centers) and hopes to announce the enforcement within this year. The White House and FCC have not responded to requests for comment.

If the United States bans the import of new Chinese data center equipment, it may increase costs for U.S. cloud computing companies such as Amazon Web Services (AWS)AMZN.O, forcing them to turn to other suppliers, such as U.S.-based Coherent COHR.N and Lumentum LITE.O. A report by the U.S. Innovation Foundation points out that although Coherent and Lumentum have competitive technologies, they do not have the scale to replace Chinese manufacturers.

Sources said that the current target of regulation is limited to new models of Chinese-made optical transceivers (core components of optical modules, 800G/1.6T high-speed AI optical modules). Existing products that have obtained FCC certification and are being sold in the United States by companies such as Acacia Communications and NeoPhotonics are not restricted. The scope of the regulation prohibits U.S. companies from directly importing new Chinese data center optical components, rather than prohibiting Chinese companies from setting up overseas factories for supply.

As a result, according to BIT (bit.com) market data, the pre-market trading of U.S. stocks in the optical communication sector further expanded, with:

The Photonic ETF FOTO up 8.08%;

Corning (GLW) up 8.10%;

Marvell Technology (MRVL) up 7.64%;

AAOI (Applied Optoelectronics) up 18.1%, the company is a manufacturer of high-speed optical modules (800G/1.6T), focusing on AI data center transceivers;

Lumentum Holdings (LITE) up 11.57%, the company is a core supplier of optical communication lasers and optical modules, a key player in AI data centers;

Coherent Corp (COHR) up 14.01%, the company is a leader in lasers, optical components, and photonic solutions, covering data centers and industrial sectors;

Ciena Corporation (CIEN) up 8.96%, the company produces high-speed SerDes and connectivity chips, focusing on low-power interconnects in AI data centers.