FCC proposes import ban on Chinese optical transceivers — blockade targets key AI interconnects as China holds 56% global market share

The FCC is drafting a proposal that would expand its list of equipment and services covered by the Secure Networks Act to include imports of new-model optical transceivers manufactured in China, according to a TrendForce report. Although the specifics are still unknown, such as what exactly constitutes a Chinese company and what is considered a "new model," this import block could have far-reaching implications. It's likely to impact hyperscaler AI companies, which are investing heavily in optical interconnect technologies, seen by many as the next battleground in the race for advancing AI performance, latency, and efficiency.That's thought to be the core reason behind this potential blockade. With Chinese optical module manufacturers thought to make up around 56% of the global manufacturing capacity for this key technology in 2026, the U.S. administration wants to decouple U.S. reliance on this supply chain and strengthen its alternatives: Both domestic and international.