Trump administration moves to ban imports of Chinese data center components, Reuters reports

The Trump administration is moving to ban imports of Chinese-made components used in data centers.

Citing sources familiar with the matter, Reuters reported Tuesday that the Federal Communications Commission (FCC) is drafting a bill to ban imports of new Chinese optical transceivers — devices that use light to transmit and receive data between AI data centers.

The sources said they hope the bill will be enacted before the end of this year, though the FCC could amend or shelve it. If the measure takes effect, it would prevent Chinese companies from stealing data from US data centers, installing malicious software or disrupting services.

A ban on new Chinese optical transceiver imports could deal a blow to Chinese optical networking company Zhongji Innolight, which the Pentagon added to its list of Chinese military-affiliated companies in June.

According to Counterpoint Research, Zhongji Innolight leads the global data transceiver market with a 27 percent share, with 90 percent of its sales coming from outside China.

If the bill is enacted, US cloud companies such as Amazon Web Services (AWS) would need to source components from suppliers such as Coherent and Lumentum, though this could drive up costs.

The FCC added Chinese companies including Huawei and ZTE to its covered list of entities deemed threats to US national security in 2021. It expanded the list in December last year and March this year to include DJI and several other Chinese firms, seeking to ban imports of Chinese-made drones and routers.