U.S. FCC's Proposed China Optical Module Ban Would Hit U.S. Cloud Vendors Harder Than Suppliers, Counterpoint Says

ZTE-1.17%
COHR0.72%
According to Counterpoint Research, if the U.S. Federal Communications Commission enforces its proposed ban on Chinese-made optical modules, it would primarily impact American cloud vendors rather than Chinese suppliers. ZTE subsidiaries hold approximately 27% of global data center optical module revenues, followed by Coherent at 17%, while Chinese manufacturers collectively account for roughly two-thirds of unit supplies and 60% of optical communication module revenues globally. Counterpoint noted that Western suppliers including Coherent and Lumentum lack sufficient cleanroom capacity and automated packaging infrastructure to fill the supply gap within 12-24 months, potentially delaying AI cluster deployments by several quarters and raising material costs for cloud vendors. Chinese module makers have already begun shifting production outside the region, with plants established in Thailand to mitigate supply chain risks.
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