--- title: "Coherent's proposed FCC ban lands in 2028; its Chinese laser supply is a $601 million letter of intent" description: "The FCC ban being weighed covers 3.2-terabit parts that ramp in 2028, when Coherent's $20 billion contracts also start paying; 2027 is sold out either way. What remains unpriced is the indium phosphide behind the ramp, still backed by a letter of intent, not a contract." publisher: "The Inference" section: "Chips" published: 2026-11-11T19:16:29.946Z modified: 2026-11-11T19:16:29.946Z canonical: https://theinference.org/article/coherent-s-proposed-fcc-ban-lands-in-2028-its-chinese-laser-supply-is-a-601-million-letter-of-intent language: en keywords: "Coherent, Optics, Export Controls, FCC, Semiconductors, China" --- # Coherent's proposed FCC ban lands in 2028; its Chinese laser supply is a $601 million letter of intent > The FCC ban being weighed covers 3.2-terabit parts that ramp in 2028, when Coherent's $20 billion contracts also start paying; 2027 is sold out either way. What remains unpriced is the indium phosphide behind the ramp, still backed by a letter of intent, not a contract. The FCC's proposed ban on Chinese optical transceivers read as a windfall for [Coherent](https://theinference.org/markets/companies/coherent), and the stock jumped 18% on it. Read the dates and the story changes: the threshold under consideration covers parts that do not ramp until 2028, the same window Coherent's own $20 billion contracts start paying. Calendar 2027 is already sold out. A ban moves price, not volume. And the input behind Coherent's expansion still traces to China. ## The rule and the revenue land in the same window [Reuters reported on November 10](https://www.reuters.com/business/media-telecom/microsoft-presses-trump-scuttle-expected-ban-chinese-data-center-technology-2026-11-10/) that [Microsoft](https://theinference.org/markets/companies/microsoft), which has 35 US data centers under construction and 134 more planned, is lobbying the administration to drop the ban [1]. China holds about two-thirds of the global transceiver market, led by Zhongji Innolight and Eoptolink, and US makers lack the scale to replace them [1]. The threshold being weighed covers 3.2-terabit parts, whose production is not expected to ramp until 2028, with wide installation in 2029 [1]. That timing sits exactly on Coherent's own buildout. Its second PhotonLink agreement, $20 billion over five years with an unnamed AI customer, begins ramping revenue in early 2028 [2]. On the November 4 call, chief executive Jim Anderson [said calendar 2027 is "basically booked out"](https://finance.yahoo.com/technology/articles/microsoft-pushes-trump-halt-ban-182245631.html) and customers are now booking 2028 [2][3]. *Chart: **Capex is outrunning revenue as Coherent builds out indium phosphide** Line chart of Coherent's quarterly revenue and capital expenditure from the quarter ended June 2024 to the quarter ended September 2026, with capex rising from about $0.1 billion to $0.78 billion while revenue rises from $1.31 billion to $2.37 billion.* *Quarterly revenue and capital expenditure, $ billions. Capex is capital spending as reported. Source: Coherent quarterly figures from its SEC filings. [9]* ## The unpriced input Coherent doubled its indium phosphide laser capacity a quarter ahead of plan and plans to more than double it again by the end of 2027; management called the material its binding constraint for the past 18 months [2]. The new supply behind that ramp is a letter of intent: Optics Technology Holding, a Shenzhen-listed Chinese maker, [signed an LOI to supply indium phosphide substrates worth at least $601 million](https://www.marketscreener.com/news/optics-technology-to-supply-indium-phosphide-substrates-to-us-based-company-ce785fd3d981f120) [4][5]. No binding contract, no price, no schedule is public. [Beijing's export licensing on indium phosphide wafers](https://theinference.org/article/ai-demand-outruns-axt-s-doubled-wafer-supply-the-up-to-545-million-fix-needs-beijing-s-sign-off), in force since February 2025, was never suspended under the trade truce [6]. The de-China story still runs through a Chinese permit office. ## Whose money moves The market already round-tripped: $228.58 on November 9, $213.66 a day later [7][8]. That prices a 2029 margin story while the nearer facts are the Q2 revenue guide of $2.55 billion to $2.75 billion, capex that reached $776 million in Q1, and an LOI that must become a contract [2][9]. Watch those, not the headline. ## Takeaway The FCC ban being weighed and Coherent's $20 billion contracts land in the same 2028 window, while 2027 is sold out; the unpriced risk is the indium phosphide supply, still only a letter of intent under Chinese export licensing. ## Sources 1. [Reuters (Alexandra Alper), Microsoft presses Trump to scuttle ban on Chinese data center tech, 10 November 2026](https://www.reuters.com/business/media-telecom/microsoft-presses-trump-scuttle-expected-ban-chinese-data-center-technology-2026-11-10/) 2. [The Buildout, Coherent (COHR) Q1 FY2027 Earnings Recap, 2026](https://thebuildout.co/earnings/recap/COHR/CY2026Q4-FY2027Q1) 3. [Yahoo Finance, Microsoft Pushes Trump to Halt a Ban on Chinese Optics. Coherent Is Already Basically Booked Out, 10 November 2026](https://finance.yahoo.com/technology/articles/microsoft-pushes-trump-halt-ban-182245631.html) 4. [MLQ.ai, Microsoft is pressing the Trump administration to drop an expected ban on Chinese optical transceivers, 10 November 2026](https://mlq.ai/news/microsoft-is-pressing-the-trump-administration-to-drop-an-expected-ban-on-chinese-optical-transceivers-for-data-centers-reuters-reports/) 5. [MarketScreener / MT Newswires, Optics Technology to Supply Indium Phosphide Substrates to US-Based Company, 9 November 2026](https://www.marketscreener.com/news/optics-technology-to-supply-indium-phosphide-substrates-to-us-based-company-ce785fd3d981f120) 6. [Morningstar / MarketWatch (Jurica Dujmovic), Optical stocks have a China problem that most investors are missing, 7 August 2026](https://www.morningstar.com/news/marketwatch/20260807105/optical-stocks-have-a-china-problem-that-most-investors-are-missing) 7. [GuruFocus, Coherent Corp (COHR) Surges 18.12% Intraday, Leading S&P 500 Gains, 9 November 2026](https://www.gurufocus.com/news/9185634/coherent-corp-cohr-surges-1812-intraday-leading-sp-500-gains-on-november-09-2026) 8. [Benzinga, Here's How Much $100 Invested In Coherent 10 Years Ago Would Be Worth Today, 11 November 2026](https://www.benzinga.com/news/26/11/63120328/here-s-how-much-100-invested-coherent-10-years-ago-would-be-worth-today) 9. [Coherent, quarterly figures from its SEC filings, retrieved 11 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000820318) --- Coherent's proposed FCC ban lands in 2028; its Chinese laser supply is a $601 million letter of intent — The Inference. Canonical: https://theinference.org/article/coherent-s-proposed-fcc-ban-lands-in-2028-its-chinese-laser-supply-is-a-601-million-letter-of-intent