--- title: "Microsoft asks Trump to spare Chinese AI transceivers from an FCC ban; Eoptolink jumps 17%" description: "US rivals cannot replace the Chinese volume for at least two years, so an abrupt ban would strand AI chips Microsoft and other cloud buyers already own; the market re-rated Eoptolink 17% higher in one session." publisher: "The Inference" section: "Data Center" published: 2026-11-12T17:18:29.671Z modified: 2026-11-12T17:18:29.671Z canonical: https://theinference.org/article/microsoft-urges-the-white-house-to-spare-chinese-made-ai-transceivers-from-an-fcc-ban-eoptolink-jumps-17 language: en keywords: "Microsoft, Eoptolink, Optical Transceivers, FCC, China, AI Data Centers" --- # Microsoft asks Trump to spare Chinese AI transceivers from an FCC ban; Eoptolink jumps 17% > US rivals cannot replace the Chinese volume for at least two years, so an abrupt ban would strand AI chips Microsoft and other cloud buyers already own; the market re-rated Eoptolink 17% higher in one session. A tiny part worth billions sits between Washington and the AI buildout. [Microsoft](https://theinference.org/markets/companies/microsoft) has pressed the Trump administration to halt a Federal Communications Commission (FCC) plan to ban new Chinese-made optical transceivers, the modules that turn electrical signals into light so fiber-optic cables can link servers inside AI data centers, [Reuters reported on November 10](https://finance.yahoo.com/technology/ai/articles/microsoft-pushes-trump-halt-chinese-120408623.html) [4]. Eoptolink Technology, one of the two Chinese firms that make them, jumped 16.97% to CNY 215.00 on November 11, a $44.9 billion market value, [as the market priced Chinese supply staying in the game](https://theinference.org/article/nvidia-names-taiwan-not-china-for-a-15x-optical-capacity-build-eoptolink-fell-12-3-innolight-8-8) [2]. ![Two Cisco SFP-10G-SR optical transceiver modules on a white surface, both labeled Made in China](https://storage.googleapis.com/theinference-public/img/ccdddb0042b20f70.jpg) *Two 10-gigabit Cisco SFP transceiver modules, both labeled "Made in China". The modules under FCC discussion are far faster, up to 3.2 terabits per second, but they are the same kind of part: a pluggable component that turns electrical signals into light so fiber can link servers. (ITEagle Europe - Sebastiaan Broekhoven)* Washington's side of the fight is security: US officials worry Beijing could use the modules to steal data, install malware or disrupt service inside American data centers [4]. The FCC is preparing the restriction at President Trump's request, first signaled in August [5]. ## America cannot swap them out China holds about two-thirds of global transceiver unit supply, Counterpoint Research estimates, and the larger Chinese rival, Zhongji Innolight, alone took roughly 27% of 2025 data-center transceiver revenue; it sits on the Pentagon's list of Chinese military-linked companies [1]. Both Innolight and Eoptolink sell to top US hyperscalers [1]. Counterpoint and a Foundation for American Innovation report reach the same conclusion: the two listed US optical-component makers, [Coherent](https://theinference.org/markets/companies/coherent) and [Lumentum](https://theinference.org/markets/companies/lumentum), lack the cleanroom capacity, packaging infrastructure and yield scale to absorb that volume within 12 to 24 months [1]. Microsoft had 35 US data centers under construction and 134 more planned as of Cleanview's count [1]. The Information Technology Industry Council (ITI) says cloud companies have already bought their AI chips, and its general counsel John Miller warns those chips "could just sit there waiting around unutilized" without the transceivers to connect them [6]. ## Chinese transceiver makers keep twice the profit American rivals do *Chart: **Eoptolink kept 35.1% of revenue as net profit, Coherent 16.2%** Bars ranking July-September 2026 quarterly net margins: Eoptolink 35.1%, Innolight 30.9%, Coherent 16.2%, AAOI 2.3%, Chinese makers in the house gold, US makers muted steel* *Net income as share of revenue, July-September quarter, per figures compiled by Schulz Research. Source: [3]. [3]* Same product layer, same July-September quarter: Eoptolink kept 35.1% of revenue as net profit, Innolight 30.9%, Coherent 16.2% and Applied Optoelectronics (AAOI), the smaller US listed maker, 2.3% [3]. The Chinese vendors are not just bigger; they keep roughly double the profit of their American rivals. *Chart: **Coherent's net margin took three years to reach 16.2%, still under half of Eoptolink's 35.1%** Line chart of Coherent's quarterly net margin from late 2023 through September 2026, rising from about -2.4% to 16.2%, with a reference line at Eoptolink's 35.1%* *Coherent's net margin by quarter, from its SEC filings (source [8]). The reference line is Eoptolink's 35.1% net margin for the same July-September 2026 quarter, per figures compiled by Schulz Research (source [3]). [8][3]* ## The likely ban spares what China ships today A hard ban would be the bull case for [Coherent and Lumentum](https://theinference.org/article/coherent-s-proposed-fcc-ban-lands-in-2028-its-chinese-laser-supply-is-a-601-million-letter-of-intent), whose chief executive says calendar 2027 is already "basically booked out" [7], and a cost shock for hyperscaler capex. The likely fix instead: a threshold restricting only 3.2-terabit-per-second parts, which Chinese makers do not ramp until 2028, with installation from 2029 [1]. Watch whether that threshold holds. If it does, the pricing power behind those margins keeps compounding for quarters longer than US rivals can answer. ## Takeaway China makes about two-thirds of the world's optical transceivers and its two biggest makers keep roughly double the net margin of their US rivals, so an abrupt ban would leave AI chips Microsoft already owns without the parts that connect them. ## Sources 1. [Hoodline, Microsoft Lobbies Trump to Kill Ban on Chinese Parts Powering AI Data Centers, November 2026](https://hoodline.com/2026/11/microsoft-lobbies-trump-to-kill-ban-on-chinese-parts-powering-ai-data-centers/) 2. [Global Banking & Finance Review, Eoptolink Technology Inc rises 16.97% in Wednesday's session, 11 November 2026](https://www.globalbankingandfinance.com/eoptolink-technology-inc-300502-sz-rises-2026-11-11/) 3. [@Schulz_Research on X, transceiver net margins Jul-Sep quarter, 10 November 2026](https://x.com/Schulz_Research/status/2118790286377931067) 4. [Yahoo Finance (citing Reuters), Microsoft pushes Trump to halt Chinese data center component ban, 10 November 2026](https://finance.yahoo.com/technology/ai/articles/microsoft-pushes-trump-halt-chinese-120408623.html) 5. [heise online, U.S. tech lobby fights ban on optical transceiver imports from China, 11 November 2026](https://www.heise.de/en/news/U-S-tech-lobby-fights-ban-on-optical-transceiver-imports-from-China-11520001.html) 6. [Tom's Hardware via MSN, Microsoft lobbies against potential ban on Chinese optical networking gear for AI data centers, 10 November 2026](https://www.msn.com/en-us/news/other/microsoft-lobbies-against-potential-ban-on-chinese-optical-networking-gear-for-ai-data-centers/ar-AA2h9NLO) 7. [24/7 Wall St., Applied Optoelectronics Surges 12%, Lumentum Jumps 11% as CoreWeave's Results Revive AI Trade, 11 November 2026](https://247wallst.com/investing/2026/11/11/applied-optoelectronics-surges-12-lumentum-jumps-11-as-coreweaves-results-revive-ai-trade-coherent-climbs-7/) 8. [Coherent, quarterly figures from its SEC filings, retrieved 12 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000820318) --- Microsoft asks Trump to spare Chinese AI transceivers from an FCC ban; Eoptolink jumps 17% — The Inference. Canonical: https://theinference.org/article/microsoft-urges-the-white-house-to-spare-chinese-made-ai-transceivers-from-an-fcc-ban-eoptolink-jumps-17