US May Block Chinese Components for Data Centers...Reuters Reports Draft Bill in Progress

Potential Cost Increase for U.S. Cloud Companies

The Donald Trump administration in the United States is reportedly preparing legislation to ban the import of certain Chinese-made components used in domestic data centers in an effort to strengthen national security, according to local reports.

FCC symbol at the Federal Communications Commission (FCC) headquarters located in Washington D.C., USA. Photo by Reuters Yonhap News

Reuters, citing sources familiar with the matter on August 4 (local time), reported that the Federal Communications Commission (FCC) is drafting a bill to prohibit the import of new Chinese optical transceivers in order to protect core artificial intelligence (AI) infrastructure. Optical transceivers are components that transmit data using light for sending and receiving information between data centers.

According to the report, the bill aims to be enacted within this year. However, sources said that the FCC could revise or postpone it. Once implemented, the bill would prevent Chinese companies from stealing data, installing malicious software, or disrupting services in U.S. data centers.

If imports of new Chinese optical transceivers are blocked, it is expected to impact Chinese optical communications companies such as Zhongji Innolight. Zhongji Innolight was already included in the list of Chinese military-supporting companies compiled by the U.S. Department of Defense in June. As a result, American cloud companies such as Amazon Web Services (AWS) will need to source parts from other providers such as Coherent and Lumentum. In this scenario, industry observers predict that the cost of purchasing these related components could rise.

This content was produced with the assistance of AI translation services.