Recently, foreign media revealed that the United States is drafting a ban on importing equipment from Chinese data centers. The Chinese Embassy in the United States and the Chinese Ministry of Foreign Affairs have responded to this issue, criticizing the U.S. actions. Experts believe that the latest series of games between the U.S. and China in the field of AI has shown a trend towards high-end chips extending to the underlying computing infrastructure, making it imperative to establish a “non-red supply chain” excluding Chinese companies.
According to Reuters, sources familiar with the matter disclosed that the U.S. government is drafting a ban on the import of new models of data center components from China, such as optical transceivers, to protect the critical infrastructure supporting the development of artificial intelligence (AI).
The FCC is reportedly drafting an embargo that will adopt a “pre-ban, post-release” approach, first prohibiting the import of all new modules, then granting waivers to non-Chinese suppliers.
FCC Chairman Brendan Carr explicitly stated that the restrictions are aimed at promoting localized production rapidly, stating, “We do not want to see thousands or even millions of these devices posing a national security risk on the market five years from now.”
When questioned about the above news by Reuters, the Chinese Embassy in the U.S. responded by demanding that the U.S. stop smearing Chinese companies and stating that any actions seriously damaging Chinese interests will be met with necessary measures.
Regarding the news of the U.S. drafting the above embargo, on the morning of August 5th, Chinese Ministry of Foreign Affairs spokesperson Lin Jian responded to reporters, stating that China opposes the U.S. generalizing the concept of national security and abusing national power to suppress Chinese companies.
Chinese affairs expert Wang He told Dajiyuan that although it is only media reports, the response from the Chinese Ministry of Foreign Affairs and the Chinese Embassy shows that, for China, this is already highly sensitive and will be taken very seriously. However, due to the overwhelming technological advantage held by the U.S., China’s counterattack chips are, in reality, very limited.
He said that the U.S. is launching a “whole-of-government” decoupling in high-tech areas such as optical modules and routers. “In terms of high technology, the decoupling between China and the U.S. is already an irreversible trend, and the Chinese Communist Party cannot stop it even if they want to.”
American economist David Huang predicts that the U.S. will formally establish a mechanism for a “trusted optical communication supply chain,” with the system already taking shape and including five core elements: enterprise identity control, inspection of manufacturing locations (product design, crystal manufacturing, packaging, and final assembly), traceability of component sources, separate certification for models and equipment, and the entity responsible for declaring imports and assemblies in the U.S. This mechanism will precisely track key components capable of collecting and controlling data.
Public information shows that optical transceivers play a critical role in modern AI data centers by swiftly converting between telecom and optical signals, enabling data to transmit at the speed of light within optical fibers. With the explosive growth of AI models, the importance of optical transceivers has become comparable to that of GPUs (graphics processing units) and high-bandwidth memory (HBM).
AI training and inference, especially for large language models, require a large amount of data transmission between GPUs/accelerators at high speeds, making optical modules one of the indispensable “neural network” hardware components in AI infrastructure, necessitating extensive use of high-speed optical modules in data centers.
According to a prediction from a U.S. bank, the global market size of optical transceivers is expected to double from less than $13 billion in 2025 to $26 billion in 2026.
According to data from technology market research firm TrendForce, Chinese companies accounted for more than half of global shipments of optical transceivers last year, with the market value of “Zhongtian Excelsior” exceeding $150 billion, accounting for a 27% market share.
Market research firm Cignal AI predicts that global shipments of 1.6T high-speed modules will likely exceed 10 million units this year, while non-Chinese camps can only provide tens of thousands of units per month.
Regarding the U.S. intent to ban Chinese-made optical modules, Cheng Zhengbing, a professor of finance and finance at Yunlin University of Science and Technology in Taiwan, told Dajiyuan, “The direction the U.S. is taking is very correct, because if you do not elevate the situation to the level of national security early on, by the time you realize how serious the matter is, it would already be too slow and costly to repair.”
American economist David Huang also told Dajiyuan that the U.S. is taking this action mainly to avoid repeating the lesson learned from the “Huawei and ZTE” incidents of the past. At that time, equipment from sanctioned Chinese companies had deeply integrated into U.S. network infrastructure, leading to slow, expensive, and incomplete dismantling and replacement work.
He said that Huawei grew big with the support of major U.S. telecom giants back then. Now, at the first sign of trouble, the U.S. is immediately taking measures to secure national defense and security, which is a wise move.
Cheng Zhengbing directly pointed out that the national security threat posed by the current optical transceiver issue is even “greater than Huawei.” Huawei equipment was primarily limited to communication and 5G, while current optical communication components directly touch on the core of the military, including drone technology, robotics, satellite command systems, and future quantum technology.
Although the measures to ban Chinese-made optical modules are favorable in the long run, Wall Street and industry research institutions have also warned that forcibly decoupling in the short term will bring significant cost pains to U.S. cloud giants (Microsoft, Google, AWS), and U.S. manufacturers like Coherent and Lumentum lack the production capacity to replace Chinese suppliers.
The intense competition between the U.S. and China in the field of AI is also causing a split in the global tech landscape.
Cheng Zhengbing stated that the U.S. has recognized that, while it may appear to be significantly ahead in AI, China is also rapidly catching up. Moreover, the AI developed by China is led by the government and directly geared towards military applications.
“In the present and future conflicts and geopolitical conflicts, China (the CCP) is playing an increasingly significant role behind the scenes. Among all these evil countries, only China (the CCP) has the ability to apply the most cutting-edge technologies of the present, including AI, chips, space technology, and integrated communication systems,” he said.
Wang He stated that the competition between the U.S. and China in the field of AI is extremely fierce, with the U.S. likely only having a lead of a few months.
He said that the confrontation between the two sides has escalated from being a struggle between two countries to mobilizing two major technical camps: the U.S. and 35 allies forming a technology alliance, leading the technology “closed-source,” while China uses organizations such as the World Internet Conference to form an alliance of 25 developing countries, raising the banner of “open-source” to break through, but the future is uncertain.
David Huang further predicted that the global tech landscape will be completely split into two independent systems: one is a “trustworthy security system” that excludes countries like China, Russia, Iran, and North Korea, serving U.S. and EU allies based on political trust; the other is a “red tech system” that adopts Chinese standards, centers around Chinese companies, and targets countries in Asia, Africa, and Latin America. This AI synaptic lightning battle dominated by security and political trust has heralded the end of the mutually beneficial tech ecosystem under globalization, shaping a new boundary for the tech Cold War.