US May Ban Chinese Optical Transceivers, Offering Taiwan-Based Optical Communication Firms New Order Opportunities

According to Reuters, the Trump administration is preparing a ban on Chinese-made optical transceiver modules entering the United States, aiming to support critical infrastructure underpinning the AI boom. The move is intended to prevent Chinese manufacturers from stealing data, embedding malicious software, or disrupting US data centers that house AI model training and inference chips.

China has become the dominant global supplier of high-speed optical modules, leveraging its complete supply chain, cost advantages, and mass production capabilities—especially in the AI data center market. If cloud service providers (CSPs) are forced to reduce reliance on Chinese suppliers, existing orders will need alternative sources. Companies already certified by North American customers and capable of mass-producing high-speed products are expected to benefit first.

Among Taiwanese firms, potential beneficiaries include those involved in CPO (co-packaged optics), upstream III-V compound semiconductor epitaxial wafer manufacturers, and optical transceiver module producers.

CPO (Co-Packaged Optics) Optical Component Makers:

CPO-focused optical module makers that can directly supply 800G and 1.6T modules are in the spotlight. Analysts suggest evaluating whether their product lines have penetrated the supply chains of major US cloud providers. Key players include Glory Star (6442-TW), which has entered the supply chain of one of North America’s top four CSPs, and WaveOptics (3163-TW), a NVIDIA supplier. WaveOptics’ 800G fiber optic kits and patch panels have already been designated for use by NVIDIA.

Suncore (3363-TW) holds dozens of patents in FAU (Fiber Assembly Unit) technology and began delivering 1.6T FAU products in the second half of 2023. The company is advancing toward even higher transmission speeds, aiming to reach 6.4T specifications by 2027. Others, including JDSU-KY (4977-TW) and Forward (4908-TW), may also benefit.

III-V Semiconductor and Optical Transceiver Module Makers:

Among Taiwan’s III-V semiconductor manufacturers, those supplying indium phosphide (InP) substrates are gaining attention. Key firms include United Microelectronics (3081-TW), Global Communication Technologies (GCT-KY, 3081-TW), IET-KY (IntelliEpi, 3081-TW), Newlight (2455-TW), Win Semiconductors (3105-TW), and Epistar (3714-TW).

United Microelectronics has secured orders from major US cloud providers and is aggressively expanding capacity. Analysts estimate its profits could surge in the second half of 2023. GCT-KY and IET-KY have long specialized in compound semiconductors and high-end epitaxy, and their shipments are expected to grow steadily as demand for 1.6T high-speed optical modules surges.

Moreover, InP substrate supply shortages have persisted over the past two years. Since China tightened export controls on InP in February 2025, licensing delays have affected both US and Asian manufacturers. Coherent, backed by NVIDIA, warned in its May 2023 earnings call that InP shortages could persist through 2026 and 2027. Currently, IET-KY sources over 90% of its InP substrates from Japanese suppliers, with a small portion from European vendors.

CPO-focused optical module makers include Lightwave (4979-TW), which specializes in high-speed optical components and has seen improving operations due to CSP upgrades; United Optronics (3450-TW), which has doubled its high-speed laser die packaging capacity year-on-year and significantly increased high-end product mix; and Accton (2345-TW), a key AI switch supplier rapidly scaling up 800G product shipments.

Analysts note that the US policy has not yet clarified whether it will target specific product types or impose a full ban, nor how Chinese companies or those manufacturing in Southeast Asia will be classified. Meanwhile, China’s Zhongji旭創 is shifting production overseas to mitigate geopolitical risks, making the final determination of product origin a critical factor.