Citi | China Telecom Infrastructure: Assessing the Impact of Potential US FCC Regulatory Action on China's Optical Module Industry
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Key Views
- Optical transceivers appear in FCC 26-50 only as an illustrative example under proposed hardware/software BOM disclosure requirements; Reuters reports reflect a draft stage only.
- Genuine restrictions would strip most transceiver supply from US AI construction, with consequences US firms cannot quickly absorb.
Outlook
US optical companies are building highly automated local production lines, but capacity ramps take time and appear insufficient for coming AI demand. A China-only regime would ease DSBJ and Eoptolink exposure as overseas capacity rises.
Recommended Securities
- Dongshan Precision (DSBJ, 002384.SZ): rating 1, price Rmb195.27, target Rmb350; high geopolitical exposure from direct US exports.
- Eoptolink Technology (300502.SZ): rating 1, price Rmb420.95, target Rmb701; high exposure.
- Suzhou TFC Optical Communications (300394.SZ): rating 1, price Rmb230.68, target Rmb419; passive components bring indirect impact and the best defense.
Key exhibits
Exhibit 1
Exhibit 2
