US Optical Module Ban Could Delay AI Deployments by Several Quarters

FCC import ban on Chinese optical modules risks disrupting supply chains, potentially delaying AI cluster deployments and increasing costs for US cloud providers.

Woofun AI reports that a proposed FCC import ban on Chinese optical modules would primarily impact American cloud providers rather than Chinese suppliers. Chinese manufacturers currently account for approximately two-thirds of global unit supply and 60% of revenue, with InnoLight holding 27% market share. Western suppliers lack the capacity to fill this gap within 12-24 months, potentially causing multi-quarter delays in AI cluster deployments and raising material costs. The analysis highlights that the supply chain is highly interdependent, with Chinese firms relying on DSP chips from Broadcom and Marvell, while also noting that Chinese manufacturers have partially relocated capacity to Thailand.