Microsoft Reportedly Presses Washington to Drop Proposed Chinese Optics Ban

Microsoft, together with other firms and industry associations, has urged the Trump administration to abandon a proposal that would prohibit imports of Chinese optical transceivers, a component used in AI data centres, according to Reuters reporting of 10 November 2026 that cites three people familiar with the matter (Kiprinform). The ban is not in force (WindowsForum). The proposal concerns new models of Chinese optical transceivers (Business Recorder); Chinese suppliers hold roughly two-thirds of the global market, according to Counterpoint Research (AI Weekly).

The facts

• Microsoft declined to comment, and the White House and the FCC did not respond to requests for comment (Kiprinform).
• The Federal Communications Commission, which oversees the US telecom industry, is working on the restriction (Business Recorder). The FCC has not publicly discussed the proposal (AI Weekly).
• Reuters first reported in August 2026 that the administration wants to ban US imports of new models of Chinese optical transceivers (Business Recorder).
• The stated rationale is concern that Beijing could use the devices to steal data, plant malware or disrupt operations (Clash Report).
• Two of the sources said a threshold of 3.2 terabits per second is under consideration (Business Recorder).
• The report rests on anonymous sources. The Chinese embassy in Washington also did not immediately respond to Reuters (FourWeekMBA).
• Unnamed sources said the proposal has not been finalised and may not proceed (Capital Brief).

The regulatory background

The FCC adopted its Third Report and Order and Third Further Notice of Proposed Rulemaking (FCC 26-50, ET Docket 21-232) on 22 July 2026 and released it on 23 July 2026, according to a FCC ID news summary. The FCC documents are available as FCC 26-50 and a statement by Chairman Brendan Carr. The order was published in the Federal Register on 11 September 2026 (Federal Register, Volume 91 Issue 175).

The research gathered for this article gives the adoption and publication dates of that order but not trade or import volumes. The transceiver-specific ban has been reported but not finalised, per Capital Brief.

In Congress, a bipartisan group of lawmakers introduced legislation in September to bar the federal government from equipping sensitive government systems with Chinese-made optical transceivers (Business Recorder). One source dates the bill's introduction to 25 September (Asia Times).

Microsoft's reported position

According to the sources cited by Reuters, Microsoft is among the companies and trade groups arguing that a ban could irreparably damage the US edge over China in the AI race by further slowing the data centre rollout (Mezha).

Microsoft and other technology companies met officials from the White House Office of Science and Technology Policy and the National Security Council in September to explain the potential impact of restrictions (The Defense News).

Industry opposition

The Information Technology Industry Council (ITI), a tech lobbying group, has publicly urged the administration not to move forward with a ban. Its general counsel, John Miller, said the move "really threatens to arguably grind (the data center rollout) to a halt" (Business Recorder).

On 13 August, ITI wrote to the FCC urging it to "refrain from adding optical transceivers" to a trade blacklist (Tradingpedia).

Market structure and supply

Chinese suppliers, led by Eoptolink and Zhongji Innolight, control roughly two-thirds of the global optical transceiver market. Another account of Counterpoint's estimates puts Chinese makers at about 60% of datacom transceiver revenue (FourWeekMBA); the two figures use different metrics.

Other estimates for individual companies also diverge by metric:

• LightCounting ranks InnoLight first in global optical transceiver shipments, with a 23.4% share in 2025, according to a FB-LINK Technology ranking.
• InnoLight reports a 21.2% share of the broader optical interconnect solutions market in 2025 (DC Market Insights).

On the US side, only two US-based companies produce the optical transceivers that data centres need: Coherent and Lumentum (Tom's Hardware).

The leading Chinese producers also report heavy exposure to the US market. Overseas-revenue shares for the two companies differ across sources.

Company financials

For full-year 2025, InnoLight reported revenue of ¥38.24 billion, up 60.3%, with net profit up 108.8%. Eoptolink reported ¥24.84 billion, up 187%, with net profit up 236% (FB-LINK Technology). These figures reach this article through a secondary source relaying company filings.

What is not known yet

• Whether the FCC will formally propose or adopt a transceiver-specific import restriction. The FCC has not publicly addressed the proposal (AI Weekly).
• Whether the 3.2 terabit-per-second threshold, which two sources described as under consideration, will be retained (Business Recorder).
• How the administration has responded to the lobbying. The White House and the FCC did not respond to requests for comment (Kiprinform).
• The volume and value of Chinese optical transceiver imports into the United States: not available in sources.
• Whether the proposal will proceed at all; unnamed sources said it has not been finalised and may not proceed (Capital Brief).

Timeline

• 22 July 2026: the FCC adopts FCC 26-50; it is released on 23 July (FCC ID).
• August 2026: Reuters first reports the administration's plan to ban imports of new models of Chinese optical transceivers (Business Recorder).
• 13 August 2026: ITI writes to the FCC (Tradingpedia).
• September 2026: Microsoft and other companies meet White House officials (The Defense News).
• 11 September 2026: the FCC order is published in the Federal Register (Federal Register).
• 10 November 2026: Reuters reports the Microsoft lobbying (Kiprinform).

Evidence

The three bars measure different markets (interconnect solutions, shipments and data-centre transceiver revenue) and are not directly comparable.

— InekIA Editorial Team