Global AI Trend Tracker: What if US content reaches 65% of transceiver BOM cost?

We have observed considerable volatility in China's optical communication stocks recently, following a Reuters report in early August on potential FCC ban on Chinese optical transceivers. In recent days, many investors have been discussing a potential exception - that China's transceiver makers could still ship next-gen 3.2T transceivers to US customers if US components represent >65% of total BOM cost. If this scenario materializes, we believe it would be slightly more positive for the optical transceiver makers in China. Business continuity for leading optical transceiver makers, i.e. InnoLight (300308 CH/3308 HK, Buy) and Eoptolink (300502 CH, Not rated), would not be meaningfully disrupted, although there is a risk of rising costs if they need to buy more US components. We believe the discussion of a "65% US content" requirement is not without precedent. Based on our estimates, optical lasers/chips, DSP, TIA/driver chips, and PD chips could make up 66%~72% of BOM costs of 800G or 1