#TrendForce estimates that Chinese optical transceiver manufacturers will account for approximately 56% of global contract manufacturing capacity in 2...

What happened

TrendForce estimates that Chinese optical transceiver manufacturers will account for approximately 56% of global contract manufacturing capacity in 2026, with North America-focused suppliers in China including Innolight, Eoptolink, and Cambridge Industries Group (CIG) collectively accounting for around 46% of global capacity. Reports indicate Microsoft opposes a proposed ban on Chinese optical transceiver modules, highlighting how AI competition has extended into the interconnect supply chain. Given Chinese manufacturers' advantages in scale, cost, and mass production, alternative suppliers would struggle to replace their output in the short term, and any sudden disruption could leave GPUs underutilized because the network infrastructure is not ready. Microsoft is pursuing multiple technological approaches in parallel, including jointly evaluating the high-density pluggable XPO architecture with Arista and advancing MicroLED interconnect technology with MediaTek, which uses numerous parallel low-speed channels; these initiatives remain at the validation or pre-commercialization stage and cannot immediately fill the existing supply gap. The report expects that, amid lobbying from AI industry players, the US will calibrate the pace of its export control measures based on the maturity of alternative capacity across the relevant supply chains. The ban remains a proposal and has not taken effect.

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Source and time

Source: TrendForce Official (Market Data) · 11/11/2026 · View original source