A-share optical chip stocks were hit hard on the first trading day after the National Day holiday, caught between policy worries and price-cut rumors, as market sentiment swung sharply negative.
On October 8, Yuanjie Semiconductor Technology Co.,Ltd. (688498), Suzhou Everbright Photonics Co.,Ltd. (688048) and Suzhou Dongshan Precision Manufacturing Co.,Ltd. (002384) each locked limit-down at 20%, Henan Shijia Photons Technology Co.,Ltd. (688313) fell more than 16%, and Jiangsu Etern Company Limited (600105) dropped more than 7%. The optical chip index slid over 5% in a single day.
According to Securities Times, two negative developments that kept building over the National Day holiday drove the selloff: concerns about potential new U.S. FCC regulatory rules targeting Chinese optical modules, and market rumors that 1.6T optical chip prices are under pressure.
FCC Policy Speculation: Report Wording Laced With Uncertainty
According to Shanghai Securities News, the core source that triggered market panic was a research report published by Morgan Stanley on October 1.
The report judged that potential FCC restrictions on Chinese-made optical modules would most likely be phased in starting with the 3.2T generation, and that a "U.S. content exemption" path could exist 鈥?if the value share of U.S. companies in the bill of materials reaches 65%, the related products could still be allowed into the U.S. market. Some analysts argue that if this framework is implemented, domestic module makers may increasingly choose U.S.-made lasers and DSPs to meet the threshold, potentially squeezing the substitution space and overseas channels for domestic optical chips.
The report's entire source of information was an exchange between Morgan Stanley's strategy team and a Washington legal team. It used speculative language throughout such as "potential", "likely" and "could", and cited no formal FCC rule text, no record of proposal discussions, and no official release.
Meanwhile, according to Securities Times, the U.S. FCC will implement new rules FCC26-50 on October 13, bringing core electronic components produced by certain restricted companies under equipment authorization restrictions. This is seen as another trigger for the sharp slump in the optical module sector. Combined with the U.S. S.5548 bill on September 25 and Oracle's "force majeure" notice, market sentiment was released in a concentrated way after being pent up during the holiday.
Industry View: Impact Relatively Controllable, Short-Term Panic Exceeds Substance
Several industry insiders take a relatively cautious and optimistic view of the policy shock. According to Shanghai Securities News, industry insiders analyzed that the implementation of the relevant restrictions carries very strong uncertainty and the impact is relatively controllable.
From a product cadence perspective, the potential restrictions target 3.2T-generation products, whose initial shipments are expected to only begin ramping in 2028. The mainstream products currently being delivered at scale are 800G and 1.6T, neither of which falls within the scope of the restrictions. Some brokerage analysts also noted that 800G/1.6T products already in large-scale commercial use are not restricted, and the existing earnings base of leading domestic manufacturers is safe in the short term.
From a cost structure perspective, U.S.-sourced content in the BOM of high-end products 鈥?including DSP, Driver, TIA and PIC 鈥?already accounts for a considerable share, while lasers account for a relatively low share of cost, and cost composition varies across products. This policy may not necessarily deal a direct blow to lasers. From an industry ecosystem perspective, rising silicon photonics penetration is already an industrial reality, the domestic supply chain is irreplaceable in North American AI computing buildout, and its bargaining power continues to rise across the full chain spanning silicon photonics platforms, lasers and modularization.
Analysts also pointed out that the essence of U.S. policy is not a comprehensive embargo, but rather the use of a "value share" threshold to lock high-value segments (lasers, DSP) into the U.S. supply chain while retaining China's low-margin assembly capacity to maintain global supply chain stability 鈥?essentially a redistribution of industry chain profits.
Regarding the market volatility triggered by the recent Morgan Stanley report mentioning that "potential FCC rules could restrict Chinese optical modules in the 3.2T generation", a staff member on Suzhou Everbright Photonics Co.,Ltd. (688048)'s investor hotline said the company has noted the content of Morgan Stanley's research notes. First, the Morgan Stanley report is not a formal document, and the authenticity of the information and its specific impact remain uncertain. Second, the speculation targets 3.2T optical modules, while volume ramp-up for 3.2T itself is expected only in 2028 to 2029. The current market is still dominated by 800G and 1.6T, so there is no substantive impact on the domestic optical chip industry in the short term.
Price-Cut Rumors: Short-Term Pressure Coexists With Structural Supply and Demand
Beyond policy factors, market rumors of falling 1.6T optical chip prices also intensified panic.
According to Securities Times, some sources said 1.6T optical chip prices have already declined, because the market overestimated short-term chip premiums, the smooth ramp-up of silicon photonics solutions exposed the cost floor, and customers' purchasing mindset shifted.
From institutional forecasts, some institutions expect the average selling price (ASP) of 1.6T optical chips to decline gradually from 8,174 yuan in 2025, falling about 11% year on year to 7,301 yuan in 2026, with the decline possibly widening to 19% in 2027 to 5,909 yuan. Goldman Sachs forecast synchronous price cuts on the optical module side, with the average price of 800G optical modules dropping from about $440 to $314 by 2028. On the low-end side, overcapacity for 100G and below has exceeded 45%, and 25G prices have fallen more than 30% over the past year.
However, real supply-side constraints provide some support. According to Nomura estimates, demand for 1.6T chips exceeds 20 million units, but due to 3nm capacity and yield limits, actual shipments are only 16 million to 17 million units, and the indium phosphide substrate shortage will exceed 70% in 2026, providing structural support for prices to rise rather than fall. This means the current industry structure presents a complex mix of "tight volume and falling prices", rather than a full-scale collapse in demand. For investors, how to distinguish short-term sentiment disturbances from medium- to long-term fundamental changes remains the key question.
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