'Economic & Political': A research report from Morgan Stanley knocks down A-shares, with tech stocks collectively plunging sharply, among which optical chips became the hardest hit! What is the story behind this report?
Morgan Stanley's report suggests that the U.S. may adjust import rules for optical modules in the future to increase the share of U.S. firms in the core component supply chain.
The report believes that the U.S. Federal Communications Commission (FCC) may impose restrictions on optical modules in the future. However, unlike a complete import ban, the relevant policies might set thresholds for the proportion of U.S.-sourced components, allowing qualified products to retain access to the U.S. market.
*U.S. Rumored to Tighten Import Restrictions on Optical Modules*
One potential scenario is that if at least 65% of the value in the bill of materials (BOM) for an optical module comes from U.S. companies, it may be granted exemptions from the relevant import restrictions. The report suggests that such restrictions might be implemented starting with the next-generation 3.2T high-speed optical modules, rather than directly targeting current 800G and 1.6T products. The 3.2T optical modules are expected to ramp up in volume starting in 2028 and enter broader deployment phases in 2029.
However, multiple industry insiders analyzed that the implementation of such restrictions carries high uncertainty, and the impact would be relatively manageable. In terms of information sources, the entire content of Morgan Stanley's October 1 report comes from its strategy team's communication with a Washington-based legal team—the report uses speculative language throughout, such as "potential," "likely," and "could," without any official FCC rule texts, proposal discussion records, or official announcements. In other words, the entire report is merely a policy speculation.
For companies such as Zhongji Xuchuang (Shenzhen: 300308) and Xinyi Sheng (Shenzhen: 300502), if the potential rule allows assembled optical modules with 65% U.S. content to be exempted, their overall orders may not face a significant impact, but procurement costs and profit margins still carry risks. For companies such as Yuanjie Technology (Shanghai: 688498) and Changguang Huaxin (Shanghai: 688048), market concerns center on the shrinking opportunities for domestically produced lasers to enter the U.S. high-end optical module supply chain.
*Not Official Regulation Yet*
Notably, yesterday (8th), Zhongji Xuchuang and Xinyi Sheng saw relatively small declines and were not significantly affected by the policy.
Regarding the "FCC 65%" related clauses mentioned in Morgan Stanley's report and the potential impact on stock prices yesterday, Changguang Huaxin stated that the report is a policy scenario analysis, not an officially implemented regulation or clause, and is merely "one party's opinion."
Secondly, the optical modules and their components involved in the report are 3.2T, but China's 3.2T industry is still in its early stages, with mass volume production expected only around 2028 to 2029. The main products shipped in the next two years remain 800G/1.6T, which are currently extremely tight in supply. In the short term, domestic optical chips will continue to grow rapidly.
Additionally, Yuanjie Technology stated that recent stock price fluctuations among optical chip companies were influenced by Morgan Stanley's report, and the industry-wide decline is not unique to the company. The company declines to comment on the report. From the company's perspective, current production and operations are normal, and all business activities are proceeding as usual.
Sijia Photonics (Shanghai: 688313) stated that the company has not received any news regarding price reductions for optical chips, but believes that the current sector adjustment may stem from Morgan Stanley's research report on the U.S. Federal Communications Commission (FCC) policy issued on October 1.
*Institutions Sell First*
However, behind the sharp declines of Yuanjie Technology and Changguang Huaxin, institutions that previously held large positions chose to vote with their feet and massively exited.
Post-market data for Yuanjie Technology shows that the Shanghai-Hong Kong Connect dedicated seat bought 613 million yuan (RMB, same below) and sold 423 million yuan, while four institutional dedicated seats (referring to independent channels used by mainland funds, securities proprietary trading, social security funds, insurance, QFII, and other institutions on exchanges) collectively sold 1.436 billion yuan.
Post-market data for Changguang Huaxin shows that the Shanghai-Hong Kong Connect dedicated seat bought 168 million yuan and sold 302 million yuan, while two institutional dedicated seats collectively sold 377 million yuan.
For just these two stocks, Yuanjie Technology and Changguang Huaxin, six institutions collectively sold over 1.8 billion yuan.
*A-Shares Exhibit Obvious Emotional Characteristics*
Regarding the potential impact of the policy, Zhongtai Securities stated that compared to the Philadelphia Semiconductor Index, A-share tech stocks perform stronger during optimistic periods but worse during pessimistic periods, exhibiting more pronounced emotional characteristics. A previous research report from CITIC Securities believed that the interdependence between the U.S. and Chinese optical communication supply chains is high, and the expansion pace of North American cloud providers has formed a tight coupling with the large-scale delivery capabilities of Chinese suppliers. Such restrictions would also increase procurement costs for North American cloud providers and delay their deployment schedules.
From a policy procedure perspective, the draft is still in its early stages and must go through public consultation, stakeholder negotiations, and other steps. The timing of implementation carries significant uncertainty, and the final enforcement is often weaker than the initial proposal, usually accompanied by a long transition period.
The incident is still unfolding, and some affected companies have shown initial reactions.
*New Stock King Yuanjie Technology Plunges 20% to Hit Limit Down*
Yuanjie Technology's stock price plunged 20% yesterday to hit the limit down, breaking below the 1,300 yuan level, closing at 1,290.4 yuan, making it the second-highest priced stock in A-shares. Previously, on September 30, Yuanjie Technology's stock price briefly surpassed Lianxun Instrument to become the new "stock king." According to Shanghai Securities News, regarding the sharp drop in stock price, Yuanjie Technology stated that recent fluctuations in optical chip company stock prices were influenced by Morgan Stanley's report, and the industry-wide decline is not unique to the company. The company declines to comment on the report. From the company's perspective, current production and operations are normal, and all business activities are proceeding as usual.
Therefore, the key is to continue monitoring the subsequent business developments of the affected companies.
Notably, yesterday Zhongji Xuchuang and Xinyi Sheng saw relatively small declines and were not affected by the policy.
(Investing involves risk, and each investor's risk tolerance varies; independent thinking is essential. The author may trade based on market conditions.)
*Articles published in 'Economic Edge,' signed or unsigned, represent the authors' personal opinions and do not reflect the stance of 'Economic Edge.' 'Economic Edge' serves as a platform providing free speech.
Morgan Stanley's report suggests that the U.S. may adjust import rules for optical modules in the future to increase the share of U.S. firms in the core component supply chain.
The report believes that the U.S. Federal Communications Commission (FCC) may impose restrictions on optical modules in the future. However, unlike a complete import ban, the relevant policies might set thresholds for the proportion of U.S.-sourced components, allowing qualified products to retain access to the U.S. market.
*U.S. Rumored to Tighten Import Restrictions on Optical Modules*
One potential scenario is that if at least 65% of the value in the bill of materials (BOM) for an optical module comes from U.S. companies, it may be granted exemptions from the relevant import restrictions. The report suggests that such restrictions might be implemented starting with the next-generation 3.2T high-speed optical modules, rather than directly targeting current 800G and 1.6T products. The 3.2T optical modules are expected to ramp up in volume starting in 2028 and enter broader deployment phases in 2029.
However, multiple industry insiders analyzed that the implementation of such restrictions carries high uncertainty, and the impact would be relatively manageable. In terms of information sources, the entire content of Morgan Stanley's October 1 report comes from its strategy team's communication with a Washington-based legal team—the report uses speculative language throughout, such as "potential," "likely," and "could," without any official FCC rule texts, proposal discussion records, or official announcements. In other words, the entire report is merely a policy speculation.
For companies such as Zhongji Xuchuang (Shenzhen: 300308) and Xinyi Sheng (Shenzhen: 300502), if the potential rule allows assembled optical modules with 65% U.S. content to be exempted, their overall orders may not face a significant impact, but procurement costs and profit margins still carry risks. For companies such as Yuanjie Technology (Shanghai: 688498) and Changguang Huaxin (Shanghai: 688048), market concerns center on the shrinking opportunities for domestically produced lasers to enter the U.S. high-end optical module supply chain.
*Not Official Regulation Yet*
Notably, yesterday (8th), Zhongji Xuchuang and Xinyi Sheng saw relatively small declines and were not significantly affected by the policy.
Regarding the "FCC 65%" related clauses mentioned in Morgan Stanley's report and the potential impact on stock prices yesterday, Changguang Huaxin stated that the report is a policy scenario analysis, not an officially implemented regulation or clause, and is merely "one party's opinion."
Secondly, the optical modules and their components involved in the report are 3.2T, but China's 3.2T industry is still in its early stages, with mass volume production expected only around 2028 to 2029. The main products shipped in the next two years remain 800G/1.6T, which are currently extremely tight in supply. In the short term, domestic optical chips will continue to grow rapidly.
Additionally, Yuanjie Technology stated that recent stock price fluctuations among optical chip companies were influenced by Morgan Stanley's report, and the industry-wide decline is not unique to the company. The company declines to comment on the report. From the company's perspective, current production and operations are normal, and all business activities are proceeding as usual.
Sijia Photonics (Shanghai: 688313) stated that the company has not received any news regarding price reductions for optical chips, but believes that the current sector adjustment may stem from Morgan Stanley's research report on the U.S. Federal Communications Commission (FCC) policy issued on October 1.
*Institutions Sell First*
However, behind the sharp declines of Yuanjie Technology and Changguang Huaxin, institutions that previously held large positions chose to vote with their feet and massively exited.
Post-market data for Yuanjie Technology shows that the Shanghai-Hong Kong Connect dedicated seat bought 613 million yuan (RMB, same below) and sold 423 million yuan, while four institutional dedicated seats (referring to independent channels used by mainland funds, securities proprietary trading, social security funds, insurance, QFII, and other institutions on exchanges) collectively sold 1.436 billion yuan.
Post-market data for Changguang Huaxin shows that the Shanghai-Hong Kong Connect dedicated seat bought 168 million yuan and sold 302 million yuan, while two institutional dedicated seats collectively sold 377 million yuan.
For just these two stocks, Yuanjie Technology and Changguang Huaxin, six institutions collectively sold over 1.8 billion yuan.
*A-Shares Exhibit Obvious Emotional Characteristics*
Regarding the potential impact of the policy, Zhongtai Securities stated that compared to the Philadelphia Semiconductor Index, A-share tech stocks perform stronger during optimistic periods but worse during pessimistic periods, exhibiting more pronounced emotional characteristics. A previous research report from CITIC Securities believed that the interdependence between the U.S. and Chinese optical communication supply chains is high, and the expansion pace of North American cloud providers has formed a tight coupling with the large-scale delivery capabilities of Chinese suppliers. Such restrictions would also increase procurement costs for North American cloud providers and delay their deployment schedules.
From a policy procedure perspective, the draft is still in its early stages and must go through public consultation, stakeholder negotiations, and other steps. The timing of implementation carries significant uncertainty, and the final enforcement is often weaker than the initial proposal, usually accompanied by a long transition period.
The incident is still unfolding, and some affected companies have shown initial reactions.
*New Stock King Yuanjie Technology Plunges 20% to Hit Limit Down*
Yuanjie Technology's stock price plunged 20% yesterday to hit the limit down, breaking below the 1,300 yuan level, closing at 1,290.4 yuan, making it the second-highest priced stock in A-shares. Previously, on September 30, Yuanjie Technology's stock price briefly surpassed Lianxun Instrument to become the new "stock king." According to Shanghai Securities News, regarding the sharp drop in stock price, Yuanjie Technology stated that recent fluctuations in optical chip company stock prices were influenced by Morgan Stanley's report, and the industry-wide decline is not unique to the company. The company declines to comment on the report. From the company's perspective, current production and operations are normal, and all business activities are proceeding as usual.
Therefore, the key is to continue monitoring the subsequent business developments of the affected companies.
Notably, yesterday Zhongji Xuchuang and Xinyi Sheng saw relatively small declines and were not affected by the policy.
(Investing involves risk, and each investor's risk tolerance varies; independent thinking is essential. The author may trade based on market conditions.)
*Articles published in 'Economic Edge,' signed or unsigned, represent the authors' personal opinions and do not reflect the stance of 'Economic Edge.' 'Economic Edge' serves as a platform providing free speech.
