Optical stocks have a China problem that most investors are missing

Chinese companies control a significant portion of the optical component supply chain, including manufacturing and rare materials processing. U.S. export restrictions on advanced technology to China have created supply pressures for American optical equipment makers that depend on Chinese-manufactured inputs. The restrictions, implemented under Biden and Trump administrations, do not cover all optical components used in non-military applications. U.S. optical equipment manufacturers including Lumentum Holdings and II-VI Incorporated have reported supply chain exposure to China in regulatory filings.

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