The Chinese state-owned tech company supplying signal-boosting laser amplifiers to the world’s largest financial centres
- Report reveals that Wuhan-based Accelink’s gear has been used in West for a decade
- Its clientele includes Huawei and it enjoys Nokia’s ‘complete trust’
As the row over Chinese technology giant Huawei’s role in fifth-generation (5G) networks rumbles on, some financial telecoms networks in the United States and Europe regarded as critical to economic stability and national security are using hardware, patented technology and software codes created by a company controlled by the Chinese government.
Shenzhen-listed Accelink Technologies Corporation, a company based in Wuhan, Hubei province, was formerly the Ministry of Posts and Telecommunications’ Research Institute for Solid-state Components. It has supplied signal-boosting laser amplifiers to some of the world’s largest financial centres for nearly a decade, according to a report seen by the South China Morning Post.
These components speed up data transmission, enabling high-frequency trades that can make millions of dollars in situations where milliseconds are critical.
The report, drafted this year by the China Institute of Telecommunications, a government-run association for scientists and engineers, identified some of the projects and the Western companies that use Accelink technology.
They included high-speed financial data links between New York and Chicago, London and Frankfurt. Some non-financial networks across Europe used Chinese components, although the report did not say which ones.
Accelink had supplied devices to Nokia, Infinera, Sanmina and Flex, the document said. The number of laser amplifiers it has sold since 2008 was not revealed, but sales to Western networks were worth nearly US$80 million by the end of last year.
The impending roll-out of 5G networks across the globe was expected to increase that demand, according to industrial sources.
Is 5G the ‘next big thing’ for investors?
Accelink’s revenues rose fivefold between 2010 and 2018 to last year’s record 5 billion yuan (US$740 million), with a record 353 million yuan in net profit in 2018.
Accelink is also a major supplier of amplifiers to Huawei, the world’s biggest optical transmission and network access equipment company.
Possessing what it claimed was the world’s most advanced technology for high-speed, large-volume data transmission, Accelink said its latest amplifiers could send a signal in a 400-gigabyte-bandwidth network a distance of 500km non-stop – a world record.
In the past, some large fibre networks needed a repeating station every 80km (50 miles) to move data, industry sources said, increasing construction costs and transmission delays.
Nokia said it had complete trust in Accelink.
The Finnish company, whose subsidiary Alcatel-Lucent also uses Accelink amplifiers, said: “Regardless of where Nokia’s products and services are manufactured or made, the same criteria are applied to ensure security and integrity, and a central team at our international headquarters verifies security status and compliance.”
How Huawei beat America’s anti-China 5G propaganda war in Southeast Asia, years before it even began
Boosting an optical signal is a tricky business. The light running through the fibre needs to be as strong as possible to travel a long distance, but if it was too strong it could burn out the network. To balance performance and safety, scientists and engineers used sophisticated software to control the amplifier.
A cybersecurity expert warned that the security risks surrounding laser amplifiers might have been underestimated.
Dr Marija Furdek Prekratic, an assistant professor at department of electrical engineering at Chalmers University of Technology in Gothenburg, Sweden, said there were vulnerabilities in optical amplifiers that could be exploited by attackers who had access to the device, especially if it came from an unreliable source.
Prekratic said attackers could tamper with the amplifier’s controls or try to gain access to the data being transmitted.
While amplifiers were typically put into secure locations, she said: “If the device itself comes from an untrustworthy party, the intrusion is practically already done.
“Until recently, these issues have been receiving relatively little attention but this trend seems to be turning,” she said.
While Chinese companies have made big strides into the European market, the US has tried to persuade its allies to close its doors to these businesses.
Sun Changzheng, professor of electronic engineering at Tsinghua University, said such efforts were doomed to fail.
Chinese companies like Accelink had invested heavily in telecoms research and development and had achieved breakthroughs that allowed them to make competitively priced, high-performance products that worked well.
“For business, this is something hard to resist,” he said.
Sun dismissed the possibility that the Chinese government or companies would use the amplifiers to attack Western facilities.
“The amplifier has only one task, and this relatively simple function means it is extremely difficult to plant a back door in the hardware or codes for unauthorised access,” he said.
Accelink and Western companies listed in the report and approached by the Post declined to comment.
