FCC China Test Lab Ban Could Shift Work to HCT (072990.KQ)

On October 29, 2026, the US Federal Communications Commission (FCC) adopted a ban on China-based test labs: from December 1, 2028, it stops recognizing labs located in China, Analytics Insight reported. Most certification testing for US-bound electronics could move to labs in Taiwan, South Korea and other partner economies. [1]

Around 82% of electronics were tested in China in 2025. [1] The rule turns on a lab's location: labs in China and other non-reciprocating countries lose recognition. [2]

On April 30, the FCC unanimously advanced the proposal; Reuters then cited about 75% of US electronics being tested in China. [3] In mid-October, PCMag reported the October 29 vote and the December 1, 2028 start. [2]

How FCC device certification works

Phones, routers, earbuds, smartwatches and other radio-emitting products need FCC equipment authorization before US sale.

To get it, the maker sends samples to an FCC-recognized lab. Radio-frequency (RF) tests check signal power and bands, electromagnetic compatibility (EMC) tests check interference with other equipment, and SAR tests measure how much energy the body absorbs.

The test report then goes to a Telecommunication Certification Body (TCB), a private organization authorized by the US government to issue certifications on the FCC's behalf. [4]

Of 609 FCC-recognized labs, 25.1% are in mainland China, 18.4% in Taiwan and 17.9% in the US, and Chinese labs charge 30% to 70% less than US peers. [5] Yahoo Finance described Chinese device testing as a $30 billion industry. [6]

Under mutual recognition agreements (MRAs), the US accepts reports from labs its partners recognize. The US-Korea APEC Tel MRA covers the recognition of testing laboratories and acceptance of test reports. [7]

From labs in China to labs in Taiwan and Korea

First, from December 1, 2028, the FCC rejects China-lab reports. At 2025 proportions, roughly three-quarters of the testing volume has to move within about 25 months. [1]

Second, brands and contract manufacturers shift RF, EMC and SAR testing to FCC-recognized labs in partner economies. Taiwan, with the most recognized labs outside mainland China, is expected to absorb the largest share. [5][6]

Third, labs outside China get more work, so utilization and pricing may rise. Lab costs are mostly fixed, so much of the added revenue could turn into profit.

Fourth, labs in China lose this work, though one listed Chinese testing company says the ban has a very limited effect on its fundamentals. [8]

Sporton (6146.TWO), Taiwan's largest wireless certification lab, earned 87.2% of its NT$4.49 billion 2025 revenue from testing services. [9] After the draft order was published, its shares rose 17.4%, from NT$181.5 on October 7 to NT$213.0 on October 16. On May 4 they closed at NT$238.5, up 7.9% from April 30. [10]

US certifier UL Solutions (ULS) closed at $75.46 on October 29, up 4.2% that day. [11] It can take relocated work, but about 25% of its 2025 revenue came from China, where its own labs fall under the rule. [12]

HCT (072990.KQ): the Korean lab that may gain

HCT (072990.KQ) is a South Korean testing and certification company and the only private organization in Korea that holds FCC TCB status. [4] Its Silicon Valley subsidiary's RF and EMC labs gained international accreditation in 2017. [13]

HCT sits where orders move from China to partner economies. In 2024, its ICT-device testing revenue was KRW 43.2 billion, or 45.7% of total revenue of KRW 94.4 billion. [4] In 2025, revenue was KRW 107.5 billion and operating profit KRW 8.3 billion, down from KRW 11.2 billion in 2024. [14]

A rough estimate: if relocated orders lift ICT testing revenue by 10%, or about KRW 4.3 billion, an incremental margin of 30% to 40% would add KRW 1.3 billion to KRW 1.7 billion of operating profit, equal to 16% to 21% of 2025 operating profit. [4][14] The margin is a research assumption, not a company disclosure.

Taiwan is expected to be the main destination; there is no evidence yet of how much volume Korea will win. [6]

On October 29, HCT closed at KRW 3,000, down 1.6% that day, compared with KRW 5,976 a year earlier; its market value was about KRW 42.6 billion. [14] After the FCC advanced the proposal in April, the stock fell from KRW 5,000 on April 29 to KRW 4,850 on May 4. [14] The stock trades very thinly: only 2,938 shares changed hands on October 28. [14]

HCT may benefit, but that depends on whether its ICT testing revenue growth accelerates in 2027.

What to watch and what would break the thesis

Manufacturers qualify new labs during 2027 for 2028 products, so Taiwanese and Korean lab revenue could change from the second half of 2027, peaking before the December 2028 cutoff.

Four things to track:

• Sporton's monthly revenue (around the 10th): whether testing growth accelerates through 2027.
• HCT's Q4 2026 (due Feb-Mar 2027) and H1 2027 results: growth in ICT and US-client testing.
• 2027 FCC authorization data by lab country: China's share falling, Taiwan's or Korea's rising.
• UL Solutions' Q4 2026 and 2027 calls: any figures on China-lab relocation spending and connectivity-testing demand.

The thesis would break if:

• The FCC delays or waives the December 1, 2028 date, or a US-China deal lets Chinese labs keep their recognition.
• Global testing firms move China capacity mainly to Taiwan, Vietnam or the US, and Korean labs' FCC volume stays flat through 2027.
• Device makers build in-house FCC-recognized labs in Vietnam or India.
• HCT's ICT testing revenue shows no growth in Q4 2026 and H1 2027.

This article only points out transmission chains that may be overlooked. It is not a stock recommendation.

Sources

[1] Analytics Insight · 2026-10-29 · FCC expands China tech crackdown with electronics testing ban · https://www.analyticsinsight.net/news/fcc-expands-china-tech-crackdown-with-electronics-testing-ban [2] PCMag · 2026-10-11 · FCC could soon ban Chinese labs from testing US electronics · https://www.pcmag.com/news/fcc-could-soon-ban-chinese-labs-from-testing-us-electronics [3] Reuters via MarketScreener · 2026-04-30 · US telecom agency votes to expand tech crackdown on China · https://www.marketscreener.com/news/us-telecom-agency-votes-to-expand-tech-crackdown-on-china-ce7f58d8d88afe21 [4] needinfo.co.kr · 2026-03-29 · HCT 2025 annual report analysis (segment table, TCB status) · https://needinfo.co.kr/hct-co-2025-annual-report-analysis-2026-target-price/ [5] TechTimes · 2026-10-28 · FCC Test Lab Ban Targets 82% China Concentration · https://www.techtimes.com/articles/329585/20261028/fcc-test-lab-ban-targets-82-china-concentration-sets-december-2028-deadline.htm [6] Yahoo Finance · 2026-04-09 · FCC Wants To Go Against $30 Billion Chinese Device Testing Industry · https://finance.yahoo.com/economy/policy/articles/fcc-wants-against-30-billion-162318249.html [7] NIST · US-Korea APEC Tel MRA Phase I · government web page · https://www.nist.gov/node/1199481 [8] Eastmoney Caifuhao · 2026-05-01 · GRG Metrology says the FCC ban has a very limited effect on its fundamentals · https://caifuhao.eastmoney.com/news/20260501162855119541000 [9] stockanalysis.com · Sporton revenue and segment data · company data · https://stockanalysis.com/quote/tpex/6146/revenue/ [10] Yahoo Finance chart API · 2025-10-29 to 2026-10-29 · 6146.TWO daily close and volume · https://query1.finance.yahoo.com/v8/finance/chart/6146.TWO?range=1y&interval=1d [11] Drillr price_volume_history · 2026-10-29 · ULS daily prices · market data [12] UL Solutions 10-K FY2025 · 2026-02-19 · Consumer segment description and China revenue · annual report [13] Edaily · 2017-07-26 · HCT US subsidiary receives A2LA lab accreditation · https://edaily.co.kr/News/Read?mediaCodeNo=257&newsId=02322246615998456 [14] Naver Finance · 2026-10-29 · 072990 daily prices, market value and annual financials · https://m.stock.naver.com/api/stock/072990/integration