By Connor Hart


Shares of Netgear climbed after the Federal Communications Commission issued an order banning consumer-grade routers produced in foreign countries, saying they present a threat to national security, as well as the safety of U.S. consumers.

The stock rose 12%, to $24.62, in premarket trading Tuesday. Through Monday's close, shares are down nearly 11% over the past year.

The FCC late Monday added foreign-made routers--the boxes in homes that connect computers, phones and smart devices to the internet--to its covered list, which identifies communications equipment and services deemed to pose an unacceptable risk to national security.

Netgear stands to benefit from this regulatory shift, as it doesn't manufacture in China, Stifel analysts said. While the company's current manufacturing locations are foreign, the analysts add that its status as a U.S.-based firm with a transparent, non-adversarial supply chain makes conditional approval likely.

The FCC added foreign-made routers to its covered list after an interagency body established in the executive branch determined that foreign-produced routers could introduce "a supply chain vulnerability that could disrupt the U.S. economy, critical infrastructure and national defense," according to the FCC.

Foreign-produced routers additionally pose "a severe cybersecurity risk that could be leveraged to immediately and severely disrupt U.S. critical infrastructure and directly harm U.S. persons," the interagency body said.

Malicious actors have previously exploited security gaps in foreign-made routers, the FCC said, allowing them to attack American households, disrupt networks, enable espionage and facilitate intellectual property theft.

The newly imposed restrictions apply to new device models, meaning the action won't impact consumers' continued use of previously acquired routers. The action additionally won't prevent retailers from continuing to sell, import or market router models previously approved through the FCC's equipment authorization process, the agency said.


Write to Connor Hart at connor.hart@wsj.com


(END) Dow Jones Newswires

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