SFP_S_DOWN = 0,
        SFP_S_WAIT,
        SFP_S_INIT,
+       SFP_S_INIT_TX_FAULT,
        SFP_S_WAIT_LOS,
        SFP_S_LINK_UP,
        SFP_S_TX_FAULT,
        [SFP_S_DOWN] = "down",
        [SFP_S_WAIT] = "wait",
        [SFP_S_INIT] = "init",
+       [SFP_S_INIT_TX_FAULT] = "init_tx_fault",
        [SFP_S_WAIT_LOS] = "wait_los",
        [SFP_S_LINK_UP] = "link_up",
        [SFP_S_TX_FAULT] = "tx_fault",
                if (event != SFP_E_TIMEOUT)
                        break;
 
-               sfp_sm_probe_for_phy(sfp);
-
                if (sfp->state & SFP_F_TX_FAULT) {
                        /* Wait t_init before indicating that the link is up,
                         * provided the current state indicates no TX_FAULT. If
                break;
 
        case SFP_S_INIT:
-               if (event == SFP_E_TIMEOUT && sfp->state & SFP_F_TX_FAULT)
-                       sfp_sm_fault(sfp, SFP_S_TX_FAULT, true);
-               else if (event == SFP_E_TIMEOUT || event == SFP_E_TX_CLEAR)
-       init_done:      sfp_sm_link_check_los(sfp);
+               if (event == SFP_E_TIMEOUT && sfp->state & SFP_F_TX_FAULT) {
+                       /* TX_FAULT is still asserted after t_init, so assume
+                        * there is a fault.
+                        */
+                       sfp_sm_fault(sfp, SFP_S_INIT_TX_FAULT,
+                                    sfp->sm_retries == 5);
+               } else if (event == SFP_E_TIMEOUT || event == SFP_E_TX_CLEAR) {
+       init_done:      /* TX_FAULT deasserted or we timed out with TX_FAULT
+                        * clear.  Probe for the PHY and check the LOS state.
+                        */
+                       sfp_sm_probe_for_phy(sfp);
+                       sfp_sm_link_check_los(sfp);
+
+                       /* Reset the fault retry count */
+                       sfp->sm_retries = 5;
+               }
+               break;
+
+       case SFP_S_INIT_TX_FAULT:
+               if (event == SFP_E_TIMEOUT) {
+                       sfp_module_tx_fault_reset(sfp);
+                       sfp_sm_next(sfp, SFP_S_INIT, T_INIT_JIFFIES);
+               }
                break;
 
        case SFP_S_WAIT_LOS: