Talks within the ruling coalition about such export controls are still at an early stage, and officials are aware that any such decision could damage business ties with China, which has become Berlin’s biggest trading partner.

If the move is implemented, German companies such as Merck and BASF will be unable to sell some of their chemicals to China, the sources said on condition of anonymity.

While Germany lacks cutting-edge semiconductor technology, Merck and BASF are supplying companies around the world with the chemicals they need to make semiconductors, Bloomberg notes. Merck’s products or services can be found in almost every semiconductor in the world, while BASF is the market leader in Europe and Asia, home to the most important global contracting companies in the industry, such as Taiwan Semiconductor Manufacturing Co.