Germany may limit exporting of chemicals used for semiconductors to China
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Germany is reportedly in talks to put a lid on the amount of chemicals it exports to China used to make semiconductors as the country deals with its balancing economic interests and national security concerns.
The talks, coming from Chancellor Olaf Scholzâs administration, would see Germany severely limit chemicals and thus impact China's ability to manufacture advanced semiconductors, Bloomberg reported, citing people familiar with the matter. 
Such a move could potentially impact companies like BASF (OTCQX:BASFY) and Merck KGaA (OTCPK:MKKGY), both of which supply chemicals used to manufacture processors. Chemicals involved in making chips include trichloroethylene, acetone, isopropanol and other alcohols.
Scholz and Robert Habeck, Germany's Economy Minister and vice chancellor, are working with other European countries and the U.S. on the matter, the news outlet added. However, it is believed the Biden Administration is not pressuring Germany to join the coalition, but it has expressed a desire to work together on the situation.
If such a move were made to limit the export of chemicals used for chip making, it would arise from Germany's national dual-use list, which is used to prevent items being used for military purposes and in chemical, biological and nuclear weapons, the news outlet added.
If Germany - which is also working on keeping ties with China close - were to make such a move, it would join the Netherlands and Japan, both of which have cracked down on exporting key technologies and goods for semiconductor manufacturing in China. The two countries recently joined the U.S. on the matter.
In October, the Commerce Department published new rules that said companies seeking verification to sell to China would be faced with a "presumption of denial" standard if they produce DRAM chips below 18 nm, above 128 layers for NAND chips and below 14 nm for logic chips and would have to apply for a license.
Peter Wennink, the CEO of Dutch semiconductor equipment company, ASML (ASML), said earlier this week he thought China would develop its own semiconductor equipment but that it was "essential" the company has access to the country.
Germany does not have its own semiconductor equipment companies, but the country is in talks with Intel (NASDAQ:INTC) to provide additional subsidies for the semiconductor giant's manufacturing plant in Magdeburg.
Earlier this month, Europe finalized its own Chips Act in an effort to boost manufacturing capabilities on the continent to reduce its reliance on the U.S. and Asia, as Asia accounts for the vast majority of chip production, thanks to foundries such as Taiwan Semiconductor (TSM) and Samsung (OTCPK:SSNLF), which produces chips for companies like Apple (AAPL), Nvidia (NVDA), Qualcomm (QCOM) and others.
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