Taiwan legislators on Wednesday rejected applications for subsidies from D-Ram chipmaker Powerchip and Taiwan Innovation Memory Company, the state-founded vehicle for upgrading Taiwan’s memory chip industry.

The decision by the economics committee in effect halts government efforts to reform the fractious and troubled dynamic random access memory sector. Taiwan is the world’s second-biggest manufacturer of D-Ram chips, which are found in every computer, but many Taiwanese D-Ram companies were on the brink of collapse in the past year after industry overcapacity led to a protracted slump.