Taiwanese contract manufacturers of dynamic random access memory, the type of memory chip used in computers, brought in $8bn in revenue last year and accounted for about a third of world production.

This places them at the centre of one of the hardest- hit segments of the global IT industry as a result of the economic downturn. Dram industry revenues worldwide declined by a fifth this year, according to market researcher iSuppli, and the market price for Dram, now at a historic low, stands at just a third of production cost.

The Taiwanese government, wary of letting an industry that employs 10,000 people and has $12.5bn in bank loans go under, is now contemplating a bail-out for the big Dram companies that would be tied to some form of industry restructuring, such as consolidating the four big companies.