Toshiba Corp (6502.T) told its creditor banks it is in talks with Western Digital Corp (WDC.O) and Taiwan's Foxconn over the $18 billion sale of its prized chip unit, banking sources familiar with the matter said on Tuesday.
Late last month, Toshiba picked a Japanese government-backed consortium as preferred bidder to buy the conglomerate's semiconductor business, but they have yet to reach an agreement.
The group includes the state-backed fund Innovation Network Corp of Japan, the Development Bank of Japan, U.S. private equity firm Bain Capital and South Korean chipmaker SK Hynix Inc (000660.KS).
Foxconn, the world's largest contract electronics maker, is formally known as Hon Hai Precision Industry (2317.TW).
A representative for Toshiba was not immediately available to comment.