Toshiba on Wednesday said it is contemplating a spinoff of its memory semiconductor business, though nothing has been finalized as of yet.

The news follows reports that Toshiba is considering selling a partial stake in its semiconductor business to Western Digital in the U.S. to raise funds due to losses in its U.S. nuclear plant unit, the Nikkei Asian Review reported. Reports also state that a new chip company will be created during the first half of the current year.

Toshiba is looking to sell off roughly 20 percent interest for about 200 billion yen to 300 billion yen ($1.77 billion to $2.65 billion) while retaining majority control and keeping the new company in group earnings. Toshiba is still on a Japan watch list after figuring in accounting scandals in 2015, according to Forbes.

Industry analysts say Toshiba has about 20 percent market share in the NAND flash business, following current market leader Samsung who command 35 percent market share. A joint venture with Western Digital will give the company a bigger slice of the market and would solidify its position in the solid-state memory and storage industry.

Likewise, Western Digital's increased control of the world's NAND flash supply would strengthen the company's competitiveness with rivals Seagate, Intel, Micron, and Samsung enhancing its influence and control of the memory and storage market. It is speculated that if Western Digital gets hold of Toshiba's flash memory supply, it would inadvertently put pressure on Seagate to find its own firm supply of high-quality flash memory.

As it stands, Seagate is in talks with SK Hynix to bolster its presence in solid-state-drives (SSD) whose demand is steadily increasing as an alternative to hard-disc drives. This puts pressure for Western Digital to grab a stake in Toshiba.

Western Digital acquired Toshiba's long-term partner, SanDisk, last year. Toshiba and SanDisk's joint venture provided the latter with a steady NAND supply that extends across memory technologies including 3D NAND.

Meanwhile, Toshiba is currently focused on nonvolatile 3D Flash memory. The company entered the flash memory market back in 1984, also making wireless memory cards and USB flash drives.