Toshiba on Tuesday said it was not considering withdrawing from personal-computer production and selling its Hangzhou factory in China. The comment by Toshiba followed a report by the Sankei newspaper that said the Japanese conglomerate is planning to pull out of PCs as it restructures its business following a massive accounting scandal.

The Sankei said Toshiba, Fujitsu and VAIO are in talks to merge their PC businesses. Toshiba would consign production of its Dynabook brand to Fujitsu and VAIO factories while it focuses on design and development, helping it cut costs, the paper said.

Bloomberg News also reported that VAIO ws nearing a deal to combine itself with Toshiba and Fujitsu's PC businesses.