Toshiba is prioritizing talks with Western Digital to sell its memory chip business, as negotiations with a previously preferred bidder have stalled, the Nikkei business daily reported on Wednesday.

The Japanese conglomerate is scrambling to sell its flash memory unit for around $18 billion to cover losses from its bankrupt U.S. nuclear business Westinghouse.

In June, Toshiba picked a consortium including Japanese government-backed funds, private equity firm Bain Capital and South Korean chip maker SK Hynix as the preferred bidder for the prized unit.

But the talks stalled after Western Digital, a partner in Toshiba's main chip plant, took Toshiba to court, arguing it needs to consent to a sale. A subsequent legal battle between the two companies unnerved the state-backed funds, which demanded that Toshiba resolve the conflict before the sale.

The Nikkei, without citing sources, said Toshiba CEO Satoshi Tsunakawa told lenders that it would focus on negotiating with Western Digital with the aim of agreeing to a deal by the end of the month.

A Toshiba spokesman declined to comment.