Toshiba said Friday it will spin off its chip business in a move expected to raise funds for offsetting massive write-downs in its nuclear operations.

The company is looking to sell less than 20 percent of its memory chip business.

Toshiba Chief Executive Officer Satoshi Tsunakawa said he will do all he can to ensure the company doesn't fall into negative net worth as a result of a writedown on its U.S. nuclear unit.

The company will review its overseas nuclear business, Tsunakawa said, but added it has no plans to sell its infrastructure business.

Toshiba's board on Friday approved plans to make its core memory chip business (including the SSD business, but excluding its image sensor business) a separate company and seek outside investment in it.

DRAMeXchange, a division of TrendForce, believes that from this point on, Toshiba's memory business will have more operational flexibility and stronger fundraising ability. These advantages in the long run will benefit the Toshiba-Western Digital alliance in the forms of expansion in NAND Flash production capacity and increased efficiency in storage product development.

Currently, Toshiba and Western Digital together represent 35% of the global NAND Flash output, according to DRAMeXchange. The leading supplier Samsung has a slightly larger share of 36%, while the Micron-Intel camp and SK Hynix account for 17% and 12%, respectively.

Samsung, SK Hynix and Micron are also the three top DRAM suppliers, so their roadmaps for memory products as a whole are much more developed. By contrast, Toshiba and its ally Western Digital are limited to just the NAND Flash industry. For Toshiba and Western Digital, the capital-intensive nature of the memory industry and the volatility of the end market will make their operational challenges more difficult compared with similar issues encountered by their rivals.

From the financial angle, Toshiba's latest fiscal quarterly report shows that memory sales roughly made up around 15% of the company's total quarterly revenue. However, up to 50% of the company's operating margin for the period also came from the same source. This means that memory has become the main profit driver for Toshiba.