Pedestrians walk past a logo of Toshiba Corp outside an electronics retailer in Tokyo, Japan. Reuters

Toshiba Corp is considering spinning off its semiconductor business and selling a partial stake in the unit to Western Digital Corp, the Nikkei financial daily reported on Wednesday.

Shares of Western Digital, the California-based data storage company, were up 0.7% at US$71.51 on Tuesday.

Toshiba will sell a roughly 20% interest in the unit for about 200 billion to 300 billion yen (US$1.77 billion to US$2.66 billion) while retaining a majority stake, the newspaper reported.

Besides Western Digital, US investment funds are also showing interest in Toshiba’s semiconductor business, the Nikkei reported, sources familiar with the matter.

Toshiba and Western Digital did not immediately respond to requests for comment.