A consortium led by the Japanese government, which includes South Korea-based SK Hyinx, US-based Bain Capital and Japanese companies, was named as the preferred bidder in a sale of the memory arm of troubled Toshiba, Yonhap News Agency reported.

Toshiba’s board is expected to name a winner by 28 June, when it holds a shareholders’ meeting. However, industry watchers said the sale could be delayed because US-based Western Digital filed a request for international arbitration and demanded exclusive negotiation rights, Yonhap reported.

The consortium, which includes the Development Bank of Japan and the state-backed fund Innovation Network Corp of Japan, has told Toshiba it needs to resolve a legal dispute with Western Digital, its chip-venture partner, before a deal can go ahead, Reuters said.

Struggling Toshiba, the world’s second-largest maker of NAND flash memory chips, plans to sell up to 100 per cent of its memory business as it deals with a more than $1 billion write-down from its nuclear power business in the US.

In early June Terry Gou, chairman of Hon Hai Precision, the largest contract electronics maker in the world, confirmed Apple and Amazon provided financial backing for its bid to buy the Toshiba unit. Hon Hai Precision, better known as Foxconn, reportedly submitted the highest bid among five buyers, offering more than JPY2 trillion ($18.2 billion).

Taiwan-headquartered Foxconn approached SK Hynix in March about making a joint bid for the memory business.

SK Hynix, the second-largest maker of memory chips in the world, submitted a non-binding offer in February to acquire a 20 per cent stake in the Toshiba business for an estimated KRW2 trillion ($1.75 billion) to KRW3 trillion.