Toshiba picks government-backed bidder

HONG KONG— As Toshiba, the embattled technology giant, battles for survival, it has turned to a group led by the Japanese government to buy its prized microchip business, although its plans still face a legal challenge by a U.S. business partner.

After weeks of jockeying among suitors, Toshiba said that it hoped to reach a formal sale agreement over its semiconductor business by next Wednesday. Analysts have estimated the value of the memory chip unit at about $20 billion (U.S.).

Such a deal would significantly bolster the fortunes of a titan of the Japanese economy. Steep losses in its U.S. nuclear power division, Westinghouse Electric, have cast “substantial uncertainty” over the com- pany’s ability to function as a going concern, it says.

The dearth of Japanese bidders in the early rounds of the memory chip auction spurred the Japanese government to cobble together a group.

By picking the Japanese consortium, Toshiba is hoping to conclude a sale quickly. The company is hoping to reach a deal ahead of its annual shareholder meeting.