Western Digital (WDC) - Get Report may partner with the Japanese government and private equity firm KKR (KKR) - Get Report to bid for Toshiba's (TOSYY) chip unit, reversing a previous course of action to acquire an immediate majority stake, Reuters reports.

The partnership is expected to be the favored bidder as the presence of state-backed fund, Innovation Network Corp of Japan, and the Development Bank of Japan will be seen as the Japanese government's stamp of approval.

Toshiba has valued its chip unit at least 2 trillion yen ($18 billion). A successful sale is crucial to Toshiba's recovery after massive cost overruns at its nuclear unit Westinghouse (WAB) - Get Report

(Western Digital is a core holding of Jim Cramer's charitable trust Action Alerts PLUS. See all of his holding with a free trialhere.)

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