Broadcom is seen as the preferred buyer for Toshiba's flash business, sources told CNBC on Friday.
But the Japanese government is trying to put together a group that will keep the business under a Japanese owner, and is influencing the chip sale process, sources said. There's an expectation of a deal by the end of the month, sources said.
Toshiba had been expected to name a winner for the chip business next week. Sources previously told Reuters the choice has narrowed to one bid from Broadcom and U.S. tech fund Silver Lake and another from Toshiba chip partner Western Digital and Japanese government-related investors.
The Japanese company has been in flux, after delaying its financial reports and struggling to sell its nuclear unit. Broadcom shares were little-changed on the report of a potential deal with Toshiba.
Toshiba was not immediately available to comment on the report. Broadcom declined to comment.
— Reporting by CNBC's David Faber, written by Anita Balakrishnan. The Associated Press and Reuters contributed.