* Move aimed at avoiding prolonged antitrust review -sources
* Western Digital wants stronger position in JV instead -sources (Adds Toshiba board to meet, Western Digital declining to comment)
TOKYO, Sept 5 (Reuters) - Western Digital Corp has offered to drop out of a bid for Toshiba Corp's lucrative semiconductor unit after their talks stalled, seeking instead a stronger position in the two companies' chip joint venture, two sources said on Tuesday.
The move may help Toshiba finally seal a deal to sell its prized unit after months of delays, providing it with funds to cover billions of dollars in liabilities linked to its failed U.S. nuclear business Westinghouse.
A consortium including Western Digital, U.S. private equity firm KKR & Co, the state-backed Innovation Network of Japan and Development Bank of Japan were previously offering around 1.9 trillion yen ($17.4 billion) for Toshiba's chip business, according to people familiar with the talks.
Those talks had stalled in recent weeks, however, as the two sides struggled to come to an agreement over Western Digital's stake in the business, which the Japanese company wanted to limit in an attempt to avoid prolonged antitrust reviews, sources have said.
To help close the deal, California-based Western Digital has told Toshiba it is prepared to pull out of a consortium bidding for the business in order to address such concerns, said the sources, one with direct knowledge of the transaction and one who was briefed on this development.
In return, Western Digital is seeking to strengthen its position in the joint venture operations, they said.
Toshiba's board is due to meet on Wednesday to discuss the deal, the sources said.
A Western Digital spokeswoman said she could not immediately comment. Toshiba said it could not comment on details of the talks.
Toshiba and Western Digital, which jointly invest in Toshiba's key plant in central Japan, failed to seal a deal by a previously-planned deadline last week due to disagreement over the U.S. firm's future stake in the business, sources have said. ($1 = 109.2900 yen) (Reporting by Kentaro Hamada and Makiko Yamazaki; Editing by William Mallard/Keith Weir)