The report added that the structure of a potential deal is fluid and both companies are considering merging into one publicly traded company.

Kioxia, which was spun off from Toshiba Corp, and Western Digital operate a joint flash memory chip plant in central Japan's Yokkaichi.

When asked about the report, Kioxia said that it does not comment on market rumours or speculation, while Western Digital did not immediately respond to a Reuters request for comment.

U.S.-based memory chip firm Western Digital said in June that it was reviewing strategic alternatives, including options for splitting off its flash-memory and hard disk drive businesses.

Talks between the two companies had stalled over a series of issues, including valuation discrepancies, uncertainty over securing approval from the Japanese government, Reuters had reported in October 2021, citing sources.

(Reporting by Akash Sriram in Bengaluru; Additional reporting by Rishabh Jaiswal; Editing by Rashmi Aich)