Toshiba has approached Nanya Technology to discuss about a potential partnership, and proposed a US$1 billion offer to invest in the Taiwan-based company, according to industry sources.

Alternatively, Toshiba may end up buying US$1 billion worth of production equipment for Nanya and outsouce production to the Taiwan-based DRAM maker, the sources said.

Toshiba is seeking a strategic alliance with Nanya in order to secure a steady supply of DRAM chips, as the Japan-based NAND flash vendor wants to expand its presence in the eMCP memory field that has been dominated by Samsung Electronics and SK Hynix, the sources pointed out.

For Nanya, Toshiba's investment would help the company finance its migration to 20nm production, the sources indicated.

The outcome of the talks for the two companies' possible strategic alliance will likely be determined by the end of first-quarter 2015, the sources noted.