TOKYO -- U.S. chipmaker Western Digital is finalizing plans to separate its semiconductor business and integrate it with Japan's Kioxia Holdings in a bid to boost competitiveness amid deteriorating memory market conditions, Nikkei has learned.

WD is working with financial institutions to finalize the loan terms and conditions. The company must also settle with South Korean chipmaker SK Hynix, which is an indirect shareholder of Kioxia and is said to oppose the deal. Once these obstacles are cleared, a basic agreement will be reached by as early as the end of October, while there remains a possibility that the deal could break.