A consortium including the state-backed Innovation Network Corp. of Japan and state-owned Development Bank of Japan is mulling investing in Toshiba Corp.'s memory chip business, sources close to the matter said Friday.

Toshiba Memory Corp., which will be established through the spinoff of its profitable chip business, could be backed by public funds in order to protect the country's key technology and keep the company's memory chip unit out of foreign hands.

Toshiba is the world's second-biggest producer of NAND flash memory chips, after South Korea's Samsung Electronics Co. The chips are used in devices such as smartphones.