TOKYO (Reuters) - Toshiba Corp (>> Toshiba Corp) has moved some of the assets of its memory chip unit back to the parent company to ward off Western Digital Corp's (>> Western Digital Corp) legal claim that the Japanese conglomerate cannot sell the unit without the U.S. partner's consent.

The move was meant to address Western Digital's demand that Toshiba reverse a move to put their joint venture interests into a unit that was set up in preparation for the sale.

Toshiba, the world's second-largest NAND chip maker, is depending on the sale to cover billions of dollars in cost overruns at its now bankrupt U.S. nuclear unit Westinghouse.

Western Digital, which jointly owns a semiconductor plant with Toshiba in Japan, sought international arbitration in mid May to stop Toshiba from selling its chips arm.

In a letter dated May 31, Toshiba lawyers told Western Digital that the transfer back of the joint venture interests to the parent "puts this matter to rest," a move that would allow Toshiba to press ahead with the sale process.

The letter, seen by Reuters, also notes that the joint venture interests at issue relate just to financing vehicles for some of the manufacturing equipment and have a total value of less than 5 percent of Toshiba's memory chip business, which it has valued at at least 2 trillion yen ($18 billion).

A spokesman for Western Digital said the company could not immediately comment.

Suitors for the chip business include U.S. chipmaker Broadcom Ltd (>> Broadcom Ltd) which has teamed up with private equity firm Silver Lake, and Bain Capital which has partnered with South Korean chipmaker SK Hynix (>> SK Hynix Inc), sources have said.

Taiwan's Foxconn, formally known as Hon Hai Precision Industry Co Ltd 2 (>> Hon Hai Precision Industry Co., Ltd.), also formed a consortium with its Japanese unit Sharp Corp 6753 (>> Sharp Corporation) to bid in the second round, they said.

Separate sources told Reuters this week that Western Digital may join a consortium of Japanese government money and KKR & Co (>> KKR & Co. L.P.)

By Makiko Yamazaki and Kentaro Hamada