TOKYO — Toshiba Corp failed to seal a deal to sell its prized chip business by an internal deadline of Thursday, raising doubts about whether it can plug a balance sheet hole in time to avoid a delisting and keep the unit competitive.

The embattled Japanese conglomerate said in a statement it has tried but so far not come to an agreement and it was continuing to talk with three suitors — a consortium led by Western Digital (WDC.O) as well as groups led by Bain Capital and by Taiwan's Foxconn.

The sale of the world's No. 2 maker of NAND chips - worth US$17 billion to US$18 billion - has become a contentious battle marked by a slew of revised bids, changing alliances among bidding groups and the threat of legal action from joint venture partner Western Digital.

Toshiba was working under creditor pressure to strike a deal by the end of the month, sources with direct knowledge have said, as any later would make it difficult to gain regulatory approvals before its books closed in March.

Without the money to cover billions in liabilities at it bankrupt nuclear unit Westinghouse, Toshiba would likely have to book negative net worth for a second year running, which could result in it being delisted.

Just as importantly, delays are set to only make rival Samsung Electronics's upper hand in NAND chips stronger allowing it to capitalise on the current boom in demand for semiconductors and extend its lead in advanced 3D chips.

"Toshiba must build a factory in order to satisfy demand for 3D NAND, but right now Toshiba doesn't have the money," said Lee Kyu-jin, senior analyst at Ebest Investment & Securities.

"Meanwhile, Samsung is showing drive in the 3D NAND market, including building a factory dedicated to 3D NAND in order to dominate demand such as servers and data centres."

Despite the frayed relations between Western Digital and Toshiba, sources familiar the matter said early this week that their discussions were in final stages, with Steve Milligan, the chief executive of the U.S. firm, in town to hammer out details.

But the two sides are struggling to come to an agreement over the U.S. company's future stake in the business, they added.

Complicating matters, at the last minute Bain resubmitted a 2 trillion yen (US$18.1 billion) offer, bringing in Apple Inc (AAPL.O) to help bolster its bid, separate sources said late on Wednesday.

The bid trumps the 1.9 trillion yen offered by the Western Digital-led consortium, which also includes U.S. private equity firm KKR & Co LP (KKR.N). Banking sources have previously said, however, that Western Digital was working to get its proposal up to 2 trillion yen.

A senior banking official familiar with the talks said Toshiba was still likely to sign a deal with the Western Digital group, as legal risks posed by the U.S. firm, which argues no deal can be done without its consent, make it difficult to accept any other offer.

Foxconn, the world's largest contract electronics maker formally known as Hon Hai Precision Industry, is seen as an unlikely winner in the race due to its deep ties with China and Japanese government's desire to keep key semiconductor technology owned by Japanese-U.S. capital.

There is also some doubt about Toshiba's resolve to sell the unit at all as some executives at the chip unit would prefer no deal if it is going to be bought by Western Digital and have threatened to quit if the U.S. firm wins out, sources have said.

Separate sources familiar with Toshiba's thinking have also said the Japanese conglomerate may consider tapping financial investors to boost capital so that it could avoid a delisting in the event that it decides not to sell the chip unit.