Toshiba Corp (6502.T) plans to build a memory chip production factory with a total investment of 400 billion yen (about $4 billion) with SanDisk Corp SNDK.O, the Nikkei reported.
Toshiba plans to make chips of 16-17 nanometers circuit line width at the new plant to gain an edge over Samsung Electronics Co (005930.KS) by making more chips from a single silicon wafer, the business paper said.
The chips made at the factory now have a width of 19nm.
The new facility, expected to start production in the next fiscal year, would raise the plant's capacity by about 20 percent from an estimated monthly equivalent of 450,000 300mm wafers, Nikkei reported.
Toshiba and SanDisk, who have a joint venture to make NAND flash memory, will split the bill for a new building on the grounds of their plant in Yokkaichi, Mie Prefecture, the Japanese newspaper said.
This would be Toshiba's first major investment to increase production in nearly two years, Nikkei said.
(Reporting by Sagarika Jaisinghani in Bangalore; Editing by Joyjeet Das)