Toshiba Corp is in talks with Singapore’s Chartered Semiconductor (CSMF.SI) and Globalfoundries Inc about outsourcing production of some of its next-generation system chips to help cut costs, two company sources said.

Toshiba, which sources have said plans to bid for French nuclear group Areva’s (CEPFi.PA) power transmission and distribution unit, is looking to shave costs at its loss-making chip division as it seeks stable revenues from the power business.

The world’s No.2 maker of NAND flash memory chips plans to make 28-nanometre chips at its plant in Oita, southern Japan, but is considering contracting out production of chips exceeding its capacity, said company spokeswoman Hiroko Mochida.

The sources said Toshiba is in talks with Chartered and Globalfoundries — two other members in an IBM-led (IBM.N) consortium to develop next-generation system chips, used in a wide range of electronics from game consoles to digital cameras.

Globalfoundries was spun off from Advanced Micro Devices (AMD.N).

IBM’s 28-nanometre process technology alliance also includes Infineon Technologies (IFXGn.DE), NEC Electronics, Samsung Electronics (005930.KS) and STMicroelectronics (STM.PA).

Toshiba bought Sony Corp’s (6758.T) system chip line for about 90 billion yen ($968 million) last year.

Shares of Toshiba were up 3.9 percent at 484 yen against a 1 percent rise in the benchmark Nikkei average .N225, in what some market analysts said was likely short-covering after the stock fell on Friday on news of its bid for the Areva unit.