* Formal anti-trust review process in China can take 180 days
* Toshiba now under less pressure to close deal by end-March
* Long review may give activist investors time to mount opposition (Recasts and adds details about China antitrust reviews)
TOKYO/SAN FRANCISCO, Dec 15 (Reuters) - Chinese regulators have begun an antitrust review of Toshiba Corp's $18 billion deal to sell its memory chip unit, two months after the Bain Capital-led buying consortium applied for approval, the Nikkei business daily said on Friday.
The embattled Japanese conglomerate has said it would like to see the deal close before the end of March, although that target date has been seen as overly optimistic after a long and contentious auction process delayed Toshiba's decision on the buyer.
The Nikkei report said Chinese regulators started the review this month. China's Ministry of Commerce, which carries out antitrust reviews of global mergers, did not immediately comment when contacted by Reuters on Friday.
Toshiba declined to comment. Bain did not immediately respond to requests for comment.
China's anti-trust watchdogs have become increasingly active in terms of scrutinising global deals, especially in sensitive, strategic sectors like semiconductors where the review process can take up to 180 days - once it officially starts. In some cases, it may take even longer.
China-based antitrust lawyers say that Chinese antitrust reviews into chip deals are especially problematic because China has made the sector a strategic priority and is looking to create its own domestic champions.
Much of the pressure to complete the chip deal by the end of the financial year in March has now been removed after Toshiba raised $5.4 billion in a new share issue this month, which with tax write-offs, will help it plug billions of dollars in liabilities arising from its now bankrupt U.S. nuclear unit Westinghouse and allow it to avoid a delisting.
Toshiba also settled a long-standing dispute with chip business partner Western Digital this week, with the U.S. firm agreeing not to try to block the sale in exchange for the right to invest in a new production line and a new plant.
The chip unit sale, however, may face more complications if regulatory reviews are prolonged.
Argyle Street Management Ltd, a Hong Kong-based hedge fund with $1.2 billion under management, sent a letter to Toshiba's board this week urging the company to scrap the deal, which the fund claims significantly undervalues the chip unit.
Argyle is inviting the 30-plus overseas investors who participated in Toshiba's new share issue to team up in opposition to the deal, although it remains to be seen just how much traction it will gain.
Reporting by Stephen Nellis in SAN FRANSISCO and Ritsuko Ando in TOKYO; Editing by Adam Jourdan and Edwina Gibbs