TOKYO, July 19 (Reuters) - Japan's Nikkei share average

fell in choppy trade on Friday, tracking overnight Wall Street

declines, although a rebound in semiconductor stocks limited

losses.

The Nikkei slipped 0.43% to 39,952.62 by the midday

break, falling below the 40,000 mark for the first time since

July 2.

The broader Topix was down 0.63% at 2,850.47.

U.S. stocks tumbled on Thursday, as investors continued to

rotate away from high-priced megacap growth stocks and

second-quarter earnings season gathered steam.

Of the Nikkei's 225 constituents, 190 declined while only 34

advanced. One share was untraded.

The benchmark index was on track for its worst weekly

performance since mid-April, following a more than 2% decline on

Thursday as chip-related stocks joined a global sell-off in the

sector and a stronger yen weighed.

"Stocks have fallen a bit too far recently.... If I were

asked whether stocks will fall further, I think prices have

already dropped enough," said Hiroshi Namioka, chief strategist

at T&D Asset Management.

Investors appeared to rethink the sell-off of chip shares

that was at least partly in response to a report that the U.S.

was mulling tighter curbs on exports of advanced semiconductor

technology to China.

The market may be reacting to better-than-expected earnings

results from TSMC, the world's largest contract chipmaker, said

T&D Asset Management's Namioka.

Chip-related shares were among the top gainers in the

morning session.

Renesas Electronics ( RNECF ) was up 2.9%. Nikkei

heavyweights Tokyo Electron ( TOELF ) and Advantest ( ADTTF )

climbed 2.3% and 2%, respectively, and were the biggest boost to

the index.

Among the Tokyo Stock Exchange's 33 industry groups,

precision machinery was the best performer, gaining

0.9% after sliding to the bottom of the pack on Thursday.

In individual stocks, Disco, a maker of chip

manufacturing devices, fell 4.7% to become the worst performer

by percentage, after its financial results disappointed.