(Adds analyst comments in paragraphs 5, 8-9. Updates prices.)

By Rocky Swift

TOKYO, Aug 20 (Reuters) - Japan's Nikkei share average

slid for a second day on Wednesday, coming off of record highs

and dragged lower by chip-related companies.

SoftBank Group plunged 7.6%, while Advantest ( ADTTF )

, a maker of chip-testing equipment, lost 6.1%.

The losses came after the tech-heavy Nasdaq sank in U.S. trading

overnight, with Nvidia ( NVDA ) sliding 3.5%, the biggest drop

in nearly four months.

The U.S. government wants an equity stake in Intel in

exchange for cash grants approved during the previous

administration, Commerce Secretary Howard Lutnick said on

Tuesday. That comes on the heels of SoftBank's $2 billion

investment in the struggling U.S. chipmaker that was announced

on Monday.

"Concerns about government intervention in the semiconductor

sector could weigh on U.S. high-tech stocks and, by extension,

Japanese semiconductor-related shares," said Nomura strategist

Fumika Shimizu.

The Nikkei 225 Index lost 1.7% to 42,791.13. The

broader Topix gauge fell 0.8%.

Lutnick also said that documents memorializing trade

agreements with Japan and South Korea are "weeks away" from

being ready. Under the deal reached last month, the U.S. agreed

to reduce tariffs on Japanese car imports to 15% from the

previous 27.5%, and Japan promised $550 billion in U.S.

investments.

The trade deal appears skewed to benefit Japan's major

exporters over companies that will make up the bulk of those

investments in America, said Weston Nakamura, a markets analyst

who publishes the Across the Spread newsletter.

"SoftBank, and whoever else invests in what the U.S.

government deems as a strategic national interest, is

'subsidizing' the lower tariff rate for autos," he said.

Automaker stocks were broadly higher, with Honda Motor ( HMC )

rising 1.4% and Isuzu Motors ( ISUZF ) adding 1%.

The Nikkei will likely ease off recent record highs toward

year-end, according to strategists in a Reuters poll.

The index on Tuesday surpassed last week's previous intraday

record to touch 43,876.42. It is forecast to slip back to 42,000

at the end of December, according to the median estimate of 18

analysts polled August 8-18.