TOKYO, Oct 22 (Reuters) - Japan’s Nikkei share average declined on Thursday as chip-sector shares gave back the previous session’s gains, with investors cautious about the outlook for AI-related spending next year.

Despite posting overall solid results after Wednesday’s Wall Street close, US chip equipment maker Lam Research shares slipped in extended trading, with Iwai Cosmo Securities analyst Kazuyoshi Saito pointing to worries about demand from China.

“In China, there was a rush to procure manufacturing equipment ahead of schedule amid concerns over tighter regulations, and the market seems not to have fully priced in the subsequent payback,” he said.

The tech-heavy Nikkei (.N225) lost 0.8% to 64,128.54 by 0137 GMT, after rallying 0.9% on Wednesday.

The broader Topix (.TOPX) , by contrast, was flat on Thursday, following the previous day’s 0.9% advance.

Services (.ISVCS.T) was the best performer among the Tokyo Stock Exchange’s 33 industry groups, gaining 2.2%.

Japanese stocks had already had a chance to react to Tuesday’s strong after-market earnings reports from US companies SpaceX (SPCX.O) and Super Micro Computer (SMCI.O) , making them vulnerable to profit taking in the latest session, said Wataru Akiyama, an equities strategist at Nomura Securities.

“The market is looking out to 2027 and if AI capex will continue, and there’s quite a lot of caution among investors,” he said.

Chip-sector shares led the Nikkei lower, with Tokyo Electron (8035.T) down 4.1%, shaving 212 points from the index because of its heavy weighting. Screen Holdings (7735.T) dropped 6% and Lasertec (6920.T) dipped 2.7%.

Data-centre cable maker Fujikura (5803.T) lost 3%. AI-focused startup investor SoftBank Group (9984.T) skidded 3.1%.

Many other tech names advanced though. Cybersecurity firm Trend Micro (4704.T) jumped 6.6% following the announcement of critical vulnerabilities in the PHP programming language, which spurred several governments in Europe to take their websites offline to protect their systems.

IT services provider SHIFT (3697.T) rose 9% to be the Nikkei’s biggest percentage gainer, while IT consultancy BayCurrent (6532.T) up 5.9%. Sony (6758.T) rose 2.6%.