* Chip-related shares, Apple suppliers tumble
* Toshiba soars after source says Western Digital to raise offer
* Financial stocks rise, underpins TOPIX
TOKYO, June 12 (Reuters) - Japan's Nikkei share average fell on Monday morning, dragged down by declines in technology shares after their U.S. counterparts were sold off sharply on Friday.
The Nikkei dropped 0.8 percent to 19,848.60 in midmorning trade.
Semiconductor manufacturing equipment makers and Apple suppliers led the declines, with Tokyo Electron tumbling 3.5 percent, Advantest Corp dropping 3.4 percent, TDK Corp shedding 3.0 percent and Taiyo Yuden declining 3.1 percent.
On Friday, Apple Inc shares fell 3.9 percent in their biggest daily percentage decline since April 2016 after a report that iPhones to be launched later this year will use modem chips with slower download speeds than some rival smartphones.
"Since Japanese tech shares had chased strong performances on the Nasdaq, they will likely see a correction for now," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
Meanwhile, a key focus for markets this week is the U.S. Federal Reserve's two-day policy meeting that ends on Wednesday in which it is expected to raise interest rates.
Investors will focus on any fresh hints on the pace of further tightening in the near term and also next year, and any details on its plans to trim its balance sheet.
Elsewhere, financial stocks gained, helping the broader Topix outperform. It rose 0.1 percent to 1,593.60.
Mitsubishi UFJ Financial Group gained 1.0 percent, Mizuho Financial Group added 1.4 percent and insurer T&D Holdings soared 4.6 percent.
Meanwhile, Toshiba Corp surged 7.5 percent after a person familiar with the matter told Reuters that Western Digital Corp plans to raise its offer for Toshiba's prized semiconductor unit to $18 billion or more.
The JPX-Nikkei Index 400 gained 0.1 percent to 14,189.50. (Editing by Jacqueline Wong)