* SoftBank hit by double whammy of Huawei and network disruption
* Tokyo Electron, Sumco among heavy losers after Huawei CFO arrest
* Huawei 5 most popular phones in Japan - Kakaku.com
* Mobile phone parts maker plunge
* Defense equipment makers soar after CNN reports on unidentified North Korean missile base
By Ayai Tomisawa
TOKYO, Dec 6 (Reuters) - Japan’s Nikkei skidded to a two-week low on Thursday as chip-related stocks were hit after Canada arrested a top executive of Chinese tech giant Huawei at the request of the United States, threatening a new spike in Sino-U.S. tensions.
Losses intensified later the session as index heavyweight SoftBank Group Corp tumbled, hit by the news about Huawei and a partial disruption to its mobile phone service.
The Nikkei share average was down 2.2 percent at 21,436.92 at 0550 GMT, after falling at one point to 21,307.72, its lowest level since Nov. 21.
Canada’s Department of Justice said on Wednesday Huawei’s global chief financial officer Meng Wanzhou is now facing extradition to the United States. The arrest is related to violations of U.S. sanctions, a person familiar with the matter said.
SoftBank, which is listing its mobile unit on Dec. 19, skidded 5.9 percent at one point.
Last year, SoftBank and Huawei jointly demonstrated various potential use cases for a 5G network, which provides ultra-high throughput, ultra-low latency transmission, and edge computing, to SoftBank’s business partners.
Meng’s arrest could inflame tensions between China and the United States just days after presidents Donald Trump and Xi Jinping agreed to steps to resolve their trade war at a meeting in Argentina.
“This is really disappointing after the market took the temporary halt to further tariffs between the U.S. and China as a relief early this week,” said Takuya Takahashi, a strategist at Daiwa Securities.
Takahashi said the news had a ripple effect on the Japanese chip sector.
Sumco Corp tumbled 7.2 percent, Shin-Etsu Chemical dropped 3.8 percent, Tokyo Electron shed 5.4 percent and Advantest Corp plunged 6.6 percent.
Mobile phone parts makers were battered, with TDK Corp plunging 7.8 percent and Anritsu Corp tanking 8.1 percent.
According to gadget ranking site Kakaku.com, the five most popular phones in Japan are made by Huawei.
Moving in the opposite direction, defense-related stocks soared after CNN reported that new satellite images obtained by it revealed that North Korea has significantly expanded a key long-range missile base located in the mountainous interior of the country.
Ishikawa Seisakusho gained 1.0 percent and Hosoya Pyro-Engineering jumped 5.8 percent.
The broader Topix dropped 1.8 percent to 1,610.32. (Editing by Kim Coghill)