Berkshire Hathaway, owned by Warren Buffett, buys $4.1 billion worth of shares in TSMC


New Delhi: As part of a rare and major push into the tech industry, the conglomerate owned by billionaire Warren Buffett, Berkshire Hathaway Inc. announced that it has bought more than $4.1 billion in stock in Taiwan Semiconductor Manufacturing.

The news bolstered investor optimism for the world’s largest contract chipmaker, whose shares fell to a two-year low last month on a significant slowdown in global chip demand. Shares of TSMC rose to end up 7.9% in Taiwan on Tuesday.

In a regulatory filing Monday, Berkshire said it owned about 60.1 million American depositary shares of TSMC as of Sept. 30.

US asset managers BlackRock Inc. and Vanguard Group Inc., as well as Singapore’s sovereign wealth fund GIC, are among the other foreign investors in TSMC.

In addition, Berkshire disclosed new investments in Louisiana-Pacific Corp, a building materials maker, and Jefferies Financial Group Inc. for 13 million dollars. He sold his shares to Store Capital Corp., a real estate company that had previously planned to go private in September.

According to the document, Buffett or his portfolio managers, Todd Combs and Ted Weschler, may or may not have made specific purchases and sales. Investors often try to profit from the purchases Berkshire makes. Typically, Buffett’s investments are larger.

While Berkshire often avoids making big bets in technology, it often favors companies it believes have a competitive advantage, often because of their size.

Chipmaker TSMC, which supplies processors to companies including Apple Inc., Qualcomm and Nvidia Corp., reported an 80% jump in quarterly earnings last month, although it was less optimistic than usual about future demand.

“I suspect that Berkshire believes that the world cannot do without products made by Taiwan Semi,” said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pennsylvania, which owns Berkshire stock.

“Only a small number of companies can raise capital to deliver semiconductors, which are increasingly important to people’s lives,” he added.

However, Berkshire has huge unrealized gains on its $126.5 billion stake in Apple, which Buffett views as more of a consumer products company. That contrasts with Berkshire’s more than six-year bet over the past ten years on IBM Corp.

The $306.2 billion stock portfolio owned by Berkshire has Apple as its largest holding.

About two and a half months after it began reducing a multibillion-dollar position in BYD Co, China’s largest electric car maker, Berkshire disclosed its ownership of TSMC.

Berkshire boosted its holdings in Chevron Corp, Occidental Petroleum Corp, Celanese Corp, Paramount Global and RH during the third quarter.

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