November 26, 2022

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Buffett's Berkshire unveils $4.1 billion stake in TSMC

Buffett’s Berkshire unveils $4.1 billion stake in TSMC

NOV 14 (Reuters) – Berkshire Hathaway Inc (BRKa.N) It said it had bought more than $4.1 billion of shares in Taiwan’s semiconductor industry (2330.TW)a rare important foray into the tech sector by billionaire conglomerate Warren Buffett.

The news pushed shares in TSMC higher, closing 7.9% higher in Taiwan on Tuesday, as boosting investor sentiment toward the world’s largest chip maker, which saw its shares plunge to a two-year low last month due to a sharp slowdown in global chip demand. . .

In a regulatory filing on Monday describing its investments in US-listed stocks as of September 30, Berkshire said it held about 60.1 million US depository shares of TSMC.

Other foreign investors in TSMC include US asset managers BlackRock Inc (BLK.N) and Vanguard Group Inc, and Singapore’s GIC (GIC.UL) sovereign wealth fund.

Berkshire also revealed a new $297 million stake in Louisiana Pacific Corp.’s building materials company (LPX.N) and $13 million in Jefferies Financial Group Inc (JEF.N). I exited from an investment in Store Capital Corp (STOR.N)a real estate company that agreed in September to be private.

The filing did not specify whether Buffett or his portfolio managers Todd Combs and Ted Wechsler made specific purchases and sales. Investors often try to win back what Berkshire is buying. The biggest investments are usually Buffett’s investments.

While Berkshire doesn’t usually place big tech bets, they often prefer companies that they see as having a competitive advantage, often by their size.

TSMC, which makes chips for the likes of Apple Inc (AAPL.O)Qulacomm (QCOM.O) And Nvidia Inc (NVDA.O)which posted an 80% jump in quarterly profit last month, but handled a more cautious-than-usual note about upcoming demand.

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

“There are only a handful of companies that can mobilize capital to deliver semiconductors, which are becoming increasingly central to people’s lives,” he added.

Berkshire has had mixed success in technology.

Her bet for more than six years during the past decade at IBM Corp (IBM.N) It didn’t work, but Berkshire is sitting on huge unrealized gains from its $126.5 billion stake in Apple, which Buffett views as a consumer products company.

Apple is by far the largest investment in Berkshire’s stock portfolio at $306.2 billion.

Berkshire revealed TSMC’s stake about two and a half months later after it began reducing a multi-billion dollar stake in BYD. (002594.SZ)the largest electric car company in China.

In the third quarter, Berkshire added to its stake in Chevron Corp. (CVX.N)Occidental Petroleum Corp (OXY.N)Celanese Corporation (CE.N)Paramount Global (PARA.O) and RH (RH.N).

It also sold shares of Activision Blizzard Inc (ATVI.O)Bank of New York Mellon Corp (BK.N)GM (GM.N)Kroger Corporation (KR.N) and US Bancorp (USB.N).

Buffett, 92, has run Berkshire since 1965. The Omaha, Nebraska company also owns dozens of companies such as BNSF Railroad, Geico Auto Insurance, several energy and industry companies, and Fruit of the Loom and Dairy Queen.

(Jonathan Stemple reports) in New York. Editing by Bradley Perrett and Stephen Coates

Our criteria: Thomson Reuters Trust Principles.

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