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Taiwan Semiconductor - >>> Warren Buffett’s Berkshire Hathaway sells entire stake in TSMC


CNN

By Michelle Toh

5-16-23


https://www.cnn.com/2023/05/16/investing/berkshire-hathaway-taiwan-tsmc-stock-exit-hnk-intl/index.html


Warren Buffett’s conglomerate has sold its remaining shares in the world’s largest chipmaker, TSMC, after the “Oracle of Omaha” sounded alarms about its home base of Taiwan.

In a Monday filing, Berkshire Hathaway (BRKA) disclosed that it was no longer holding a stake in Taiwan Semiconductor Manufacturing Company (TSM) as of the end of the first quarter.

In recent weeks, Buffett had repeatedly expressed concerns over the future of Taiwan, the self-governed democratic island where TSMC is based. China’s Communist leadership has long claimed Taiwan as part of its territory, despite having never ruled over it.

The move completes an exit from TSMC by one of the world’s most watched investors, which had already been winding down its stake in recent months.

In February, Berkshire revealed it had sold 86% of its shares in TSMC, which were purchased for $4.1 billion just months before. The quick sale was considered unusual because Buffett is known for making longer term bets.

Warren Buffett gives reason for surprise sale of stake in Taiwan's TSMC
Asked to explain his decision on an analyst call this month, the billionaire said: “I don’t like its location, and I’ve reevaluated that.”

“I feel better about the capital that we’ve got deployed in Japan than in Taiwan,” the Berkshire Hathaway chairman added. “I wish it weren’t sold, but I think that’s a reality.”

Despite the share sale, Buffett lauded TSMC as “one of the best-managed companies and [most] important companies in the world.”

“There’s no one in the chip industry that’s in their league, at least in my view,” he said.

“Marvelous people and marvelous competitive position and everything, [but] I’d rather find it in the United States.”

Buffett said his reassessment of the company was in “light of certain things that were going on.” He had previously pointed to geopolitical tensions as a concern.

TSMC declined to comment Tuesday on Berkshire Hathaway’s divestment.

‘Silicon shield’

TSMC is considered a national treasure in Taiwan, supplying semiconductors to global tech giants including Apple (AAPL) and Qualcomm (QCOM).

It mass produces the most advanced semiconductors in the world, components that are vital to the smooth running of everything from smartphones to washing machines.

The firm is the world’s largest chip manufacturer, according to Gartner. It’s also one of the world’s most valuable listed companies, with a market capitalization of 12.8 trillion New Taiwan Dollars (approximately $415.3 billion) as of Tuesday.

As the world courts TSMC, Taiwan worries about losing its 'silicon shield'

TSMC’s presence is seen as providing a strong incentive to the West to defend Taiwan against any attempt by China to take it by force.

The company is perceived as being so valuable to the global economy, as well as to China, that it is sometimes even referred to as forming part of a “silicon shield” against a potential military invasion by Beijing.

While TSMC is expanding overseas in countries including the United States, it’s also growing its footprint back home in Taiwan, where it plans to add more than 6,000 jobs this year.

As Berkshire Hathaway revealed its withdrawal Monday, other prominent investors made bets on the stock. According to a regulatory filing, Macquarie has increased its stake in TSMC, while Tiger Global has also bought in.

TSMC stock rose 2% Tuesday in Taipei, while its US-listed shares slipped 0.5% in after-hours trading in New York.

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