Buffett's Berkshire reveals $4.1 billion stake in TSMC

Buffett’s Berkshire reveals $4.1 billion stake in TSMC

Nov 14 (Reuters) – Berkshire Hathaway Inc (BRKa.N) said it bought more than $4.1 billion worth of shares in Taiwan Semiconductor Manufacturing (2330.TW), a rare significant foray into the conglomerate’s tech sector of billionaire Warren Buffett.

The news sent shares of TSMC soaring more than 6% in Taiwan on Tuesday as it bolstered investor sentiment for the world’s largest contract chipmaker, which saw its shares hit a two-year low on Tuesday. last month due to a marked slowdown in global chip demand.

In a Monday regulatory filing outlining its U.S.-listed equity investments as of Sept. 30, Berkshire said it owned about 60.1 million U.S. depository shares of TSMC.

Berkshire also disclosed new stakes of $297 million in building materials company Louisiana-Pacific Corp (LPX.N) and $13 million in Jefferies Financial Group Inc (JEF.N). He sold an investment in Store Capital Corp (STOR.N), a real estate company that agreed in September to be taken private.

The filing does not specify whether Buffett or his portfolio managers Todd Combs and Ted Westchler made specific purchases and sales. Investors often try to piggyback on what Berkshire buys. Larger investments are normally Buffett’s.

Although Berkshire doesn’t normally make big tech bets, it often prefers companies it perceives to have competitive advantages, often due to their size.

TSMC, which makes chips for Apple Inc (AAPL.O), Qulacomm (QCOM.O) and Nvidia Corp (NVDA.O), posted an 80% increase in quarterly profit last month, but adopted a rating more cautious than usual on upcoming request.

“I suspect Berkshire believes the world can’t live without products made by Taiwan Semi,” said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pa., which owns Berkshire stock.

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

Berkshire has had mixed success in technology.

Its more than six-year bet over the past decade in IBM Corp has failed, but Berkshire is sitting on huge unrealized gains on its $126.5 billion stake in Apple , which Buffett considers more of a consumer products company.

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

Berkshire disclosed TSMC’s stake about 2.5 months after it began trimming a decade-old multibillion-dollar stake in BYD Co (002594.SZ), China’s largest electric car company.

In the third quarter, Berkshire increased its holdings in Chevron Corp (CVX.N), Occidental Petroleum Corp (OXY.N), Celanese Corp (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), General Motors Co (GM.N), Kroger Co (KR.N) and US Bancorp (USB .NOT) .

Buffett, 92, has run Berkshire since 1965. The Omaha, Nebraska-based company also owns dozens of businesses such as railroad BNSF, auto insurer Geico, several energy and industrial companies, Fruit of the Loom and Dairy Queen.

Reporting by Jonathan Stempel in New York; Editing by David Gregorio and Bradley Perrett

Our standards: The Thomson Reuters Trust Principles.

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