Warren Buffett’s Berkshire Hathaway has recently purchased shares of Taiwan Semiconductor Manufacturing Company (TSMC). This is the first time, the shares of the chipmaker has been bought by Warren Buffett. According to the most recent US Sec Filing Form 13F, Berkshire Hathaway has invested $4.1 billion in roughly 60.1 million Taiwan Semiconductor Manufacturing Company shares.
With a $296 billion portfolio under management by Berkshire Hathaway, investment in Taiwan Semiconductor will account for just 1.4% of that total, while Apple continues to represent nearly 42% of Berkshire Hathaway’s portfolio.
Reportedly, Apple’s Chief Executive Officer Tim Cook made the disclosure that the company is preparing to begin sourcing chips for its devices from a plant under construction in Arizona, which is run by Taiwan Semiconductor Manufacturing Co., Apple’s exclusive chip-manufacturing partner.
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Taiwan Semiconductor Manufacturing Company has been largely in the news since the outbreak of the pandemic which led to concerns impacting chip supply across the world. Taiwan Semiconductor Manufacturing is a leading manufacturer of chips in the world with a market share above 53%. According to a 2021 Boston Consulting Group report, Taiwan is home to more than 90% of the manufacturing capacity for the most sophisticated semiconductors in the world.
Taiwan Semiconductor Manufacturing Co. Ltd. ADRs are listed on NYSE and are quoted at around $80. For the world’s biggest contract semiconductor maker in the world, the weak global chip demand led the ADR of TSMC to fall by almost 30% over the last 1-year and YTD in 2022.
The reports also showed that Berkshire now owns a $13 million holding in Jefferies Financial Group and a $297 million stake in the American building materials manufacturer Louisana-Pacific. Berkshire Hathaway in Q3 increased its investments in the media business Paramount Global as well as the big oil companies Chevron and Occidental. During the third quarter, the corporation reduced its stakes in the game company Activision Blizzard, the banks US Bancorp and BNY Mellon, and the automaker General Motors.
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Even though TCMC provided a slightly more conservative estimate for future demand, TSMC’s profit increased by 80% last quarter. Among other IT behemoths, the company supplies chips to Apple (AAPL), Nvidia (NVDA), and Qualcomm (QCOM).