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Warren Buffett's Berkshire Hathaway Discloses Owning Stake In Chip Maker TSMC Worth $4.1 Billion

Warren Buffett's Berkshire Hathaway Discloses Owning Stake In Chip Maker TSMC Worth $4.1 Billion
Berkshire Hathaway Inc announced the purchase of more than $4.1 billion in stock in Taiwan Semiconductor Manufacturing, marking the conglomerate's first significant foray into the technology sector.
The news enhanced investor sentiment for the world's largest contract chipmaker, which witnessed its shares touching the lowest value in the past two years last month because of a major slowdown in chip demand globally. 
Berkshire stated in a Monday regulatory filing that it owned approximately 60.1 million American depositary shares of TSMC as of September 30.
Other foreign investors in TSMC include asset managers BlackRock Inc and Vanguard Group Inc in the United States, as well as the Singapore sovereign wealth fund GIC.
Berkshire also disclosed new investments of $297 million in Louisiana-Pacific Corp and $13 million in Jefferies Financial Group Inc. It sold its stake in Store Capital Corp, a real estate firm that agreed to be taken private in September.
Buffett or his portfolio managers Todd Combs and Ted Weschler made specific purchases and sales, according to the filing. Investors frequently try to capitalize on Berkshire's purchases. Larger investments are typically made by Buffett.
While Berkshire does not typically make large technology bets, it frequently prefers companies that it believes have a competitive advantage, often due to their size.
TSMC, which manufactures chips for companies such as Apple Inc, Qulacomm, and Nvidia Corp, reported an 80% increase in quarterly profit last month, but was more cautious than usual about upcoming demand.
"I suspect Berkshire has a belief that the world cannot do without the products manufactured by Taiwan Semi," said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pennsylvania, which owns Berkshire shares.
"Only a small number of companies that can amass the capital to deliver semiconductors, which are increasingly central to people's lives," he added.
Berkshire Hathaway has had mixed results in the technology sector.
Its more than six-year bet in IBM Corp (IBM.N) over the last decade did not pay off, but Berkshire is sitting on huge unrealized gains on its $126.5 billion stake in Apple, which Buffett sees as more of a consumer products company.
Apple is by far the most valuable holding in Berkshire's $306.2 billion equity portfolio.
Berkshire disclosed the TSMC stake about two and a half months after beginning to reduce a decade-old, multibillion-dollar stake in BYD Co (002594.SZ), China's largest electric car company.
Berkshire increased its holdings in Chevron Corp, Occidental Petroleum Corp, Celanese Corp, Paramount Global, and RH in the third quarter.
Activision Blizzard Inc, Bank of New York Mellon Corp, General Motors Co, Kroger Co, and US Bancorp were also sold.
Buffett, 92, has led Berkshire Hathaway since 1965. The Omaha, Nebraska-based company also owns a slew of other companies, including the BNSF railroad, Geico auto insurer, several energy and industrial firms, Fruit of the Loom, and Dairy Queen.

Christopher J. Mitchell

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