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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 worth of stock in Taiwan’s semiconductor maker (2330.TW)a rare significant foray into the tech sector by billionaire Warren Buffett’s conglomerate.

The news sent TSMC shares up more than 6% in Taiwan on Tuesday, boosting investor sentiment towards the world’s largest chipmaker, which saw its shares plunge to a two-year low last month due to a sharp slowdown in global demand for chips.

In a regulatory filing released Monday describing its investments in US-listed stocks as of Sept. 30, Berkshire said it owns about 60.1 million US depositary shares of TSMC.

Berkshire also disclosed a new $297 million stake in building materials company Louisiana Pacific Corp (LPX.N) and $13 million in Jefferies Financial Group Inc (JEF.N). I got out of 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 buys. The biggest investments are usually Buffett’s.

While Berkshire doesn’t usually make big tech bets, it often favors companies it sees as having competitive advantages, often through their size.

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

“I think Berkshire has a belief that the world can’t do without products made by Taiwan Semi,” said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pennsylvania, who owns shares in Berkshire.

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He added, “There are only a few companies that can muster the capital to offer semiconductors, which are becoming increasingly central to people’s lives.”

Berkshire has had mixed success in the technology space.

Its bet for more than six years over the past decade has been on IBM Corp (IBM.N) It didn’t work out, but Berkshire is sitting on a huge unrealized gain 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 disclosed the stake in TSMC about two and a half months after it began diluting a $10 billion stake in BYD Co. (002594.SZ)the largest electric vehicle company in China.

In the third quarter, Berkshire added to its holdings 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)General Motors (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.

(Reporting by Jonathan Stempel) in New York. Editing by David Gregorio and Bradley Perrett

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