Warren Buffett takes $4.1 billion stake in TSMC, sends TSMC shares upwards

Warren Buffett’s Berkshire Hathaway has purchased a $4.1 billion stake in TSMC (Taiwan Semiconductor Manufacturing Company), wherein a filing with the United States Securities and Exchange Commission (SEC) on Monday, Berkshire Hathaway acquired around 60 million American depository shares of TSMC.

The news saw TSMC shares rise over 8% in Taiwan on Tuesday, with a TSMC spokesperson explaining: “TSMC welcomes all investors with the propensity to buy and hold TSMC’s stock”. TSMC has been the star of the world without many people knowing their electronic devices are powered by chips made by the Taiwan-based company (which is also making fabrication plants in the US).

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TSMC CFO Wendell Huang explained on a conference call: “Moving into the fourth quarter 2022, we expect our business to be flattish as the end market demand weakens, and customers’ ongoing inventory adjustment is balanced by continued ramp-up for our industry-leading 5nm technologies”.

Taiwan Semiconductor Manufacturing Company (TSMC) also reduced its capital expenditure by 10% where it previously had planned to spend $40 billion this year, but after spending $25 billion so far, it will spend around $36 billion in the end… shaving off $4 billion from its capital expenditure. Not a big drop, but almost what Berkshire Hathaway just invested into TSMC, well, virtually the same down to the dollar.

As for Warren Buffett, the man has a net worth of around $103 billion… and has invested in many companies, but with TSMC making chips for CPUs, GPUs, electric vehicles and self-driving cars, AI, the cloud, IoT, consoles, and so much more… the huge investment makes sense.

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