Warren Buffet’s Firm Invests $4.1 Billion into TSMC to Counter Economic Downfall

Aftermarket prices for shares of Taiwan Semiconductor Manufacturing Company (TSMC) rose as a result of Berkshire Hathaway‘s disclosure in SEC filings that the investment company had acquired a sizable stake in the Taiwanese chip maker. At a time when the semiconductor industry is experiencing a more general decline, the company, which is renowned for its cautious investment strategy and often avoids technology equities, snapped up somewhat more than 60 million shares of the chipmaker.

As the source of semiconductors for some of the biggest companies in the world, TSMC has recently emerged as one of the most significant nations in the world. Apple is its biggest client, and the company’s reliance on it has only grown over time, especially after Apple introduced its own line of notebook processors. But even before that, the company switched from a dual sourcing model it had earlier used, in which it bought some of its chips from Samsung as well, to relying solely on TSMC to produce its chips.

The biggest known investment made by Berkshire Hathaway is Apple, in which the company has a staggering $123 billion stake, according to its most recent SEC filing. But TSMC, the newest addition to the portfolio, has seen a whopping $4.1 billion investment from the illustrious investing house of Warren Buffett.

The market value of TSMC is currently $359 billion, and its shares increased by about 6% in after-hours trading after Berkshire Hathaway submitted its most recent 13-F report to the Securities and Exchange Commission (SEC) at yesterday’s market closure. Aftermarket trading saw the shares close at $77 following nearly two months of stock market losses. These American depository receipts (ADR) began trading at $133 in January of this year before rising to a top of just under $141 at a time when neither the Russian invasion of Ukraine nor the Federal Reserve’s aggressive anti-inflation strategy had begun.

The economic turbulence has also had an impact on TSMC, which was compelled to cut back on capital expenditures for the most recent quarter of this year due to a slowdown in order volume and equipment deliveries that were delayed. The fab was compelled to work extremely hard to meet demand from the car industry, which caused the slowdown. 

Few businesses in the world, including TSMC, are able to produce semiconductors using cutting-edge 3-nanometer chip fabrication technology. The economic stability of the firm is vital for the development of global industry.

Source: Reuters 


Muhammad Zuhair

Passionate about technology and gaming content, Zuhair focuses on analyzing information and then presenting it to the audience.