Nov 14 (Reuters) – Berkshire Hathaway Inc (BRKa.N) said it bought more than $4.1 billion worth of shares in Taiwan Semiconductor Manufacturing (2330.TW), a rare major move in the technology sector by the billionaire conglomerate Warren Buffett.
The news sent shares in TSMC up more than 6% in Taiwan on Tuesday as it boosted investor sentiment for the world’s largest contract chipmaker, which saw its shares hit a two-year low last month on the back of a sharp slowdown in global demand to chips, gave it a boost.
In a filing Monday detailing US-listed equity investments as of Sept. 30, Berkshire said it owned approximately 60.1 million US-deposit shares of TSMC.
Berkshire also announced new $297 million stakes in building materials company Louisiana-Pacific Corp (LPX.N) and $13 million in Jefferies Financial Group Inc (JEF.N). It left an investment in Store Capital Corp. (STOR.N), a real estate company that agreed to go private in September.
The filing did not specify whether Buffett or his portfolio managers Todd Combs and Ted Weschler made specific purchases and sales. Investors often try to piggyback on what Berkshire buys. Larger investments are normally Buffett’s.
While Berkshire doesn’t normally make big technology bets, it often favors companies it believes have competitive advantages, often because of their size.
TSMC, which makes chips for Apple Inc (AAPL.O), Qulacomm (QCOM.O) and Nvidia Corp (NVDA.O), posted an 80% increase in quarterly profit last month, but was more cautious than usual on upcoming demand.
“I suspect Berkshire believes the world cannot do without Taiwan Semi’s products,” said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pennsylvania, who owns Berkshire’s stock.
“Only a small number of companies that can raise the capital to supply semiconductors, which are becoming increasingly important in people’s lives,” he added.
Berkshire has had mixed success in technology.
IBM Corp.’s (IBM.N) bet of more than six years over the past decade has failed, but Berkshire is sitting on huge unrealized gains on its $126.5 billion stake in Apple, which Buffett sees more as a consumer products company.
Apple is by far the largest investment in Berkshire’s $306.2 billion stock portfolio.
Berkshire announced TSMC’s stake about 2.5 months after it began reducing a multibillion-dollar decade-old stake in BYD Co (002594.SZ), China’s largest electric car company.
In the third quarter, Berkshire increased its holdings in Chevron Corp (CVX.N), Occidental Petroleum Corp (OXY.N), Celanese Corp (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 Co (GM.N), Kroger Co (KR.N), and U.S. Bancorp (USB.N) .
Buffett, 92, has run Berkshire since 1965. The Omaha, Nebraska-based company also owns dozens of companies such as the BNSF Railroad, the auto insurer Geico, several energy and industrial companies, Fruit of the Loom and Dairy Queen.
Reporting by Jonathan Stempel in New York; Edited by David Gregorio and Bradley Perrett
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