Warren Buffett closed out Berkshire Hathaway Inc’s. position in Taiwan Semiconductor Manufacturing Co., concluding an abrupt withdrawal from the chip-maker that the billionaire blamed on rising tensions in the region.
(Bloomberg) — Warren Buffett closed out Berkshire Hathaway Inc’s. position in Taiwan Semiconductor Manufacturing Co., concluding an abrupt withdrawal from the chip-maker that the billionaire blamed on rising tensions in the region.
The conglomerate exited the stock in the first quarter, according to a filing, after Berkshire slashed its holding by 86% late last year. That move — which sent TSMC shares tumbling and investors spiraling — was motivated by concerns over geopolitical tensions between China and Taiwan, Buffett told investors at its annual meeting earlier this month.
Buffett has otherwise continued to heap praise on the company, calling it a “fabulous enterprise” and one of the best managed and most important companies in the world. “There’s nobody in the chip industry that’s in their league,” he said at the meeting in Omaha, Nebraska. TSMC’s location was the problem, he said at the time.
Global policymakers and customers are increasingly wary of becoming too technologically reliant on Taiwan, which Beijing has claimed is part of China. TSMC is building more capacity in the US and Japan, amid pressure to produce its advanced chips abroad.
Buffett has also said he prefers deploying capital in Japan instead of Taiwan.
“I feel better about the capital that we’ve got deployed in Japan than in Taiwan,” Buffett said earlier this month. “I wish it weren’t so, but I think that’s the reality, and I re-evaluated that in the light of certain things that were going on.”
In April, TSMC reaffirmed its target for capital spending in a sign Apple Inc.’s main chipmaker intends to shore up its lead in advanced semiconductors ahead of a tech recovery. It expects sales of $15.2 billion to $16 billion this quarter, a shade below the $16.1 billion analysts projected on average.
The company, like the rest of the industry, is grappling with uncertainty about electronics demand this year and beyond, amid persistent inflation and a looming recession.
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