Nov 14 (Reuters) – Berkshire Hathaway Inc ( BRKa.N ) said it had bought more than $4.1 billion in Taiwan Semiconductor Manufacturing ( 2330.TW ) shares, a rare major foray into the technology sector by billionaire Warren Buffett’s conglomerate.
The news sent TSMC shares up 7.9% in Taiwan on Tuesday, boosting investor sentiment for the world’s largest contract chip maker, whose shares hit a two-year low last month amid a sharp decline in global chip demand. .
In a Monday regulatory filing detailing the US-listed equity investment on September 30, Berkshire said it owned about 60.1 million TSMC American Depositary Shares.
TSMC’s other foreign investors include U.S. asset managers BlackRock Inc ( BLK.N ) and Vanguard Group Inc and Singapore sovereign wealth fund GIC ( GIC.UL ).
Berkshire also unveiled a new stake of $297 million in building materials company Louisiana-Pacific Corp ( LPX.N ) and $13 million in Jefferies Financial Group Inc ( JEF.N ). It exited an investment in Store Capital Corp ( STOR.N ), a real estate firm that agreed to be taken private in September.
The filing did not say whether Buffett or his portfolio managers, Todd Combs and Ted Weschler, made specific purchases and sales. Investors often try to back away from buying Berkshire. Bigger investments are usually made by Buffett.
While Berkshire doesn’t typically make big tech bets, it often favors companies it sees as having a competitive advantage, often because of their size.
TSMC, which makes chips for companies such as Apple Inc ( AAPL.O ), Qulacomm ( QCOM.O ) and Nvidia Corp ( NVDA.O ), reported an 80% rise in quarterly profit last month, but struck a more cautious note than. usually by expected demand.
“I suspect that Berkshire believes that the world cannot do without the products made by Taiwan Semi,” said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pennsylvania, who owns Berkshire stock.
“Only a small number of companies 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.
Its more than six-year bets on IBM Corp ( IBM.N ) have not panned out over the past decade, but Berkshire is enjoying huge unrealized gains from its $126.5 billion stake in Apple, which Buffett sees as more of a consumer goods company.
Apple is by far the largest investment in Berkshire’s $306.2 billion stock portfolio.
Berkshire opened the TSMC stake about 2-1/2 months after it began reducing its decade-old, multibillion-dollar stake in China’s biggest electric car company, BYD Co ( 002594.SZ ).
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 ) in the third quarter. .
It also sold shares in Activision Blizzard Inc ( ATVI.O ), Bank of New York Mellon Corp ( BK.N ), General Motors Co ( GM.N ), Kroger Co ( KR.N ) and US Bancorp ( USB.N ). .
The 92-year-old Buffett has led Berkshire since 1965. The Omaha, Nebraska-based company also owns dozens of companies, including BNSF Railroad, auto insurer Geico, several energy and industrial companies, Fruit of the Loom and Dairy Queen.
Reporting by Jonathan Stempel in New York; Editing: Bradley Perrett and Stephen Coates
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