Buffett’s Berkshire discloses $4.1 bln TSMC stake

Nov 14 (Reuters) – Berkshire Hathaway Inc. (BRKa.N) said it purchased more than $4.1 billion worth of Taiwan Semiconductor Manufacturing stock (2330.TW)a rare significant foray into the tech sector by billionaire conglomerate Warren Buffett.

The news sent shares of TSMC soaring, closing up 7.9% in Taiwan on Tuesday, as it bolstered investor sentiment for the world’s largest contract chipmaker, which saw its Shares hit a two-year low last month due to a sharp slowdown in global chip demand. .

In a Monday regulatory filing outlining its U.S.-listed equity investments as of Sept. 30, Berkshire said it owned about 60.1 million U.S. depository shares of TSMC.

Other foreign investors in TSMC include US asset managers BlackRock Inc. (BLK.N) and Vanguard Group Inc, and Singapore sovereign wealth fund GIC (GIC.UL).

Berkshire also disclosed new $297 million stakes in building materials company Louisiana-Pacific Corp. (LPX.N) and $13 million in Jefferies Financial Group Inc. (JEF.N). He sold an investment in Store Capital Corp (STOR.N)a real estate company which agreed in September to be privatised.

The filing does not specify whether Buffett or his portfolio managers Todd Combs and Ted Westchler made specific purchases and sales. Investors often try to piggyback on what Berkshire buys. Larger investments are normally Buffett’s.

Although Berkshire doesn’t normally make big tech bets, it often prefers companies it perceives to have competitive advantages, often due to their size.

TSMC, which manufactures chips for Apple Inc. (AAPL.O)Qulacom (QCOM.O) and Nvidia Corp. (NVDA.O)saw an 80% jump in quarterly earnings last month, but took a more cautious than usual note on demand ahead.

“I suspect Berkshire believes the world can’t live without products made by Taiwan Semi,” said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pa., which owns Berkshire stock.

“Only a small number of companies can raise the capital to provide semiconductors, which are increasingly central to people’s lives,” he added.

Berkshire has had mixed success in technology.

His over six-year bet over the past decade in IBM Corp (IBM.N) didn’t work out, but Berkshire is sitting on huge unrealized gains on its $126.5 billion stake in Apple, which Buffett views as more of a consumer products company.

Apple is by far the largest investment in Berkshire’s $306.2 billion equity portfolio.

Berkshire disclosed TSMC’s stake about 2.5 months after it began trimming a decade-old, multi-billion dollar stake in BYD Co. (002594.SZ)China’s largest electric car company.

In the third quarter, Berkshire increased its stake in Chevron Corp (CVX.N)Western Petroleum Corporation (OXY.N)Celanese Corporation (CE.N)World Paramount (PARA.O) and HR (RH.N).

He 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 US Bancorp (USB.N).

Buffett, 92, has run Berkshire since 1965. The Omaha, Nebraska-based company also owns dozens of businesses including railroad BNSF, auto insurer Geico, several energy and industrial companies, Fruit of the Loom and Dairy Queen.

Reporting by Jonathan Stempel in New York; Editing by Bradley Perrett and Stephen Coates

Our standards: The Thomson Reuters Trust Principles.

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