Buffett’s Berkshire discloses big Taiwan Semi stake, Auto News, ET Auto
Berkshire Hathaway Inc said it bought more than $4.1 billion of stock in Taiwan Semiconductor Manufacturing Co , a rare significant foray into the technology sector by billionaire Warren Buffett’s conglomerate.
In a Monday regulatory filing describing its U.S.-listed equity investments as of Sept. 30, Berkshire said it owned about 60.1 million American depositary shares of the world’s largest contract chipmaker.
Berkshire also disclosed new stakes of $297 million in building materials company Louisiana-Pacific Corp and $13 million in Jefferies Financial Group Inc. It exited an investment in Store Capital Corp, a real estate company that agreed in September to be taken private.
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 piggy back on what Berkshire buys. Larger investments are normally Buffett’s.
While Berkshire does not normally make big technology bets, it often prefers companies it perceives to have competitive advantages, often through their size.
Taiwan Semi posted an 80% jump in third-quarter profit, helped by demand from customers such as iPhone maker Apple Inc, by far the largest investment in Berkshire’s $306.2 billion equity portfolio.
“I suspect Berkshire has a belief that the world cannot do without the products manufactured by Taiwan Semi,” said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pennsylvania, which owns Berkshire shares.
“Only a small number of companies that can amass the capital to deliver semiconductors, which are increasingly central to people’s lives,” he added.
Berkshire has had mixed success in technology.
Its more than six-year wager during the last decade in IBM Corp did not pan out, but Berkshire is sitting on huge unrealized gains on its $126.5 billion stake in Apple, which Buffett views more as a consumer products company.
Berkshire disclosed the Taiwan Semi stake about 2-1/2 months after it began reducing a decade-old, multi-billion dollar stake in BYD Co , China’s largest electric car company.
In the third quarter, Berkshire added to its stakes in Chevron Corp, Occidental Petroleum Corp, Celanese Corp, Paramount Global and RH.
It also sold shares of Activision Blizzard Inc, Bank of New York Mellon Corp, General Motors Co, Kroger Co and US Bancorp.
Buffett, 92, has run Berkshire since 1965. The Omaha, Nebraska-based company also owns dozens of businesses such as the BNSF railroad, the Geico auto insurer, several energy and industrial companies, Fruit of the Loom and Dairy Queen.