When evergreen tycoon Warren Buffett chooses a conglomerate to invest his billions in, associated stocks skyrocket and new market trends are created. In particular, his group of holdings, Berkshire Hathawayacquired a stake worth about $5 billion in the world’s largest group of semiconductor (chip) manufacturers, the Taiwanese company Taiwan Semiconductor Manufacturing Co. (aka TSMS). And the move was taken as a sign that the legendary investor believes the leading semiconductor maker’s shares have bottomed out after a massive sale of more than $250 billion in securities. Omaha-based Berkshire acquired almost 60 million ADRs of the aforementioned company in July-September. According to a Bloomberg report, assuming that Warren Buffett bought TSMC stock at the third quarter average price, that stake would have cost him $5.1 billion. They are currently trading at $72.80 each. On the Taiwanese stock market yesterday, after the news of the tycoon’s investment, TSMC’s share price rose 9.4%, the biggest intraday gain in more than two years.

Major clients

He acquired a stake worth about $5 billion in the world’s largest semiconductor (chip) manufacturing group.

The Taiwanese company manufactures semiconductors for customers such as Nvidia and Qualcomm and is the exclusive supplier of Apple’s custom silicon chips. Now, in relation to the portfolio of Warren Buffett, Apple positions in it remain the highest in terms of market value, if we talk about a separate group. Of course, it should be noted that the 92-year-old Buffett has long avoided the high-tech industry, arguing that he does not want to invest in a business that he does not fully understand. However, that attitude has changed in recent years, with him directing an increasing proportion of his company’s investments to the tech sector. Semiconductor manufacturing is a business activity that promises continuous growth in the coming years. The reason is that it is considered vital to the expansion of emerging industries such as self-driving and electric cars, artificial intelligence and connected home applications. The expansion of cloud-based software services, such as Amazon.com’s AWS, also promises to increase chip orders heading to large data centers. Silicon is one of the elements used in semiconductors.

In addition, TSMC, which has displaced US Intel as the leader in chip technology, has become an important player at a time when the US and China are vying for leadership in the global chip industry. TSMC, the company with the highest market value in Taiwan, has the ability to manufacture the most advanced semiconductors on an international scale.

Finally, the US has imposed tougher sanctions on high-tech semiconductors manufactured for Chinese customers, primarily to prevent the Chinese military from gaining access to them.