Noted wealthy individual Warren Buffet has bought 60 million shares in chip fabricator TSMC, with the investment carried out via his investment company Berkshire Hathaway, valued at $5 billion. The news comes via an SEC filing (opens in new tab).
As the sixth richest person in the world, with a net worth of over $100 billion, Buffet should know a thing or two about investing. However, his purchase is oddly timed, with companies such as Intel (opens in new tab) and GlobalFoundries (opens in new tab) announcing market share losses and job cuts as the semiconductor industry experiences a slowdown following its recent peak.
Still, we assume he knows what he’s doing, and TSMC’s own figures (opens in new tab) show a rise in revenue for the first ten months of 2022 of 44% over the same period in 2021 and a profit of $8.81 billion for July to September this year. However, in a conference call announcing the results back in October, the company’s CFO Wendell Huang said he expected “our business to be flattish as the end market demand weakens, and customers' ongoing inventory adjustment is balanced by continued ramp-up for our industry-leading 5nm technologies."
In happier news, the Taiwan-based company, which is the largest dedicated independent semiconductor foundry in the world and is mostly owned by foreign investors since listing on the NYSE in 1996, has negotiated a one-year exemption from US export control rules (opens in new tab) and can continue ordering American equipment to use in its Nanjing manufacturing facility, something that might have attracted Buffet to the firm. Samsung and SK Hynix received similar deals.
Chinese businesses contributed 10% of TSMC’s revenue in 2021, having been 17% the year before. However, according to the business news site Nikkei Asia (opens in new tab), the announcement of the export rules caused TSMCs share price to drop markedly, contributing to a fall of 35% this year and wiping a trillion new Taiwan dollars off the firm’s market capitalization. For context, there are 31 NT$ to a single US dollar.