Warren Buffett’s TSMC Selloff Backs Apple Over Its Supplier

tech.hindustantimes.com:

Just months after disclosing a huge stake in Taiwan Semiconductor Manufacturing Co., Warren Buffett's Berkshire Hathaway Inc. reported dumping almost all of it. In doing so, the world's most famous investor may have left more than $1 billion in profit on the table while revealing even he may not be immune to macroeconomic jitters.

Berkshire held 60.06 million American depositary receipts in the world's biggest chip manufacturer at the end of September, worth $4.12 billion at the time, according to an exchange filing. By the end of the year, those holdings fell to 8.3 million. Berkshire hasn't disclosed the prices it paid or received for these shares, but a quick look at TSMC's stock price chart shows that the timing was unfortunate: Shares climbed 29% to hit a 10-month high earlier this week before news of the selloff brought the shares down again.

So, at current prices, instead of sitting on $5.8 billion of TSMC stock, Berkshire has a $765 million stake.

It's difficult to criticize the Omaha-based company for getting nervous. TSMC's US-listed shares sank 16% in the third quarter and climbed a mere 8.7% in the next. At that time, interest rates were rising, the global economic outlook didn't look particularly rosy and TSMC's biggest client, Apple Inc., was grappling with supply problems after a Covid outbreak hit factories in China.

And for years, portfolio managers have been well aware that semiconductor stocks tend to rise and fall in tandem with the economic cycle. If a global recession was coming, then there were probably better bets to make.

Instead of holding on to TSMC, Berkshire chose to dump it and maintain its position in Apple, boosting its stake by a mere 333,856 shares. The iPhone maker remains