Warren Buffett slashed his holding of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) just months after disclosing a major stake, an unusually quick reversal by the billionaire investor that is chilling investor sentiment toward the chip giant.
Buffett’s Berkshire Hathaway Inc cut its holding of TSMC’s American depositary receipts by 86 percent last quarter, the company said in regulatory filing on Tuesday.
Assuming it sold them at the average price over the period, the stake sale would have fetched US$3.7 billion.
Photo: Lam Yik Fei, Bloomberg
Shares of the world’s largest chip foundry slid as much as 4 percent in Taipei yesterday following the news, amid broad market losses.
They closed down 3.67 percent at NT$565 on the Taiwan Stock Exchange, contributing about 165 points to the overall drop of 221.59 points on the TAIEX.
Concerns over the prospects of the industry might be the reason for Berkshire’s quick sale of TSMC receipts, equity market analyst Wang Chao-li (王兆立) said.
Global semiconductor sales were down in the second half of last year and industry production value is expected to contract this year due to excess inventory, Wang said.
TSMC shares jumped in November last year amid news that Buffett had acquired a stake of about US$5 billion, and they are still up more than 40 percent from an October low.
“It’s surprising that Berkshire cut its holding so much in just a quarter, which differs from its past practice of long-term investment and continuing to add shares,” Taishin Securities Investment Advisory Co (台新投顧) vice president Tony Huang (黃文清) said.
The chip industry has had to contend with COVID-19-induced supply disruptions in China and a slump in demand for electronics amid surging inflation.
TSMC cut its spending target by about 10 percent last year to about US$36 billion after the administration of US President Joe Biden imposed new restrictions on China’s access to critical technologies.
The economics of the industry are shifting, too. Amid US-China political tensions, governments in Washington, Tokyo and Brussels are all pushing TSMC to help build local production capabilities.
This threatens to drive up its costs.
The Hsinchu-headquartered chipmaker’s shares had rallied amid a rise in global chip stocks as investors tried to gauge a bottom. It last month extended gains even after it announced plans to further lower spending and signaled its first quarterly revenue drop in four years.
While the stock would likely be affected in the near term on news of Buffett slashing Berkshire’s holding, TSMC’s longer-term outlook is still positive, Huang said.
“Many global investors continue adding its shares with its fundamentals improving, including better utilization rates and its leadership role in advanced technology,” he said.
Last quarter, Berkshire also cut back its exposure to Activision Blizzard Inc and reduced financial holdings by selling shares in US Bancorp, Bank of New York Mellon Corp and Ally Financial Inc, the filing showed.
At the same time, Berkshire bulked up its investments in Apple Inc, Paramount Global and Louisiana-Pacific Corp.
Apple remained the company’s largest holding by market value, although the value of that position fell by US$7.4 billion in the period.
Additional reporting by CNA
DOWNTURN FORECAST: Revenue grew to NT$200.05 billion last month, making it TSMC’s best January ever, but revenue could dip by up to 16 percent this quarter Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported annual revenue growth of 16.2 percent to NT$200.05 billion (US$6.64 billion) last month, indicating that the world’s biggest contract chipmaker and a sole chip supplier for iPhones was unfazed by quarters-long supply chain inventor
Global index provider MSCI Inc has raised Taiwan’s weighting in one of its major indices, but left the country’s weighting in two others unchanged.MSCI yesterday said in a statement that following a quarterly review, it increased Taiwan’s weighting in the MSCI All-Country Asia ex-Japan Index by 0.03
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports. The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges. Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar
RSS