Berkshire lowered its holding of TSMC ADRs by 86.2% in the last quarter.
TSMC stock slides as much as 4% in Taipei on the filing
Berkshire Hathaway Inc. lowered its stake in Taiwanese contract chipmaker TSMC, as well as in some banks in the fourth quarter while strengthening its holdings in Apple Inc.
According to a regulatory filing, Warren Buffett’s Berkshire cut its position in Taiwan Semiconductor Manufacturing Co Ltd (TSMC) to 8.29 million which is by 86.2% sponsored American depositary shares.
This comes nearly three months after Berkshire unveiled it acquired more than $4.1 billion worth of TSMC stock, which sent shares of the world’s largest contract chipmaker surging.
TSMC depository receipts plummeted 4% in U.S. after-hours trade on Tuesday. In Taiwan, TSMC shares opened down 3.3% as Asian markets began Wednesday trading.
Depositary shares in TSMC, which did not immediately respond to a call for a statement, have surged nearly 32% in 2023, closing at $97.96 on Tuesday.
Buffett’s Berkshire made a modest profit on TSMC. It was not a massive win for Berkshire, said Cathy Seifert, a CFRA Research analyst. According to her calculations, Berkshire acquired it for approximately $68.5 and sold it for $74.5.
It is unusual but not exceptional for Berkshire to immediately reverse a multi-billion-dollar investment in a company’s stock. In the first quarter of 2022, Berkshire sold almost all of what had been an $8.3 billion stake in Verizon Communications Inc that it amassed towards the end of 2020.
The previous month, TSMC said revenue in the first quarter is expected to decline 5% as it withstands a global downward spiral in the chip industry because of softening consumer demand for electronics. TSMC executives have said they do not expect market conditions to make progress until the second half of the year.
Furthermore, TSMC, Buffett also divested 91.4% of its shares in US Bancorp, to 6.7 million shares, and shrunk its stake in BNY Mellon by approximately 60%, to 25.1 million shares. Both reductions totaled approximately $5.5 billion at current prices.
Warren Buffett’s conglomerate also holds shares in Citigroup Inc, Bank of America, and Jefferies.
Berkshire cut back some positions across its portfolio of U.S. listed companies, including Chevron, Activision Blizzard, maker of the “Call of Duty” video game, and Kroger – an American retail company.
Microsoft Corp is making efforts to determine the acquisition of Activision Blizzard. On Feb. 21, this year Microsoft will support the deal in front of the European Union and national antitrust officials at a closed hearing.
Among Berkshire’s few add-ons is Apple, which Buffett sees more as a consumer products company. Berkshire acquired another 20.8 million Apple shares worth $3.2 billion, lifting its stake to 5.8%, according to the recent filing.
Shares in Apple have risen approximately 18% this year.
Berkshire also unveiled a new stake of $84 million in building materials company Louisiana-Pacific Corp.
Global expansion
The board also endorsed a proposal to infuse up to $3.5 billion into the company’s subsidiary in Arizona, which will be part of an earlier stated investment of $40 billion in the United States. The previous year, TSMC announced that it was building a second semiconductor factory in Phoenix and increasing its investment in the location.