Taiwan Semiconductor (TSM) shares surged higher Tuesday after billionaire investors Warren Buffett revealed a $4 billion stake in the world's biggest contract chipmaker after the close of trading on Monday.
Securities and Exchange Commission filings show Buffett's Berkshire Hathaway BRK.B investment vehicle owns $4.1 billion in Taiwan Semi (TSMC) stock, or around 60.1 million of the group's American depositary shares, as of September 30.
Last month, TSMC posted its strongest quarterly profits in two years, with net profits for the three months ending in September of T$280.9 billion on revenues of $20.23 billion, but struck a downbeat note for the chip sector heading into 2023.
TSMC lowered its 2022 capex forecast -- a key chip and smartphone industry benchmark -- to around $36 billion from a summer estimate of between $40 billion and $44 billion, citing supply chain challenges and a softer near-term outlook linked to a slowdown in global demand and the broader impact of U.S. export restrictions of high-tech chips to China-based companies.
Taiwan Semi is also expected to begin processing some of Apple’s (AAPL) new A-series and M-series chips at its recently completed facility in Arizona early next year. The group unveiled plans for the new plant in 2020, saying it will cost $12 billion and create around 1,600 U.S.-based jobs.
TSMC's U.S.-listed shares were marked 12.1% higher in early afternoon trading to change hands at $81.62 each. The group's main listing in Taiwan was marked 7.87% higher at T$480.00 each.
Berkshire Hathaway unveiled several changes to its portfolio in the 13-F update filed late Monday, including new stakes in building materials group Louisiana-Pacific Corp. (LPX) and Jefferies Financial Group (JEF).
The investment group also trimmed stakes in General Motors GM, Activision Blizzard (ATVI) and Kroger (KR) while adding to Chevron (CVX), Occidental Petroleum (OXY) and Paramount Global (PARA).
Berkshire Hathaway, which has been run by the 92-year old Buffett since 1965, posted a 20% increase in operating profits -- the metric he most favors -- for the three months ending in September, thanks in part to gains its in railway, utility and energy businesses.
Costs linked to Hurricane Ian, however, as well as broader weakness in the car insurance market hammered Buffett's Geico division, which booked a pre-tax loss of $759 million, with his other insurance underwriters losing $962 million.
Buffett and his team purchased a net $3.7 billion in stocks over the third quarter, including his increased stake in Occidental Petroleum, and bought back around $1.05 billion in Berkshire shares.
