US-listed shares of TSMC fell 6% Wednesday after Warren Buffett’s Berkshire Hathaway sold roughly 86% of its investment last quarter.
Berkshire had first disclosed its $4.1 billion position in November, and the sale marks a reversal of the firm’s usual tendencies to hold investments for years.
Shares had climbed about 18% from when they were first purchased.
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Shares of TSMC dropped 6% early Wednesday after Warren Buffett’s Berkshire Hathaway dumped most of its stake just months after buying the Taiwanese chipmaker’s stock.
The sale, which was disclosed in fourth-quarter 13F filings late Tuesday, made up roughly 86% of the Omaha-based firm’s position.
It also marked an unusually quick turnaround for Buffett’s company, which typically holds onto investments for years instead of a few months.
Berkshire Hathaway first revealed its $4.1 billion stake in TSMC on November 14. It’s now down to about $618 million.
Berkshire sold its shares after they had climbed about 18% from when they were first purchased. By the middle of 2022, chipmakers across the board had been reducing production to deal with oversupply issues.
Meanwhile, TSMC seems to have been caught up in the artificial intelligence boom that has pushed chip-makers like Nvidia as well as little-known tech companies higher. The popularity of OpenAI’s language tool, ChatGPT, sparked the massive investor interest after launching in November. TSMC stock has enjoyed an almost 30% rally to start 2023.
Last month, TSMC forecasted that its revenue could fall as much as 5% this quarter, and that it could face more weak demand. This week, however, the company’s board approved a capital injection of up to $3.5 billion into its Arizona unit.
At the end of 2022, Berkshire made several other changes to its stock portfolio. It not only slashed its stake in the TSMC, but did so with US Bancorp, BNY Mellon, and Activision Blizzard. In the same stretch, it added to its position in Apple.