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Buffett’s Berkshire reveals $4.1 billion TSMC stake

Nov 14 (Reuters) – Berkshire Hathaway Inc ( BRKa.N ) said it bought more than $4.1 billion in shares in Taiwan Semiconductor Manufacturing ( 2330.TW ), a rare major foray into the technology sector by billionaire Warren Buffett’s conglomerate .

The news sent TSMC shares up more than 6% in Taiwan on Tuesday as it boosted investor sentiment for the world̵[ads1]7;s largest contract chip maker, which saw its shares hit a two-year low last month due to a sharp decline in global chip demand.

In a regulatory filing on Monday detailing the company’s U.S. listed equity investments as of Sept. 30, Berkshire said it owned about 60.1 million American depositary shares in TSMC.

Berkshire also disclosed new stakes of $297 million in building materials company Louisiana-Pacific Corp ( LPX.N ) and $13 million in Jefferies Financial Group Inc ( JEF.N ). It came out of an investment in Store Capital Corp (STOR.N), a real estate company that in September agreed to be taken private.

The filing did not specify whether Buffett or his portfolio managers Todd Combs and Ted Weschler made specific purchases and sales. Investors often try to piggyback on what Berkshire buys. Bigger investments are normally Buffett’s.

Although Berkshire does not typically make large technology investments, it often prefers companies it perceives to have a competitive advantage, often through size.

TSMC, which makes chips for the likes of Apple Inc ( AAPL.O ), Qulacomm ( QCOM.O ) and Nvidia Corp ( NVDA.O ), posted an 80% jump in quarterly profit last month but struck a more cautious tone than usual on future demand.

“I suspect that Berkshire has a belief that the world cannot do without the products produced by Taiwan Semi,” said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pennsylvania, which owns Berkshire stock.

“Only a small number of companies can raise the capital to supply semiconductors, which are increasingly central to people’s lives,” he added.

Berkshire has had mixed success in technology.

The more than six-year bet over the past decade at IBM Corp ( IBM.N ) didn’t pan out, but Berkshire is sitting on huge unrealized gains on its $126.5 billion stake in Apple, which Buffett sees more as a consumer products company.

Apple is by far the largest investment in Berkshire’s $306.2 billion stock portfolio.

Berkshire disclosed the TSMC stake about 2-1/2 months after it began reducing a decade-old, multibillion-dollar stake in BYD Co ( 002594.SZ ), China’s largest electric car company.

In the third quarter, Berkshire increased its holdings in Chevron Corp ( CVX.N ), Occidental Petroleum Corp ( OXY.N ), Celanese Corp ( CE.N ), Paramount Global ( PARA.O ) and RH ( RH.N ).

It also sold shares in Activision Blizzard Inc ( ATVI.O ), Bank of New York Mellon Corp ( BK.N ), General Motors Co ( GM.N ), Kroger Co ( KR.N ) and US Bancorp ( USB.N .

Buffett, 92, has run Berkshire since 1965. The Omaha, Nebraska-based company also owns dozens of businesses including the BNSF railroad, auto insurer Geico, several energy and industrial companies, Fruit of the Loom and Dairy Queen.

Reporting by Jonathan Stempel in New York; Editing by David Gregorio and Bradley Perrett

Our standards: Thomson Reuters Trust Principles.

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