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Taiwan Semiconductor is “one of the best managed” and most important companies in the world

Billionaire investor Warren Buffett spoke volumes by not complimenting U.S. semiconductor makers at Berkshire Hathaway’s ( BRK-A , BRK-B ) annual meeting on Saturday.

Instead, Buffett drew praise for his one-time chip play: Taiwan Semiconductor (TSM).

“Taiwan Semiconductor is one of the best-managed companies and important companies in the world,” the 92-year-old Buffett told a packed CHI Health Center in Omaha, Nebraska. “I don’t like the location and reconsidered, … [but] there is no one in the chip industry that is in their league, at least in my view.”

Legendary buy-and-hold investor Buffett surprised some observers by quickly exiting a significant position in TSMC. Berkshire disclosed in February that it was selling 86% of its shares in Taiwan Semiconductor, a stake it built for about $4.1[ads1] billion just months earlier.

Berkshire currently owns 0.2% of Taiwan Semiconductor.

In April, Buffett explained that he was selling the position amid rising geopolitical tensions between China and Taiwan as well as China and the United States.

“Great people and great competitive position, but I’d rather find it in the United States,” Buffett added Saturday.

Taiwan Semiconductor is “one of the best managed” and most important companies in the world

Billionaire investor Warren Buffett speaks in Omaha, Neb., Monday, Nov. 14, 2011. (AP Photo/Nati Harnik)

Taiwan Semiconductor is seen as the dominant player in the advanced chip manufacturing space. The company supplies chips to tech giants Apple ( AAPL ) and Qualcomm ( QCOM ), to name a few.

Analysts have praised the company for taking advantage of major changes in technology, particularly the demand for 5G wireless and faster processing data centers.

The company envisions spending up to $36 billion this year on capital expenditures.

TSMC stock has risen 120% over the past five years, outpacing the S&P 500’s 55% gain over that time period.

Chip rivals such as Intel ( INTC ) are trying to regain market share by building new factories in the US and improving innovation. Others like Qualcomm and AMD ( AMD ) are starting to talk up initiatives in the hot artificial intelligence space.

“We run a software environment that enables everyone in the world,” Intel CEO Pat Gelsinger told Yahoo Finance Live. “Generative AI is going mainstream with the democratization of AI, and that’s where Intel comes in.”

Brian Sozzi is Yahoo Finance’s managing editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Advice on agreements, mergers, activist situations or other things? Email

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