American investment guru Warren Buffett is betting on chips. But they are the Taiwanese ones of Tsmc, the biggest producer in the world. His conglomerate Berkshire Hathaway bought 60 million shares of Tsmc listed in the United States: he, who had long been reticent on the tech sector, has gradually opened the doors to this sector. Apple in 2016 became one of its main investments, then gradually smaller operations arrived – often in the IPO – and by the end of August the weight of the tech in its portfolio was estimated at 45%.
The news of the latest installment caused the stock of the exclusive supplier of Apple’s customized silicon chips to surge, after a 250 billion selloff: it closed up 7.9% in Taiwan.
“Tsmc welcomes all investors with a willingness to buy and hold shares,” said a spokesperson for the chip maker. The Taiwanese giant produces about 90% of the world‘s super-advanced computer chips, a supplier par excellence to the likes of Apple, Nvidia and Qualcomm.
Berkshire’s purchase of a stake comes as tensions between China and Taiwan intensify. In recent months, Beijing’s military pressure on Taiwan has put the spotlight on Taiwan’s pivotal role in the global chip manufacturing industry. Super advanced semiconductors, such as those produced by Tsmc, are difficult to make due to the high cost of development and the level of knowledge required, which means that much of the production is concentrated in only a handful of suppliers. The company – dubbed the “sacred mountain” in Taiwan – is so important to the island that its employees can apply to be exempted from reserve military training.