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With little knowledge about tech, Buffet dives into semiconductors market

Autor: Article based upon analysis from Reuters Breakingviews | Link: Buffett places classic chips in $4 bln Taiwan bet
Timp de citit: < 1 minute

Put an underevaluated stock that’s at the ground and the prospects of semiconductors market together, and you can easily understand one of the most recent business decisions of Warren Buffett.

During Q3, the Oracle of Omaha bought 60.1 million American depositary shares of Taiwan Semiconductor Manufacturing, or TSMC, worth over $4 billion.

So as of the end of September, Berkshire Hathaway, Buffet’s multinational conglomerate, owns 1.2% of a near-monopoly in cutting-edge tech.

It is an investment almost as exotic as his $11 billion bet on IBM, that can be evaluated as a fail. Except that with TSMC things look way too appealing to be ignored.

Firstly, TSMC’s stock has taken a beating this year, in part on fear China might invade Taiwan, its headquarters. Another reason for devaluation is a chip supply glut amid slowing demand.