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Berkshire Hathaway bought a $4.1B stake in Apple chipmaker TSMC
- SSJPython 4y agoVery interesting. Maybe Buffett isn't too concerned about the geopolitical risks to TSMC? There's been tons of chatter about China militarily reunifying with Taiwan by 2027 but I'm guessing Buffett thinks it's all hot air? Because if China does invade Taiwan, then TSMC would be the first to suffer.
- jandrese 4y agoI'd think the CCP would be wary about killing the golden goose with TSMC. Plus there is currently a very prominent example of why attempting to annex neighbors is not a good idea in the modern world. Ruin to economy, reputation, world standing, and even military prestige are all possible. Absolute embarrassment.
- mrtweetyhack 4y ago
- newsclues 4y agoMost people that don't have the golden goose, don't care about killing it. If your enemy has a golden goose and you don't, there isn't much stopping you from killing it.
- NineStarPoint 4y agoAbout 70% of the chips that China’s extremely lucrative electronics industry uses come from TSMC though. They might not have the golden goose that is TSMC, but one of their own golden geese relies on it to keep running.
- HWR_14 4y agoYeah, except for recent legal changes are making that number go down.
- hillcrestenigma 4y agoYes, but if you know that you can probably steal the enemy's golden goose if you tried hard enough, I would think you wouldn't kill it outright. CCP is better off keeping the world's best chip fab in a region they claim to be their territory.
- Invictus0 4y agoDidn't stop them with Alibaba. Have you seen the Chinese stock market performance this year?
- magic_man 4y agoThe ccp is playing the long game. I don't think they really care about short term economic loses. I mean look at what the did with hk.invading a island is hard and they probably need to worry about America. Otherwise Taiwan is probably in trouble.
- nonethewiser 4y ago> The ccp is playing the long game. It's more of a medium game. A dictatorship can plan 5-10 years out. But they can't exist indefinitely. By design, there is no succession plan.
- jandrese 4y agoHanding off the country to your child is a time honored succession plan for highly authoritarian regimes. From Kings to Kims the only successor you can trust is your own blood, especially if you've set the country up as a cult with your family as deities.
- jasonwatkinspdx 4y agoChina's goal is to become self sufficient, but it'll take time. SMIC did ship 7nm chips faster than expected however.
- nocsi 4y agoI don't think having your reputation, world standing or military prestige be ruined is a deterrent. Countries that are oil exporters are raking in the money and are able to pursuit their geopolitical goals. Now is probably one of the best times to do it considering the greater global turmoil and energy crisis. Take a look at Russia & Azerbaijan, more will come.
- Trisell 4y agoTSMC is building a huge fab here in America. It's a couple/few years out, but that would do a lot to alleviate this risk. And it could be rushed if it were prioritized as an American National Security Project. https://topics.amcham.com.tw/2022/08/tsmc-prepares-american-engineers-for-its-first-u-s-fab/ https://topics.amcham.com.tw/2022/08/tsmc-prepares-american-...
- hprotagonist 4y agos/elevate/alleviate i think.
- Trisell 4y agoEngrish is my first language....
- thyrsus 4y agoI'm confused: do you think China would be more likely to take Taiwan if it saw that nexus of economic leverage starting to diffuse?
- Trisell 4y agoNo. I think the CCP wants Taiwan indifferent of it being an economic powerhouse, or a broken 3rd world island. Failure to integrate Taiwan has been a stain on the CCP system, and it's not a system that can afford any stains. All I'm pointing out is should Taiwan be invaded, TSMC stands to be in a position to receive a significant infusion of government cash to bring that fab online ASAP. And once that FAB is completed the systemic risk of China to TSMC evaporates, and at that point I believe that TSMC goes to the moon.
- nicoburns 4y agoThe fab TSMC is building in America is such a small amount of their volume as to make almost no difference. And it won’t even be a leading node by the time it’s built.
- anotherman554 4y agoI don't know whether he's concerned or not, but you don't get high stocks returns without taking on risk.
- e40 4y ago> Maybe Buffett isn't too concerned about the geopolitical risks to TSMC? My first thought. I wonder if this makes any action by CCP less or more likely, as well as the possible intervention by the US??
- Kon-Peki 4y agoIf all the chip fabs in Taiwan are wiped out, the remaining fabs in the rest of the world are going to be insanely profitable, right? If this happens within the next two years, it is probably devastating for TSMC and a bad investment by Buffett. After two years, ???
- Apocryphon 4y agoThe 2027 date is not actually real: https://twitter.com/MikeBlack114/status/1571401031539367939 https://twitter.com/MikeBlack114/status/1571401031539367939
- NineStarPoint 4y agoI suppose it's an Apple news site, but calling them "Apple chipmaker" is a heavy understatement of how ubiquitous TSMC's chips are. Even without Apple involved TSMC would have its foundries running at full capacity to meet demand. Ignoring geopolitical concerns, TSMC is much more of a "boring" manufacturing company than a tech company. So it's not surprising that Berkshire would invest in it.
- nikanj 4y agoPeople also routinely call Foxconn ”the iPhone factory”, especially if something bad happens there
- tester756 4y agojesus christ calling TSMC an "Apple chipmaker", tactless.
- lotsofpulp 4y agoI would call Berkshire an “Apple stockholder” since the only reason they have kept up with the market over the last 10+ years is because of their Apple holdings.
- bilsbie 4y agoWhy didn’t the other investments pan out?
- lotsofpulp 4y agoBuffett missed out on massive tech company returns because he was opposed to investing in businesses he did not understand, and he did not understand tech companies. https://www.theguardian.com/technology/2016/may/16/warren-buffett-apple-stocks-berkshire-hathaway https://www.theguardian.com/technology/2016/may/16/warren-bu... >Asked why he had bought IBM shares rather than Apple or Google at Berkshire Hathaway’s 2012 shareholder meeting, Buffett said: “The chances of being way wrong in IBM are probably less, at least for us, than the chances of being way wrong in Google or Apple ... I just don’t know how to value them. >“I would not be at all surprised to see them be worth a lot more money 10 years from now but I would not buy either one of them. I sure as hell wouldn’t short them either.” And then Buffett made some bad bets on Kraft Heinz (3G was a poor partner to invest with, actually was a surprising move since 3G already had a poor reputation) and IBM, but I think it was mostly missing out on Facebook/Google/Microsoft/Apple/Amazon/Netflix/etc growth. https://www.reuters.com/article/us-berkshire-buffett-kraft-heinz-idUSKCN1QE1F0 https://www.reuters.com/article/us-berkshire-buffett-kraft-h...
- DancingLinks 4y agoThe mother of all Berkshire Hathaway subreddits: r/brkb
- 1letterunixname 4y agoIs it 1/1500'th of r/brka but with 1/10k'th the vote?
- LeifCarrotson 4y agoI get that this article is on 9to5mac, but can they lay off the Apple references for just a breath? > Apple chipmaker TSMC > [three paragraphs of background on Buffet's opinion of Apple] > first time Berkshire has bought stock in Apple’s chipmaker > stake in Apple chipmaker TSMC > Samsung has recently been upping its efforts to catch up in order to win back Apple business, and TSMC’s Apple revenue could potentially be cut in half if that happened. > Both TSMC and Samsung are also working on US production of advanced chips suitable for Apple devices, something which the Cupertino company is likely to welcome. Apple is TSMC's largest single customer, but they're only ~25% of their revenue. Is this an article about Berkshire Hathaway, TSMC, or Apple?
- hackandtrip 4y ago> Apple is TSMC's largest single customer, but they're only ~25% of their revenue. Consider that Apple is also 25% of total assets of Berkshire (around 250$B), so it's not much of a surprise that Berkshire is going into the main manufacturer of the biggest stock they have - hence the strong linking between the wto.
- soperj 4y agoConsidering that they have slightly less than a billion shares as of May 2022, I don't think that number is correct.
- lotsofpulp 4y agohttps://www.cnbc.com/berkshire-hathaway-portfolio/ https://www.cnbc.com/berkshire-hathaway-portfolio/ ~915.2M AAPL shares as of Sep 30, 2022, so ~$140B worth (20% of BRK’s market cap). For comparison, BRK market cap is ~$687B and AAPL market cap is $2.4T. https://companiesmarketcap.com/ https://companiesmarketcap.com/
- 1letterunixname 4y agoMakes you wonder if the Sage of Omaha is encouraging Apple to become a Samsung with both horizontal and vertical integration.
- mrtweetyhack 4y ago
- warinukraine 4y agoDoes anyone else find it bewildering that a conservative investor like Warren Buffet makes a bet like this? I mean, if China invades, it's gone. This kind of uncertainty is the type of thing he always warns against.
- danielmarkbruce 4y agoIt's $4 billion. Berkshire is $700 billion market cap. And, while he runs Berkshire conservatively overall, some individual bets he makes are very risky. He risks billions betting on the weather.
- bombcar 4y agoHe's also a trillion years old and 40% of what he owns is already APPL anyway. Only VANGUARD owns more of Apple than he does.
- newaccount2021 4y ago
- hnthrowaway0328 4y agoI think Buffet moves in high end financial and political circles so he probably sees what we don't see. Actually, what I'm thinking is, if China does invade Taiwan, China will make double sure that it does not spur the financial interest group too much, so it will almost surely guarantee the safety of the investment.
- heisenbit 4y agoMaybe the analysis shows that TMSC has - to the degree possible in tech - a moat? The EUV tech is not easy to scale up so whoever is ruling the field right now has a decent chance to outdistance rivals for quite some time.
- drexlspivey 4y agoGoing by the numbers, TSM is trading at <15 Trailing P/E with a 47% YoY growth. It's a very good buy if you discount the invasion risk. Seems like Buffet sees the implied risk as overblown.
- lizardactivist 4y ago"Apple chipmaker"?
- m00dy 4y agoWe are almost bottom in the market then...
- astlouis44 4y agoIt’s all about the moat, like Buffet always says. And TSMC sure has a solid one.
- kennethh 4y agoI have been investing in an Emerging Market fund and TSMC is now the biggest position there. Used to be Alibaba and Tencent. Good to invest along with Buffet:)