Earlier this year, Warren Buffett’s Berkshire Hathaway revealed a surprising decision to unload most of its stake in Taiwan Semiconductor Manufacturing Co. (TSMC) just months after investing $4.1 billion in the chip maker. And now we know why.
In a recent interview with the Japanese finance publication Nikkei, Buffett revealed that “geopolitical tensions” surrounding the region were a significant consideration in the company’s decision to end its ties with TSMC. While Buffett went on to praise TSMC for good management, he also added that there are better places for Berkshire to invest its money.
Berkshire made the $4.1 billion investment in TSMC in June and September of 2022 but offloaded more than 86 percent of shares by the end of the year. It still owned 8.3 million shares in early 2023.
Buffett had his chat with Nikkei while visiting Japan, where Berkshire made significant additions to its portfolio. According to Business Insider, the conglomerate increased its stakes in Japanese companies Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo, with a combined value of its positions being estimated at $14 billion.
According to Buffett, Berkshire intends to keep adding to its stakes in the future and hopes to expand the partnership in other ways.
“We don’t think it’s impossible that we will partner with them at some point in the future in a specific deal,” Buffett explained.