How Investors Should React to Warren Buffett's Sale of Taiwan Semiconductor Stock

Motley Fool2023-04-17

The decision by Warren Buffett's Berkshire Hathaway to buy Taiwan Semiconductor Manufacturing, better known as TSMC, and then sell most of that stock a short time later seemed to confuse most industry...

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chaicka
2023-04-17
chaicka
Apple has alternative (though may prefer not to) for its chip manufacturing which negates direct risk with TSMC. Sounds as if analysts do not associate or at least take into consideration historical info/data. Like Buffet, I too have divested TSMC while still holding AAPL, way before news of Buffet making such a move too.
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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHow Investors Should React to Warren Buffett's Sale of Taiwan Semiconductor Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-04-17 14:39 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2023/04/16/investors-react-warren-buffett-sale-tsmc-stock/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The decision by Warren Buffett's Berkshire Hathaway to buy Taiwan Semiconductor Manufacturing, better known as TSMC, and then sell most of that stock a short time later seemed to confuse most industry...</p>\n\n<a href=\"https://www.fool.com/investing/2023/04/16/investors-react-warren-buffett-sale-tsmc-stock/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"TSM","symbol_name":"台积电","start_time":0,"source_url":"https://www.fool.com/investing/2023/04/16/investors-react-warren-buffett-sale-tsmc-stock/","article_id":"2327496282","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2327496282","pubTimestamp":1681713540,"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"Risk tolerance is a factor for both Taiwan Semiconductor's stock and the stocks of its clients.","collect":0,"end_time":0,"defaultTopTitle":"fool.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"TSM":"台积电"},"translate_title":"投资者应该如何应对巴菲特出售台积电股票","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"TSM":0.9},"content_text":"The decision by Warren Buffett's Berkshire Hathaway to buy Taiwan Semiconductor Manufacturing, better known as TSMC, and then sell most of that stock a short time later seemed to confuse most industry observers. Buffett and his company pride themselves on long-term investments, and given TSMC's lead in semiconductor manufacturing, it looked like what many would consider a \"Buffett stock.\"However, in a recent interview, Buffett said that his lieutenants bought the stock and that he decided to reverse most of that decision due to geopolitical concerns. Should Buffett's reasoning concern investors about the semiconductor industry? Let's take a closer look.The problem with selling TSMCTSMC looks like a Buffett stock, and its industry influence and essential nature make it one of the great foreign companies in which to invest. It claims nearly 60% of the world's third-party chip production, according to TrendForce. Additionally, since it produces most of its chips in Taiwan, it is the main reason why approximately two-thirds of worldwide chip production takes place on the island. It is the primary manufacturer for companies such as Qualcomm, Advanced Micro Devices, and Apple, Berkshire's largest holding.Buffett holds valid concerns about Taiwan. Geopolitical threats have intensified in recent months. If that unlikely scenario came to pass, losing most of Taiwan's production capacity holds devastating consequences for fabless chip companies.Nonetheless, the problem with Buffett's decision is that he and his team placed more than 40% of Berkshire's assets into Apple. Apple reportedly makes up over 25% of TSMC's business, so Apple and TSMC are essential to one another. Moreover, that means Berkshire already took on TSMC's geopolitical risk by owning Apple. If the geopolitical threat is such a risk, why does Berkshire hold so much Apple stock?TSMC and ChinaBuffett's assertion that a direct TSMC investment is dangerous but an indirect one is safe seems baffling. Admittedly, the geopolitical threat is possible, which is one of many reasons investors should diversify outside of the semiconductor industry.Nonetheless, Berkshire's investment in Apple and its remaining TSMC stake are probably safe, since China also depends on the company's technology. Numerous products with TSMC's chips find their way to China, meaning the country would step back technologically if events were to sever China's ties to the company.In the end, China can have Taiwan, or it can have products from TSMC's clients. However, it likely cannot have both, since TSMC's fabs would probably not survive a geopolitical threat. It may also mean that the semiconductor industry may be saving Taiwan from an attack, a benefit to investors and society alike.How investors should reactUltimately, shareholders should react by staying on a course that matches their comfort levels. Investors who feel uncomfortable with geopolitical risk should avoid TSMC. But they should probably also avoid Apple and all fabless semiconductor stocks since they likely source most or all of their manufacturing from Taiwan.Conversely, risk-tolerant investors should feel comfortable holding TSMC, Apple, or any other chip stock. They just need to remember to diversify outside of that industry. They should also never forget that positions in fabless chip companies almost always amount to indirect investments in TSMC. Such knowledge can protect shareholders if Buffett's worst fears become a reality.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9944186681,"gmtCreate":1681744334643,"gmtModify":1681744339876,"author":{"id":"4090019857770890","authorId":"4090019857770890","name":"chaicka","avatar":"https://static.tigerbbs.com/c0c291a2a7983f128cf68e5b01fedd73","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"4090019857770890","authorIdStr":"4090019857770890"},"htmlText":"Apple has alternative (though may prefer not to) for its chip manufacturing which negates direct risk with TSMC. Sounds as if analysts do not associate or at least take into consideration historical info/data. Like Buffet, I too have divested TSMC while still holding AAPL, way before news of Buffet making such a move too.","listText":"Apple has alternative (though may prefer not to) for its chip manufacturing which negates direct risk with TSMC. Sounds as if analysts do not associate or at least take into consideration historical info/data. Like Buffet, I too have divested TSMC while still holding AAPL, way before news of Buffet making such a move too.","text":"Apple has alternative (though may prefer not to) for its chip manufacturing which negates direct risk with TSMC. Sounds as if analysts do not associate or at least take into consideration historical info/data. Like Buffet, I too have divested TSMC while still holding AAPL, way before news of Buffet making such a move too.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":21,"commentSize":11,"repostSize":0,"link":"https://ttm.financial/post/9944186681","repostId":2327496282,"repostType":2,"repost":{"id":"2327496282","pubTimestamp":1681713540,"share":"https://ttm.financial/m/news/2327496282?lang=&edition=fundamental","pubTime":"2023-04-17 14:39","market":"us","language":"en","title":"How Investors Should React to Warren Buffett's Sale of Taiwan Semiconductor Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2327496282","media":"Motley Fool","summary":"Risk tolerance is a factor for both Taiwan Semiconductor's stock and the stocks of its clients.","content":"<html><head></head><body><p>The decision by Warren Buffett&#39;s <strong>Berkshire Hathaway</strong> to buy <strong>Taiwan Semiconductor Manufacturing</strong>, better known as TSMC, and then sell most of that stock a short time later seemed to confuse most industry observers. Buffett and his company pride themselves on long-term investments, and given TSMC&#39;s lead in semiconductor manufacturing, it looked like what many would consider a &#34;Buffett stock.&#34;</p><p>However, in a recent interview, Buffett said that his lieutenants bought the stock and that he decided to reverse most of that decision due to geopolitical concerns. Should Buffett&#39;s reasoning concern investors about the semiconductor industry? Let&#39;s take a closer look.</p><h2>The problem with selling TSMC</h2><p>TSMC looks like a Buffett stock, and its industry influence and essential nature make it one of the great foreign companies in which to invest. It claims nearly 60% of the world&#39;s third-party chip production, according to TrendForce. Additionally, since it produces most of its chips in Taiwan, it is the main reason why approximately two-thirds of worldwide chip production takes place on the island. It is the primary manufacturer for companies such as <strong>Qualcomm</strong>, <strong>Advanced Micro Devices</strong>, and <strong>Apple</strong>, Berkshire&#39;s largest holding.</p><p>Buffett holds valid concerns about Taiwan. Geopolitical threats have intensified in recent months. If that unlikely scenario came to pass, losing most of Taiwan&#39;s production capacity holds devastating consequences for fabless chip companies.</p><p>Nonetheless, the problem with Buffett&#39;s decision is that he and his team placed more than 40% of Berkshire&#39;s assets into Apple. Apple reportedly makes up over 25% of TSMC&#39;s business, so Apple and TSMC are essential to one another. Moreover, that means Berkshire already took on TSMC&#39;s geopolitical risk by owning Apple. If the geopolitical threat is such a risk, why does Berkshire hold so much Apple stock?</p><h2>TSMC and China</h2><p>Buffett&#39;s assertion that a direct TSMC investment is dangerous but an indirect one is safe seems baffling. Admittedly, the geopolitical threat is possible, which is one of many reasons investors should diversify outside of the semiconductor industry.</p><p>Nonetheless, Berkshire&#39;s investment in Apple and its remaining TSMC stake are probably safe, since China also depends on the company&#39;s technology. Numerous products with TSMC&#39;s chips find their way to China, meaning the country would step back technologically if events were to sever China&#39;s ties to the company.</p><p>In the end, China can have Taiwan, or it can have products from TSMC&#39;s clients. However, it likely cannot have both, since TSMC&#39;s fabs would probably not survive a geopolitical threat. It may also mean that the semiconductor industry may be <em>saving </em>Taiwan from an attack, a benefit to investors and society alike.</p><h2>How investors should react</h2><p>Ultimately, shareholders should react by staying on a course that matches their comfort levels. Investors who feel uncomfortable with geopolitical risk should avoid TSMC. But they should probably also avoid Apple and all fabless semiconductor stocks since they likely source most or all of their manufacturing from Taiwan.</p><p>Conversely, risk-tolerant investors should feel comfortable holding TSMC, Apple, or any other chip stock. They just need to remember to diversify outside of that industry. They should also never forget that positions in fabless chip companies almost always amount to indirect investments in TSMC. Such knowledge can protect shareholders if Buffett&#39;s worst fears become a reality.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>How Investors Should React to Warren Buffett's Sale of Taiwan Semiconductor Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHow Investors Should React to Warren Buffett's Sale of Taiwan Semiconductor Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-04-17 14:39 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2023/04/16/investors-react-warren-buffett-sale-tsmc-stock/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The decision by Warren Buffett's Berkshire Hathaway to buy Taiwan Semiconductor Manufacturing, better known as TSMC, and then sell most of that stock a short time later seemed to confuse most industry...</p>\n\n<a href=\"https://www.fool.com/investing/2023/04/16/investors-react-warren-buffett-sale-tsmc-stock/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"TSM":"台积电"},"source_url":"https://www.fool.com/investing/2023/04/16/investors-react-warren-buffett-sale-tsmc-stock/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2327496282","content_text":"The decision by Warren Buffett's Berkshire Hathaway to buy Taiwan Semiconductor Manufacturing, better known as TSMC, and then sell most of that stock a short time later seemed to confuse most industry observers. Buffett and his company pride themselves on long-term investments, and given TSMC's lead in semiconductor manufacturing, it looked like what many would consider a \"Buffett stock.\"However, in a recent interview, Buffett said that his lieutenants bought the stock and that he decided to reverse most of that decision due to geopolitical concerns. Should Buffett's reasoning concern investors about the semiconductor industry? Let's take a closer look.The problem with selling TSMCTSMC looks like a Buffett stock, and its industry influence and essential nature make it one of the great foreign companies in which to invest. It claims nearly 60% of the world's third-party chip production, according to TrendForce. Additionally, since it produces most of its chips in Taiwan, it is the main reason why approximately two-thirds of worldwide chip production takes place on the island. It is the primary manufacturer for companies such as Qualcomm, Advanced Micro Devices, and Apple, Berkshire's largest holding.Buffett holds valid concerns about Taiwan. Geopolitical threats have intensified in recent months. If that unlikely scenario came to pass, losing most of Taiwan's production capacity holds devastating consequences for fabless chip companies.Nonetheless, the problem with Buffett's decision is that he and his team placed more than 40% of Berkshire's assets into Apple. Apple reportedly makes up over 25% of TSMC's business, so Apple and TSMC are essential to one another. Moreover, that means Berkshire already took on TSMC's geopolitical risk by owning Apple. If the geopolitical threat is such a risk, why does Berkshire hold so much Apple stock?TSMC and ChinaBuffett's assertion that a direct TSMC investment is dangerous but an indirect one is safe seems baffling. Admittedly, the geopolitical threat is possible, which is one of many reasons investors should diversify outside of the semiconductor industry.Nonetheless, Berkshire's investment in Apple and its remaining TSMC stake are probably safe, since China also depends on the company's technology. Numerous products with TSMC's chips find their way to China, meaning the country would step back technologically if events were to sever China's ties to the company.In the end, China can have Taiwan, or it can have products from TSMC's clients. However, it likely cannot have both, since TSMC's fabs would probably not survive a geopolitical threat. It may also mean that the semiconductor industry may be saving Taiwan from an attack, a benefit to investors and society alike.How investors should reactUltimately, shareholders should react by staying on a course that matches their comfort levels. Investors who feel uncomfortable with geopolitical risk should avoid TSMC. But they should probably also avoid Apple and all fabless semiconductor stocks since they likely source most or all of their manufacturing from Taiwan.Conversely, risk-tolerant investors should feel comfortable holding TSMC, Apple, or any other chip stock. They just need to remember to diversify outside of that industry. They should also never forget that positions in fabless chip companies almost always amount to indirect investments in TSMC. Such knowledge can protect shareholders if Buffett's worst fears become a reality.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":106320581,"gmtCreate":1681767105099,"gmtModify":1681767111870,"authorId":4097696706204670,"author":{"id":4097696706204670,"idStr":"4097696706204670","authorId":4097696706204670,"name":"pie888","avatar":"https://static.tigerbbs.com/387829d822b10217dd44a2535e0cd7b0","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9944186681,"type":1,"supId":0,"prevId":0,"content":"<u>ok</u>","text":"<u>ok</u>","html":"<u>ok</u>"},{"id":106320575,"gmtCreate":1681766962703,"gmtModify":1681766966100,"authorId":4091333104236980,"author":{"id":4091333104236980,"idStr":"4091333104236980","authorId":4091333104236980,"name":"WongThiha","avatar":"https://static.tigerbbs.com/d6de19ec599190df2baa84436081e71f","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9944186681,"type":1,"supId":0,"prevId":0,"content":"<u>ok</u>","text":"<u>ok</u>","html":"<u>ok</u>"},{"id":106320564,"gmtCreate":1681766661473,"gmtModify":1681766674020,"authorId":4094220052101940,"author":{"id":4094220052101940,"idStr":"4094220052101940","authorId":4094220052101940,"name":"Eukriz","avatar":"https://static.tigerbbs.com/9947519c064f172221a5a5820008cfc8","vip":1,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9944186681,"type":1,"supId":0,"prevId":0,"content":"<u>ok</u>","text":"<u>ok</u>","html":"<u>ok</u>"},{"id":106320557,"gmtCreate":1681766595228,"gmtModify":1681766598608,"authorId":4091812603387580,"author":{"id":4091812603387580,"idStr":"4091812603387580","authorId":4091812603387580,"name":"依然飞飞","avatar":"https://static.tigerbbs.com/78da4bafebf1408f0d799eea86856520","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9944186681,"type":1,"supId":0,"prevId":0,"content":"<u>ok</u>","text":"<u>ok</u>","html":"<u>ok</u>"},{"id":106320555,"gmtCreate":1681766585301,"gmtModify":1681766597989,"authorId":3578903100181699,"author":{"id":3578903100181699,"idStr":"3578903100181699","authorId":3578903100181699,"name":"Lamborghini1","avatar":"https://static.tigerbbs.com/f8b24a649554234324e1e33be42fc25f","vip":1,"currentWearingBadge":{"badgeId":"a83d7582f45846ffbccbce770ce65d84-1","templateUuid":"a83d7582f45846ffbccbce770ce65d84","name":"Real Trader","description":"Completed a transaction","bigImgUrl":"https://static.tigerbbs.com/2e08a1cc2087a1de93402c2c290fa65b","smallImgUrl":"https://static.tigerbbs.com/4504a6397ce1137932d56e5f4ce27166","grayImgUrl":"https://static.tigerbbs.com/4b22c79415b4cd6e3d8ebc4a0fa32604","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2021.12.21","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1100},"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":9944186681,"type":1,"supId":0,"prevId":0,"content":"👍","text":"👍","html":"👍"}],"langContent":"EN"},{"id":9944357441,"gmtCreate":1681721459083,"gmtModify":1681721461914,"author":{"id":"3575544575320394","authorId":"3575544575320394","name":"来人","avatar":"https://static.tigerbbs.com/0af89587decbb8a1d3e1596adc29cb98","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"3575544575320394","authorIdStr":"3575544575320394"},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9944357441","repostId":2327496282,"repostType":4,"repost":{"id":"2327496282","pubTimestamp":1681713540,"share":"https://ttm.financial/m/news/2327496282?lang=&edition=fundamental","pubTime":"2023-04-17 14:39","market":"us","language":"en","title":"How Investors Should React to Warren Buffett's Sale of Taiwan Semiconductor Stock","url":"https://stock-news.laohu8.com/highlight/detail?id=2327496282","media":"Motley Fool","summary":"Risk tolerance is a factor for both Taiwan Semiconductor's stock and the stocks of its clients.","content":"<html><head></head><body><p>The decision by Warren Buffett&#39;s <strong>Berkshire Hathaway</strong> to buy <strong>Taiwan Semiconductor Manufacturing</strong>, better known as TSMC, and then sell most of that stock a short time later seemed to confuse most industry observers. Buffett and his company pride themselves on long-term investments, and given TSMC&#39;s lead in semiconductor manufacturing, it looked like what many would consider a &#34;Buffett stock.&#34;</p><p>However, in a recent interview, Buffett said that his lieutenants bought the stock and that he decided to reverse most of that decision due to geopolitical concerns. Should Buffett&#39;s reasoning concern investors about the semiconductor industry? Let&#39;s take a closer look.</p><h2>The problem with selling TSMC</h2><p>TSMC looks like a Buffett stock, and its industry influence and essential nature make it one of the great foreign companies in which to invest. It claims nearly 60% of the world&#39;s third-party chip production, according to TrendForce. Additionally, since it produces most of its chips in Taiwan, it is the main reason why approximately two-thirds of worldwide chip production takes place on the island. It is the primary manufacturer for companies such as <strong>Qualcomm</strong>, <strong>Advanced Micro Devices</strong>, and <strong>Apple</strong>, Berkshire&#39;s largest holding.</p><p>Buffett holds valid concerns about Taiwan. Geopolitical threats have intensified in recent months. If that unlikely scenario came to pass, losing most of Taiwan&#39;s production capacity holds devastating consequences for fabless chip companies.</p><p>Nonetheless, the problem with Buffett&#39;s decision is that he and his team placed more than 40% of Berkshire&#39;s assets into Apple. Apple reportedly makes up over 25% of TSMC&#39;s business, so Apple and TSMC are essential to one another. Moreover, that means Berkshire already took on TSMC&#39;s geopolitical risk by owning Apple. If the geopolitical threat is such a risk, why does Berkshire hold so much Apple stock?</p><h2>TSMC and China</h2><p>Buffett&#39;s assertion that a direct TSMC investment is dangerous but an indirect one is safe seems baffling. Admittedly, the geopolitical threat is possible, which is one of many reasons investors should diversify outside of the semiconductor industry.</p><p>Nonetheless, Berkshire&#39;s investment in Apple and its remaining TSMC stake are probably safe, since China also depends on the company&#39;s technology. Numerous products with TSMC&#39;s chips find their way to China, meaning the country would step back technologically if events were to sever China&#39;s ties to the company.</p><p>In the end, China can have Taiwan, or it can have products from TSMC&#39;s clients. However, it likely cannot have both, since TSMC&#39;s fabs would probably not survive a geopolitical threat. It may also mean that the semiconductor industry may be <em>saving </em>Taiwan from an attack, a benefit to investors and society alike.</p><h2>How investors should react</h2><p>Ultimately, shareholders should react by staying on a course that matches their comfort levels. Investors who feel uncomfortable with geopolitical risk should avoid TSMC. But they should probably also avoid Apple and all fabless semiconductor stocks since they likely source most or all of their manufacturing from Taiwan.</p><p>Conversely, risk-tolerant investors should feel comfortable holding TSMC, Apple, or any other chip stock. They just need to remember to diversify outside of that industry. They should also never forget that positions in fabless chip companies almost always amount to indirect investments in TSMC. Such knowledge can protect shareholders if Buffett&#39;s worst fears become a reality.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>How Investors Should React to Warren Buffett's Sale of Taiwan Semiconductor Stock</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHow Investors Should React to Warren Buffett's Sale of Taiwan Semiconductor Stock\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-04-17 14:39 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2023/04/16/investors-react-warren-buffett-sale-tsmc-stock/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The decision by Warren Buffett's Berkshire Hathaway to buy Taiwan Semiconductor Manufacturing, better known as TSMC, and then sell most of that stock a short time later seemed to confuse most industry...</p>\n\n<a href=\"https://www.fool.com/investing/2023/04/16/investors-react-warren-buffett-sale-tsmc-stock/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"TSM":"台积电"},"source_url":"https://www.fool.com/investing/2023/04/16/investors-react-warren-buffett-sale-tsmc-stock/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2327496282","content_text":"The decision by Warren Buffett's Berkshire Hathaway to buy Taiwan Semiconductor Manufacturing, better known as TSMC, and then sell most of that stock a short time later seemed to confuse most industry observers. Buffett and his company pride themselves on long-term investments, and given TSMC's lead in semiconductor manufacturing, it looked like what many would consider a \"Buffett stock.\"However, in a recent interview, Buffett said that his lieutenants bought the stock and that he decided to reverse most of that decision due to geopolitical concerns. Should Buffett's reasoning concern investors about the semiconductor industry? Let's take a closer look.The problem with selling TSMCTSMC looks like a Buffett stock, and its industry influence and essential nature make it one of the great foreign companies in which to invest. It claims nearly 60% of the world's third-party chip production, according to TrendForce. Additionally, since it produces most of its chips in Taiwan, it is the main reason why approximately two-thirds of worldwide chip production takes place on the island. It is the primary manufacturer for companies such as Qualcomm, Advanced Micro Devices, and Apple, Berkshire's largest holding.Buffett holds valid concerns about Taiwan. Geopolitical threats have intensified in recent months. If that unlikely scenario came to pass, losing most of Taiwan's production capacity holds devastating consequences for fabless chip companies.Nonetheless, the problem with Buffett's decision is that he and his team placed more than 40% of Berkshire's assets into Apple. Apple reportedly makes up over 25% of TSMC's business, so Apple and TSMC are essential to one another. Moreover, that means Berkshire already took on TSMC's geopolitical risk by owning Apple. If the geopolitical threat is such a risk, why does Berkshire hold so much Apple stock?TSMC and ChinaBuffett's assertion that a direct TSMC investment is dangerous but an indirect one is safe seems baffling. Admittedly, the geopolitical threat is possible, which is one of many reasons investors should diversify outside of the semiconductor industry.Nonetheless, Berkshire's investment in Apple and its remaining TSMC stake are probably safe, since China also depends on the company's technology. Numerous products with TSMC's chips find their way to China, meaning the country would step back technologically if events were to sever China's ties to the company.In the end, China can have Taiwan, or it can have products from TSMC's clients. However, it likely cannot have both, since TSMC's fabs would probably not survive a geopolitical threat. It may also mean that the semiconductor industry may be saving Taiwan from an attack, a benefit to investors and society alike.How investors should reactUltimately, shareholders should react by staying on a course that matches their comfort levels. Investors who feel uncomfortable with geopolitical risk should avoid TSMC. But they should probably also avoid Apple and all fabless semiconductor stocks since they likely source most or all of their manufacturing from Taiwan.Conversely, risk-tolerant investors should feel comfortable holding TSMC, Apple, or any other chip stock. They just need to remember to diversify outside of that industry. They should also never forget that positions in fabless chip companies almost always amount to indirect investments in TSMC. Such knowledge can protect shareholders if Buffett's worst fears become a reality.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":16,"commentSize":2,"repostSize":2,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2327496282"}