Taiwan Semiconductor Manufacturing Co. drew mixed bets from top investors in the first quarter, as Warren Buffett closed out his position while hedge funds Tiger Global Management and Coatue Management added new bets.
Buffett’s Berkshire Hathaway Inc. exited the stock in the first quarter, according to a filing, after the firm slashed its holding by 86% late last year. That move — which sent TSMC shares tumbling and investors spiraling — was motivated by concerns over geopolitical tensions between China and Taiwan, Buffett told investors at its annual meeting earlier this month.
His abrupt withdrawal contrasts to the moves by peers including Philippe Laffont’s Coatue Management and Chase Coleman’s Tiger Global Management, which both added TSMC shares in the first quarter, according to their latest filings. TSMC was their biggest new buy during the period.
Shares of the world’s biggest contract chipmaker have lost momentum since hitting an eight-month high in February, as weak global electronics demand, an inventory glut and geopolitical risks hurt sentiment. Investors are keenly watching for signs of recovery after the firm maintained its annual capital spending target last month, suggesting it intends to shore up its lead in advanced semiconductors.
TSMC shares rose as much as 1.7% early Tuesday in Taipei after its American Depositary Receipts closed 2.7% higher.
Buffett has otherwise continued to heap praise on the company, calling it a “fabulous enterprise” and one of the best managed and most important companies in the world. “There’s nobody in the chip industry that’s in their league,” he said at the meeting in Omaha, Nebraska. TSMC’s location was the problem, he said at the time.
Global policymakers and customers are increasingly wary of becoming too technologically reliant on Taiwan, which Beijing has claimed is part of China. TSMC is building more capacity in the US and Japan, amid pressure to produce its advanced chips abroad.
Buffett has also said he prefers deploying capital in Japan instead of Taiwan.
“I feel better about the capital that we’ve got deployed in Japan than in Taiwan,” Buffett said earlier this month. “I wish it weren’t so, but I think that’s the reality, and I re-evaluated that in the light of certain things that were going on.”
TSMC expects sales of $15.2 billion to $16 billion this quarter, a shade below the $16.1 billion analysts projected on average.
The company, like the rest of the industry, is grappling with uncertainty about electronics demand this year and beyond, amid persistent inflation and a looming recession.
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