In February of this 2023, Warren Buffett had set alarm bells ringing in Taiwan as his company sold 86 % of shares in Taiwan Semiconductor Manufacturing Company(TSMC), worrying many geopolitical analysts about the future of the island. Just three months later, the tycoon divested his entire stake in the semiconductor company, also known as microchips.
Buffett, one of the world's richest men, makes his investments through Berkshire Hathaway (BRKA), which announced Monday that it no longer held a stake in TSMC. This exodus began in February, when it revealed that it had sold 86% of the shares it held, acquired for US$4.1 billion just a few months earlier. This move was somewhat strange, as Buffett usually makes long-term investments.
When asked about it, he indirectly pointed to the geopolitical situation of the country governed by Tsai Ing-Wen. "I don't like its location, and I have reevaluated it," he said in the context of growing concern about a possible Chinese invasion. "I feel better about the capital we have deployed in Japan than in Taiwan. I wish it wasn't sold, but I think it's a reality," he added.
Despite this sale, Buffett praised TMSC as"one of the best managed and [más] important companies in the world." Headquartered on the island, it is the world's most valuable semiconductor company and is owned by foreign investors. It supplies its product to global technology giants, including Apple and Qualcomm.
In the face of Buffett's move, TSMC shares rose 2 percent on Tuesday in Taipei, while U.S.-listed shares fell 0.5 percent.
Microchips, the "oil of the 21st century".
A microchip is a small electronic device that gives life to many electronic devices, which is why some see this element almost as the oxygen of modern societies, where almost everything is crossed by technology. They are used to assemble many products, from washing machines to cell phones.
"There are currently only three major companies that excel in chip manufacturing; TSMC located in Taiwan, Samsung in South Korea and Intel in the United States. But these manufacturers in turn depend on a Dutch company called ASML, which is the sole manufacturer of the most advanced equipment used by these companies," the YouTube channel Economía y Desarrollo explained.
"Modern microchips are now embedded in everything; from televisions to fighter jets to nuclear weapons. Therefore, semiconductors are the new oil of the 21st century. But the main source of this new oil is not in the Persian Gulf, but in Taiwan, an island claimed by China as part of its territory and considered a strategic ally of the United States," he added.
