TSMC shares surged after Warren Buffett’s company bought a $4 trillion stake


New Delhi
CNN business

Shares of Taiwan Semiconductor Manufacturing Company rose on Tuesday after Warren Buffett’s Berkshire Hathaway announced it had bought a $4.1 billion stake in one of the world’s largest chipmakers.

In a filing with the U.S. Securities and Exchange Commission on Monday, Berkshire Hathaway ( BRKA ) said it acquired about 60 million shares of American depositary TSMC ( TSM ) in the three months ended September.

Shares of TSMC rose more than 8% in Taiwan on Tuesday.

“TSMC welcomes all investors who are inclined to buy and hold TSMC shares,” said a spokesman for the chip maker.

TSMC accounts for 90% of the world’s super-advanced computer chips, supplying tech giants including Apple ( AAPL ) and Qualcomm ( QCOM ).

Berkshire’s purchase of a stake in the Taiwanese chip giant comes as tensions rise between China and the self-governing democratic island.

Taiwan has faced increasing military aggression from Beijing in recent months, which has made clear the critical role it plays in the global chip industry.

Super-advanced semiconductor chips – like those produced by TSMC – are difficult to make because of the high cost of development and the level of know-how required, meaning much of the production is concentrated in a few suppliers.

The company – referred to in Taiwan as its “sacred mountain” – is so important to the island that its employees can apply to be exempted from military reserve training, the Defense Ministry said.

Tensions between Washington and Beijing have also been rising recently over chips, with President Joe Biden imposing a wide-ranging set of controls on the sale of advanced chips and chip-making equipment to Chinese companies. Experts fear these controls could push the technological arms race between the United States and China to a new level.

Berkshire has major stakes in Apple, Bank of America, Coca-Cola, Chevron and American Express.

— Eric Cheung contributed to this report.