News Warren Buffett Dumps 86% of TSMC Shares

[Admin]

Berkshire Hathaway sells off TSMC stock, increases position in Apple.

Warren Buffett Dumps 86% of TSMC Shares : Read more

 

[Rokinamerica]

Screw EF Hutton, when Warren moves, I move.

 

[husker]

If the reason was a potential invasion of Taiwan by China, then wouldn't Apple stock have a good chance of plummeting as well? Potential sanctions could severely disrupt Apple's manufacturing in China, given that the U.S. is currently a sworn protector of Taiwan.

 

[InvalidError]

If the reason was a potential invasion of Taiwan by China, then wouldn't Apple stock have a good chance of plummeting as well?

Many manufacturers have been in the process of migrating large chunks of their manufacturing out of China to avoid tariffs. Some foreign companies like Samsung that had manufacturing operations in China are moving out because China is refusing to renew their leases or approve expansions.

Sanctions against China may not hurt too badly, depending on how far along companies are on their Chexit strategy.

 

[Dantte]

Many manufacturers have been in the process of migrating large chunks of their manufacturing out of China to avoid tariffs. Some foreign companies like Samsung that had manufacturing operations in China are moving out because China is refusing to renew their leases or approve expansions.

Sanctions against China may not hurt too badly, depending on how far along companies are on their Chexit strategy.

You might be thinking of another manufacturer, but Samsung closed its last Chinese based plant in 2019, most of their tech is now made in Mexico or Vietnam.

Lot of the early moves out of China were for tariffs, which Apple really didnt care because they have a cult-like following, people are paying $1500+ for a phone and dont care about the tariff increases. Then moves increase in '20-'21 due to COVID and supply restrictions, and today the moves out of China are increasing due to government sanctions and looming war which no one is immune to and I believe is the #1 underlying issue to the stock sell-off. If I had anything invested in China, I'd be pulling it ASAP, things arent going to get any better, but much much worse!

 

[tooltalk]

If the reason was a potential invasion of Taiwan by China, then wouldn't Apple stock have a good chance of plummeting as well? Potential sanctions could severely disrupt Apple's manufacturing in China, given that the U.S. is currently a sworn protector of Taiwan.

Yep, that explanation makes no sense. Apple's put everything in one basket, China, and if there is any geopolitical escalation, Apple is toast. Further, unlike Qualcomm, all of Apple's chips are also made by TSMC in Taiwan -- Apple is TSMC's largest customer -- Apple sales accounts for as much as 30% of TSMC sales.

 

[tooltalk]

Many manufacturers have been in the process of migrating large chunks of their manufacturing out of China to avoid tariffs. Some foreign companies like Samsung that had manufacturing operations in China are moving out because China is refusing to renew their leases or approve expansions.

Sanctions against China may not hurt too badly, depending on how far along companies are on their Chexit strategy.

As pointed out by others, Samsung has been pulling out of China for almost a decade -- they closed the last smartphone factory in 2019 and they are still in process closing last few remaining business units, eg, shipbuilding/heavy industry in Ningbo, China.

Samsung (and SK Hynix, Micron, and even Intel who recently sold their Chinese NAND business to SK) does have a NAND production in Xi'an, opened not too long ago, but it would be extremely costly for both Samsung and the Xi'an's local gov't to close that now. Samsung $18+B NAND plant has enormous impact on local economy, so it doesn't make any sense for Chinese gov't to harasse them with permits. The problem is with the Biden's chip ban against China -- Samsung received a one-year reprieve from Biden's recent export restriction on chip-making equipment, but beyond that we don't know what their fate is.

 

[digitalgriffin]

Bought November
Sold February

That's the first "oops" I've seen from the oracle of Omaha . But the knew the writing was on the wall last March. Covid ending. Everyone upgraded. Massive inflation. Discretionary spending money gone.

 

[digitalgriffin]

If the reason was a potential invasion of Taiwan by China, then wouldn't Apple stock have a good chance of plummeting as well? Potential sanctions could severely disrupt Apple's manufacturing in China, given that the U.S. is currently a sworn protector of Taiwan.

And foxconn being the primary assembler.

 

[SydB]

That's the first "oops" I've seen from the oracle of Omaha

According to https://www.theregister.com/2023/02/15/warren_buffet_cashes_out_of/ he looks to have made several hundred million over a few months on that investment. I wish I could make a few 'oops' like that ;-)

 

[TJ Hooker]

Bought November
Sold February

That's the first "oops" I've seen from the oracle of Omaha . But the knew the writing was on the wall last March. Covid ending. Everyone upgraded. Massive inflation. Discretionary spending money gone.

TSMC price is up ~10% since November, where's the "oops"?

 

[UWguy]

Thought about this whole invasion thing awhile ago. AMD stock would also tank while Intel would skyrocket.

Me thinks it’s a good time to buy Intel.

 

[digitalgriffin]

Thought about this whole invasion thing awhile ago. AMD stock would also tank while Intel would skyrocket.

Me thinks it’s a good time to buy Intel.

Taiwan invasion won't happen any time soon. Xiaoping had made himself ruler for life by removing term limits. He doesn't need the attention and problems of a drawn out war.

While capturing Taiwan is still a long term objective by China, right now it's a stalemate. It would be extremely costly by both sides. China would only push it's point if it thinks it would damage the USA militarily. And by that point we would already be in a war. Otherwise, economically it would be a disaster for China and USA.

Still the same, any smart business should be removing their assets from China and moving them to the adjoining countries. (Ie: Korea, Vietnam, Japan and India). I know Japan can really use the boost right now. They are buying their own currency to keep it from going through the floor.

 

[wbfox]

A funny thing happens when you start looking into the background of many of Taiwan's industrial elite such as Mr. Chang. Funny thing, gratitude, eh? Here's to his long health, that he may see all the future has to hold for his island.

 

[Geef]

TSMC has been building itself up in the USA for a while now. Seems like they've been working on a backup in case.

 

[digitalgriffin]

TSMC has been building itself up in the USA for a while now. Seems like they've been working on a backup in case.

They are intentionally keeping their most advanced nodes in Taiwan. I think that's a bit foolish on their part as TSMC is the crown jewel of Taiwan and a very tempting target for a tech starved China who has advanced node issues and a tech embargo. But it is what it is. Can't make them see the light if they don't want to

 

[bit_user]

Buffett is famous for his contrarian investing style. That almost makes it seem strange when he seems to go with the flow.

 

[bit_user]

Thought about this whole invasion thing awhile ago. AMD stock would also tank while Intel would skyrocket.

They appear to be making tentative moves towards hedging their dependence on TSMC, as well.

https://www.tomshardware.com/news/amd-outsouces-older-chips-to-globalfoundries-samsung

That sounds like dipping a toe in the water, but it could lead to bigger moves. Especially depending on how well Samsung progresses in its new nodes.

 

[bit_user]

I know Japan can really use the boost right now. They are buying their own currency to keep it from going through the floor.

I think Japan also has labor shortages, after years of negative population growth.

A funny thing happens when you start looking into the background of many of Taiwan's industrial elite such as Mr. Chang.

I don't think we care about the elites, but rather its people and its economic & political independence.

TSMC has been building itself up in the USA for a while now. Seems like they've been working on a backup in case.

They've indicated they plan to keep overseas fabs at least 1 node behind. Also, I think the majority of their production capacity remains in Taiwan. There's no way that Taiwan going offline wouldn't be disastrous for the global economy (not just the tech industry, since so many products now contain tech and so many businesses are now dependent on it).

 

[bit_user]

They are intentionally keeping their most advanced nodes in Taiwan. I think that's a bit foolish on their part as TSMC is the crown jewel of Taiwan and a very tempting target for a tech starved China who has advanced node issues and a tech embargo. But it is what it is. Can't make them see the light if they don't want to.

Huh? If TSMC moved all their operations outside of Taiwan, the rest of the world would suddenly have a lot less reason to care what happened to it.

As for keeping their leading tech in Taiwan, considering how far behind China is, it doesn't matter if Taiwan is the only place with the best nodes or not. I think it's no less tempting to China.

 

[tooltalk]

TSMC price is up ~10% since November, where's the "oops"?

Buffet's TSMC purchases were made & cumulated during 3Q whe the stock price was in $73-$95 range. TSMC stock plummetted to $62 in 4Q ($62-$80) -- Buffet probably panicked and dumped 85% of them as soon as breaking even, to the grace of AAPL,

 

[digitalgriffin]

Huh? If TSMC moved all their operations outside of Taiwan, the rest of the world would suddenly have a lot less reason to care what happened to it.

As for keeping their leading tech in Taiwan, considering how far behind China is, it doesn't matter if Taiwan is the only place with the best nodes or not. I think it's no less tempting to China.

Well TSMC requires outside supplies and components to keep operating. But the trade secrets are invaluable just the same. So yes, it's still a very tempting target.

Still the same if the world economies are dependent on the latest nodes, and you control those nodes, then you get to dictate some of the concessions. If TSMC made the most advanced components in say Mexico or Arizona then TSMC and the world can give the invading country the middle finger because world clients still have the supply they need. Thus Taiwan's strategic importance becomes less because what's on Taiwan has less leverage. I mean are you going through rob the Smithsonian when the Hope Diamond isn't there?

But Taiwan's secondary importance is it's a strategic military point for both US and Chinese Navies. This knowledge is commonly available.

 

[bit_user]

Well TSMC requires outside supplies and components to keep operating.

I'm sure China is working on developing supply chains for its domestic fab industry. Surely, the standards are higher for TSMC, but maybe TSMC wouldn't take as long to get back online as you think.

Still the same if the world economies are dependent on the latest nodes, and you control those nodes, then you get to dictate some of the concessions.

They don't just want to maintain some leverage. Taiwan wants maximum leverage against China invading. It's an existential threat, to them. It's the worst-case scenario. They don't care what else happens, if that does.

If TSMC made the most advanced components in say Mexico or Arizona then TSMC and the world can give the invading country the middle finger because world clients still have the supply they need. Thus Taiwan's strategic importance becomes less because what's on Taiwan has less leverage. I mean are you going through rob the Smithsonian when the Hope Diamond isn't there?

This is silly. You're saying that Taiwan should make itself less critical to the rest of the world, so that China can't use it as a bargaining chip after an invasion? Taiwan doesn't care about what happens after an invasion, because it all seems bad for them. And so much of the world's production and supply chains are either still in China, or have been bought up by China (see: Africa) that China already has incredible leverage against The West cutting it off.

But Taiwan's secondary importance is it's a strategic military point for both US and Chinese Navies. This knowledge is commonly available

Less and less, as China has become more assertive in the South China Sea. They can already blockade Taiwan at will, and even did so last fall.

 

[ex_bubblehead]

And now it's time to close this.