TSM stock (NYSE:TSM) went up a little at the start of trading on Tuesday, even though the multinational foundry giant said that sales for the month of December went down by 13.5%.
NT$192.56 billion, or $6.32 billion, was the net revenue for December, down 13.5% from November but up 23.9% from the previous year. The company also reported a 42.6% increase in revenue from January through December, at NT$2,263.89B.
For some of the biggest technology companies in the world, such as Apple, AMD, Nvidia, and others, Taiwan Semiconductor manufactures semiconductors. On January 12, the business is expected to release its full fourth-quarter results. Last month, Taiwan Semiconductor (NYSE:TSM) started making its 3-nanometer chips, saying demand is “extremely robust.”
TSM Stock a Buffet Favorite
Getting a stake in Taiwan Semiconductor Manufacturing Company (NYSE:TSM) at 0.80% was the holding company’s most important purchase during the third quarter. Since 2012, when it sold a small stake in Intel, Berkshire hasn’t really done much in the pure-play semiconductor market. Furthermore, it’s noteworthy that Buffett’s business didn’t exactly tread carefully when purchasing TSM stock.
With its roughly $4.1 billion acquisition of TSMC shares in the third quarter, Berkshire made the market leader in chip production its 10th-largest investment overall. Why has Buffett’s business suddenly become enthusiastic about the venerable Taiwanese chip company?
One is that TSMC has a magnificent moat. The organization has practically unequaled chip fabrication capabilities and technologies. More than 90% of the world’s high-end semiconductors are produced by TSMC, which holds a market share of around 55% in the contract chip fabrication sector.
Even one of TSMC’s biggest rivals in the fabrication industry, Intel, depends on the Taiwanese business for a portion of its manufacturing requirements. Because TSMC is the leader in the market for high-performance semiconductors, which will only become more important for the tech industry and the world economy as a whole, the company is in a good position to make a lot of money from making chips.
Given TSMC’s numerous competitive advantages and a strong set of long-term industry tailwinds, it’s not surprising that Berkshire Hathaway initiated a large position in the chipmaker’s stock. Importantly, the expertise in semiconductor fabrication has seemed appealing from a pricing perspective.
Featured Image: Megapixl @ Andreistanescu