Amidst high inflation rates and the possibility of a recession, Berkshire Hathaway owned by Warren Buffett has invested nearly 4.1 billion dollars in Taiwan Semiconductor Manufacturing Company. TSMC founded in 1987 by Morris Chang is the largest semiconductor chip manufacturer in the world.
The details regarding share purchase were disclosed by Berkshire Hathaway in its recent filings to the United States Securities and Exchange Commission. The filings state that the multinational investment company has purchased about 60 million American depository shares of TSMC (TSM) in the three months that ended September.
The investment of Berkshire Hathaway in Taiwan Semiconductor Manufacturing Company comes at a crucial time when tensions between China and Taiwan are at their peak. China which is the second-largest economy in the world claims that Taiwan is an integral part of mainland china. While Taiwan continues to work itself as a self-governed democratic state.
Tensions reached their peak a few months ago when Nancy Pelosi, Speaker of the US Congress, visited Taiwan challenging the claims of China that the country was part of it. As a response, China began a lengthy military drill around Taiwanese islands involving planes, aircraft carriers, and helicopters.
Taiwan Semiconductor Manufacturing Company is considered a highly important asset by the Taiwanese movement as 90 percent of the world’s super-advanced computer chips. It also supplies computer chips to tech giants based in America such as Apple and Qualcomm.
The United States of America and its western allies who support Taiwan financially and militarily are concerned that the invasion of Taiwan by China might result in TSMC falling into the hands of the red giant. As chips are vital for nearly all electronic pieces of equipment, companies that own the majority of their production and supply are highly influential in the tech world. It is also essential to note that computer chips are not easy to manufacture like other electronic equipment due to the high cost of setting up the plant. The technology as to how to produce the chips is also highly advanced and is only known to some players in the market.
Tensions between Washington and Beijing have also been rising lately over chips, with President Joe Biden imposing a sweeping set of controls on the sale of advanced chips and chip-making equipment to Chinese firms. Experts fear that these controls could shift the tech arms race between the United States and China to a whole new level.
