Following the revelation that Warren Buffett’s Berkshire Hathaway sold billions of dollars of TSMC stock within months of purchasing it, former Vice President Al Gore’s investment firm Generation Investment Management has followed suit. According to the firm’s filings from last week, it has also sold its TSMC stake, but unlike Buffett, who chose to keep some shares, Generation Investment has completely exited the position.
Prior to its SEC filings, the company also published its quarterly investor letter, in which it raised concerns about geopolitical tensions in the Taiwan Strait and the vulnerability of the semiconductor supply chain, without mentioning the reasons for the disposal.
TSMC has established itself as one of the world’s most important technology companies in recent years, particularly as its partnership with Apple has grown. It is the world’s largest contract chip manufacturer, supplying critical chip products to industry titans such as Apple, AMD, QUALCOMM, and NVIDIA. TSMC is also a technology leader in the industry, with its 3-nanometer chipmaking process being one of the most advanced currently in mass production.
The chip industry is yet to digest its excess inventories from 2022 along with reduced demand has cast a cloud over TSMC and other semiconductor companies.
This is complicated further by the firm’s precarious location, with all of its advanced facilities based in Taiwan. During the fourth quarter of 2022, Al Gore’s Generation Investment Management sold its $22 million stake in TSMC.
The investment firm has long been an investor in TSMC, with filings dating back to 2016 indicating an investment in the chipmaker. The $22 million figure reflected Generation Investment’s ownership of more than 300,000 TSMC American depository receipts as of the third quarter of 2022.
Looking at TSMC’s returns over the last five years, it’s likely that Generation Investment simply decided it was time to exit the stock and rebalance the portfolio, especially given that most chip industry analysts believe the first half of this year will see a bottom due to macroeconomic conditions and an industry slowdown.
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