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Warren Buffett's Berkshire Hathaway sells majority stake in TSMC, causing 6% drop in shares

On an early Wednesday morning, the shares of TSMC plummeted by 6% following the news that Warren Buffett's Berkshire Hathaway had sold the majority of its stake in the Taiwanese chipmaker's stock. The sale, which constituted about 86% of the firm's position, was disclosed in the fourth-quarter 13F filings the previous night.
 

This sudden move was unexpected, especially given that Buffett's company usually holds onto investments for years. In fact, Berkshire Hathaway had only revealed its $4.1 billion stake in TSMC on November 14, and the company had already reduced its position to about $618 million in just a few months.
 
Berkshire Hathaway's decision to sell its shares came after the stock had already climbed around 18% from when it was first purchased. By the middle of 2022, chipmakers across the board had been reducing production to deal with oversupply issues. Despite this, TSMC seemed to have benefited from the artificial intelligence boom that had propelled other chip-makers like Nvidia and little-known tech companies higher. The launch of OpenAI's language tool, ChatGPT, in November had sparked massive investor interest, and TSMC stock had enjoyed an almost 30% rally at the start of 2023.
 
However, TSMC's rosy outlook took a hit last month when it forecasted that its revenue could fall by as much as 5% in the current quarter, and that it could face more weak demand. Nonetheless, this week, the company's board approved a capital injection of up to $3.5 billion into its Arizona unit.
 
At the end of 2022, Berkshire Hathaway made several other changes to its stock portfolio. In addition to reducing its stake in TSMC, it also did so with US Bancorp, BNY Mellon, and Activision Blizzard. However, it added to its position in Apple.

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