Berkshire Exited $4.1 Billion TSMC Stake Over Taiwan Risks as AI Made It a $2 Trillion Chokepoint
Updated
Updated · 24/7 Wall St. · Jun 3
Berkshire Exited $4.1 Billion TSMC Stake Over Taiwan Risks as AI Made It a $2 Trillion Chokepoint
1 articles · Updated · 24/7 Wall St. · Jun 3
Summary
Berkshire Hathaway unwound its entire Taiwan Semiconductor stake by May 15, 2023, after slashing 86% of the position just one quarter after disclosing the roughly $4.1 billion investment.
Buffett said the issue was Taiwan’s location, not TSMC’s business, calling it one of the world’s best-managed and most important companies while citing geopolitical tensions between the U.S. and China.
TSMC has since become even more central to the AI boom, producing about 90% of the world’s most advanced chips and serving as the manufacturing bottleneck for Nvidia, AMD and major cloud companies.
That leaves Buffett’s move looking both defensive and costly: the geopolitical risk he flagged remains, even as TSMC’s strategic value and market capitalization have climbed above $2 trillion.
Buffett fled TSM over geopolitical fears. Was this prudent risk management or a multi-billion-dollar miscalculation on AI's growth?
With TSM's US expansion facing hurdles, can the world realistically de-risk its critical AI chip supply from Taiwan?
Is TSM's indispensability a deterrent to conflict, or does its critical role make Taiwan a more valuable strategic target?
TSMC, AI, and the $10 Trillion Question: Global Economic Stakes of Taiwan’s Semiconductor Chokepoint
Overview
The report highlights how surging demand for artificial intelligence (AI) is driving a breakout year for AI server demand in 2026, which in turn boosts overall chip demand across the server industry. TSMC is well-positioned to benefit from this trend, thanks to its ongoing 2nm capacity expansion, new production lines, and continuous growth in advanced packaging technologies. These strengths are further supported by the rapid growth in Nvidia’s data center revenues, reflecting the broader momentum in AI hardware. Together, these factors reinforce TSMC’s enduring market strength amid rising global demand for advanced semiconductors.