Warren Buffett is the world’s wealthiest and most influential investor. He recently bought more than $4 billion worth of shares in Taiwanese company TSMC, the world’s largest semiconductor manufacturer that is entering the US market with the construction of new plants. The finance guru has decided to bet firmly on technology stocks and in particular on semiconductors.
In recent years Buffett has become increasingly interested in the tech business. In 2016 Apple became one of his major investments. In his portfolio, the space reserved for technology stocks has gradually grown. In August, before acquiring TSMC’s shares, they accounted for 45% of the total. The choice to bet on semiconductors shows how this sector is destined to become increasingly crucial in the near future.
Chip manufacturing is a business expected to grow at a rapid pace in the coming years. Semiconductors are indispensable components for the development of new industries, such as self-driving cars and electric cars, artificial intelligence, connected home applications, data centers and 5G. In recent years, the lockdown has generated a condition of “shortage”, especially as regards components from the Asian market, which have become extremely difficult to trace. The recovery following the pandemic has increased the gap between the demand and the availability of these products, creating a situation that has not yet fully returned to normal.
Semiconductors are at the heart of the modern technological revolution. In the last decade, the global semiconductor industry has grown from $283 billion in 2010 to $442 billion in 2020. The applications that use these electronic components are expanding and consequently their demand is growing steadily. In 2022, the semiconductor industry is expected to grow another 7.7% year-on-year. Meanwhile, following the news of Buffett’s purchase, TSMC’s shares jumped +9.44%.
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