If only one piece of news surprised Seohak ants last week, it was the news of Warren Buffett’s purchase of TSMC, known to us as the ‘Sage of Omaha’ and ‘Value Investor’. This move is considered unusual because it is cautious about investing in big technology while favoring traditional industries.
Although analysts say that Buffett is betting on a change in the policy of US technology dominance along with the recovery of the semiconductor industry, the high investment value of TSMC, the world’s largest foundry company (production of non-memory semiconductor loads) is attracting attention once again.
The New York stock market is repeating fluctuations in the hawkish attitude of the Federal Reserve System (Fed·Fed). As the US economic cycle appears robust, the Fed appears to be making it difficult to change its policy stance. For now, it is expected that the process of finding a balance between the Fed’s monetary policy and the financial market will continue.
Buffett buys a stake in TSMC for $4.1 billion
According to an investment report submitted by Buffett’s investment company, Berkshire Hathaway, to the US Securities and Exchange Commission (SEC) on the 14th, Berkshire invested $4.1 billion (about 5.5 trillion won) in the third quarter of TSMC stocks published in US stock. He bought around 60 million shares of Depositary Receipts (ADR). This is the first time Berkshire has bought TSMC stock, and the purchase amount is almost half of Berkshire’s total stock purchases of about $9 billion (about 12 trillion won) in the third quarter.
Buffett, who takes value investing as the basis of his investment, has kept his distance from investing in technology stocks. He explained to shareholders that he did not understand how high-tech companies operated or that he was not prepared to value the business.
However, Buffett’s view of investing in technology stocks has changed a bit in recent years. Apple is a great example. It started investing in 2016 and now accounts for the majority of the portfolio.
TSMC is a Taiwanese semiconductor company known as ‘The King of Foundries’. Despite the recession in the semiconductor industry, it showed unstoppable growth, and in the third quarter of last year, it beat Samsung Electronics to become the world’s No. 1 in semiconductor sales.
Various views are raised about the background of Buffett’s purchase of TSMC. First of all, expect a recovery in the semiconductor industry.
As the global economic downturn began in earnest this year, the Philadelphia Semiconductor Index, a representative index of the US semiconductor industry, fell more than 16% from the start of the year. TSMC also recorded a record-breaking decline. TSMC, which is listed on the Taiwan stock exchange, has a similar decline from its peak in December last year as during the global financial crisis, and a greater decline than during the financial crisis in terms of ADR. In the industry, it is very likely that the semiconductor industry will recover from the second quarter of next year. Therefore, it is analyzed that Buffett started to buy TSMC, the strongest foundry with vast growth potential, at a low price.
In fact, a more powerful view is that it has considered policy changes in the United States, which competes with China for technological supremacy. Until now the US has prevented its allies from selling equipment such as semiconductors and telecommunications to China as a way to keep China in check, but with the passage of the Semiconductor and Science Act in August this year, the US States have turned around persuading its allies to invest in the country. This coincides with Berkshire’s purchase of TSMC.
Ha In-hwan, a researcher at KB Securities, said, “Memoryless semiconductors are at the center of changes in the way the United States manages hegemony in mass technology.” It can also be an investment area for technological excellence.”
Changing the Fed’s policy stance is not easy
The New York stock market is being rocked by a series of hawkish comments from Fed officials, and is barely gaining momentum for a rebound. Accordingly, last week, the three major indexes, including the Dow Jones, Standard & Poor’s (S&P) 500, and Nasdaq, repeated fluctuations again and again saying that every day is far away.
“The policy rate is not restrictive enough yet,” said James Bullard, president of the Federal Reserve Bank of St. Louis, a representative hawkish figure within the Fed, on the 17th (local time). It can be close to.”
A day earlier, Atlanta Fed President Rafael Bostic said monetary tightening had not yet constrained business activity enough to significantly reduce inflation, adding that it was “limited enough to bring inflation back to the Fed’s 2 percent target .” “Further rate rises will be needed to implement policy.”
Park Sang-hyun, a researcher at HI Investment & Securities, said, “If you look at the comments of key Fed officials, they will try to control the pace of interest rate hikes, but they are reluctant to talk about the end. rise in interest rates.”
There is a reason why Fed officials are pouring out hawkish comments like this. This is because economic indicators, such as the housing market indicator, are showing signs of contraction, but indicators representing the economic cycle are still showing a robust appearance.
On the 16th, the Atlanta Fed presented the US fourth quarter real GDP growth forecast at 4.4%. This is 3.6% in the last 3 days. It is above 4.0% on the 9th. It is true that it is not easy for the Fed to initiate a central change in monetary policy as a higher than expected growth rate could inadvertently increase inflationary pressures again.
Park Sang-hyun, a researcher, analyzed, “The fact that the US stock market recently showed a rally due to excessive pivot expectations is also a factor that causes Fed personnel to increase the intensity of hawkish comments.”
