Warren Buffett sold Taiwan Semiconductor, the AI chip company manufacturing the backbone of the entire AI revolution, in less than two quarters. The decision, which led to Berkshire Hathaway exiting a $4.1 billion position sooner than almost anyone expected, had nothing to do with the business itself. It was entirely due to geopolitical investment risks. And today, the same risks remain unresolved for those evaluating Taiwanese semiconductor stocks.
Why Warren Buffett left Taiwan Semiconductor despite AI advantages
$4.1 billion position eliminated in 2 quarters
Berkshire Hathaway disclosed its first shares of TSM in November 2022. At the time of its filing, approximately $4.1 billion worth of shares had been accumulated in the third quarter of that year. It looked like a pretty classic Buffett move. Taiwan Semiconductor was already a dominant AI chip company with strong profit margins, huge barriers to entry, and a level of control over advanced chip manufacturing that no competitor could realistically match.
By the fourth quarter, Berkshire had sold 86% of its position. The remainder will be liquidated by May 2023. For someone who wants to hold on forever, the complete exit in less than two quarters was one of the most surprising moves in recent investment history. Buffett sold the AI chip company while openly acknowledging that it is still the best in the world.
What Mr. Buffett actually said about Taiwanese semiconductors
Mr. Buffett never questioned what Taiwan Semiconductor was doing or how well it was run. At Berkshire’s 2023 annual shareholder meeting, he said:
“Taiwan Semi is one of the best-run and important companies in the world.”
His problem was geography. Asked directly about the sale, Buffett said:
“I don’t like that place.”
It was a reference to rising tensions between the United States and China and the possibility of a conflict involving Taiwan. It was geopolitical investment risks, not profit concerns, that drove this exit from the dominant AI chip company. He also admitted quite frankly that no one else in the semiconductor industry operates at the level of Taiwan Semiconductor.
Why this decision remains important for Taiwanese semiconductor stocks
Gavin Baker, CIO of Atreides Management, speaking at the 2026 Song Conference, impressively described the scale of Taiwan Semiconductor’s grip on the AI supply chain:
“If Taiwan Semi goes as Jensen hopes, Nvidia could sell $2 trillion of GPUs in 2026 or 2027.”
This sums up the foundry’s position in a nutshell. Warren Buffett TSMC investors held the stock at a single chokepoint that controlled how much AI computing power reached the market. Taiwan Semiconductor makes about 90% of the world’s most advanced semiconductors and is currently valued at more than $2 trillion. Major AI players such as Nvidia, AMD, Broadcom, Amazon, Microsoft, and Alphabet all rely on AI to turn chip designs into physical products.
Buffett sold the AI chip company he called the world’s best. That tension is what makes the decision worth reconsidering. The business case for Taiwanese semiconductor stocks is only getting stronger. The geopolitical investment risks he pointed out in 2022 have not yet disappeared. Anyone looking at the lessons learned from Warren Buffett TSMC and its exit faces the exact same tradeoffs today.
