Panicky Buffett dumps shares in Taiwan chipmaker

Berkshire Hathaway, Warren Buffett’s holding company, has sold all its recently-acquired shares in Taiwan Semiconductor (TSMC), which makes nearly all the world’s most advanced computer chips.

He was explicit about why: He’s worried about the location of TSMC’s factories in Taiwan, which is double-speak for saying he thinks China is fixing to invade Taiwan. (Read story here.)

TSMC’s chips are a strategic material. They’re used in satellites, missile guidance systems, and advanced computers. They give the U.S. and its allies a military edge, and also are essential to their civilian economies. But the factories that make them are separated from a huge Chinese military buildup by only a 100-mile-wide strip of water, the Taiwan Strait.

Chinese attackers likely would surround the island with a naval blockade, pummel it with airstrikes and missiles, and try to occupy it by sending a million troops across the strait in the largest amphibious invasion in human history.

Buffett said he “wishes it [Berkshire’s TSMC holding] wasn’t sold,”because it’s a good company, but he has “reevaluated” its location “in light of certain things that were going on.” That means he thinks the risk of a Chinese attack is growing, and an imminent takeover of Taiwan is “reality.” He said he “feels better” about Berkshire’s investments in Japan, and “wishes” TSMC’s facilities were in the U.S.

If Buffett is worried about an imminent Chinese attack, we should be too.

As I said, TSMC’s chips are vital to the West. The U.S. is not committed by treaty to defend Taiwan, but Biden has said he would, more than once. He really has no choice. Letting China seize control of the world’s advance chip supply is a no-go. That would allow their miliary to defeat ours, and make our economies dependent on Beijing’s whims.

China understands the stakes, but isn’t deterred. Not long ago, a top Chinese official publicly called a war with the U.S. “inevitable.” It might not stay conventional.

I understand Buffett’s concerns about investing in a company with a bullseye on it, no matter how good that company is. But if World War 3 erupts over Taiwan, his investment strategy will need to be a lot more expansive than just pulling his money out of Taiwan.

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