Savvy investors watch closely the purchases of Berkshire Hathaway, headed by investing legend Warren Buffett. And in the third quarter, the company initiated positions in three entirely new companies. While its investments in building materials manufacturer Louisiana Pacific and investment banking firm Jefferies Financial Group were familiar buys in the Berkshire investing mold and constituted relatively small investments, the third new portfolio addition was eye-catching.

Berkshire Hathaway purchased 60 million shares of Taiwan Semiconductor Manufacturing Company (NYSE: TSM), which was worth approximately $4.1 billion at the time of publication of the investment conglomerate's most recent 13-F filing in November. The big buy made TSMC Berkshire Hathaway's 10th-largest overall stock holding and marked the first time that it had held a position in a pure-play semiconductor company since it exited a small position in Intel back in 2012.

Read on to see why investors might wish to follow Buffett's lead and build a position in this chip industry giant. 

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Source Fool.com