Shares of Taiwan Semiconductor Manufacturing (NYSE: TSM) were up 12.4% as of 10:19 a.m. ET on Tuesday after Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) disclosed a large stake in the chipmaker. 

TSM shares have fallen sharply this year over slowing demand in the semiconductor industry, but the investment by Berkshire is a signal that the stock has reached value territory.

TSM is the leading chip manufacturer in the world. It makes chips for Nvidia, Advanced Micro Devices, Intel, among others. Its expertise in cutting-edge chip technology allows the business to generate a high operating margin close to 50%, which is rare. 

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Source Fool.com