After the failure of Silicon Valley Bank last week, many businesses and entrepreneurs have been moving gradually to a safer destination. The situation has caused lots of panic across every sector.
The collapse of SVB over several frantic days sparked confusion and panic among startups and financiers worldwide, and economists are still grappling with the implications and potential systemic risks that the episode exposed.
According to reports, Apple Inc.’s main iPhone-making partner has a $100 million indirect exposure to Silicon Valley Bank’s failure, joining the ranks of finance and technology firms shaken by the startup linchpin’s failure.
Hon Hai Precision Industry Co. of Taiwan parked capital with investment funds, which then funneled money into startups that banked with the California lender, according to Chairman Young Liu.
It is now carefully reviewing its books, but it expects little impact because the Fed has guaranteed SVB’s deposits, he told reporters after the results were released on Wednesday.
The Asian firm’s comment underscored how the spectacular implosion of a bank once little-known outside of Silicon Valley is exerting a far-reaching impact around the world.
Hon Hai, also known as Foxconn, is the world’s largest manufacturer of iPhones and other electronics for brands from HP to Sony, maintaining the majority of its operations in China.
“The good news is that the US government has guaranteed the full return of all deposits and I believe the damage will be minimized,” he said. “We don’t see systemic risks to our investments.”
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