The continuing spread of a deadly virus has virtually halted business travel to Asia and threatens to disrupt manufacturing and sales operations in parts of the region.

Although still in the early stages of the outbreak of Severe Acute Respiratory Syndrome (SARS), companies at every level of the electronics supply chain are beginning to grapple with issues of procurement and production in the region.

Some of the hardest-hit areas -- Hong Kong, mainland China, and Singapore -- play a vital role in the plans of almost every company in the electronics industry.

Business travel in the region was being curtailed even before the World Health Organization (WHO) issued a rare warning this week that persons traveling to Hong Kong and China's Guangdong Province consider postponing all but essential travel.

The advisory seems to have convinced most companies to slam the brakes on trips to and within the region. Both Intel Corp. and Sun Microsystems Inc. cancelled trade shows scheduled in Asia.

"We have an office in Singapore and Japan and I speak with them daily," said Chuck Magee, executive vice president of sales and marketing at America II Electronics Inc., an independent distributor in St. Petersburg, Fla. "We have some executives who were due to leave for China this week and that was postponed. It may be too early for us to know if the industry's chip supply will be interrupted from the SARS outbreak."

The first signs that manufacturing output might be hurt by SARS began to emerge this week. Motorola Inc. was forced to temporarily shut down the night shift at a Singapore factory when one of its employees was hospitalized with SARS. The decision briefly kept 532 workers off the assembly line, where communications equipment is built, the company said.

Hewlett-Packard Co. and Intel both reported cases in which sales and marketing employees in Hong Kong contracted SARS or SARS-like symptoms, causing the companies to ask other staff members to work from home temporarily.

Chartered Semiconductor Manufacturing Ltd. of Singapore said it had a contingency plan in place to halt production if an outbreak occurs at any of its production lines there, according to a company spokeswoman.

The foundry said it was stepping up efforts to make sure common areas in its buildings were disinfected. Chartered employees returning to the United States from Singapore are being asked to remain at home for 10 days.

And while Singapore's Flextronics International Ltd. hasn't reported any SARS cases, the company is taking preventive measures by restricting travel, providing on-site medical personnel at its facilities, and instituting work-from-home policies for employees returning from other parts of Asia.

By: DocMemory
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