SARS is dog-ate-my-lunch excuse

08/01/2003

By Mark A. DeSorbo

AUSTIN, TexAS—Severe acute respiratory syndrome (SARS) has become the "dog-ate-my-lunch" excuse for semiconductor and microelectronics manufacturers suffering from soft market revenues, according to an official at Martin Capital Advisors LLP.

Paul Martin, managing partner of the Austin-based investment management firm, says blaming SARS for faltering sales and falling revenues is the latest in a host of excuses that Texas Instruments Inc., Motorola Inc. and Nokia Corp. are using.

"They go through a litany of excuses," says Martin. "Instead of saying 'we reacted too late to combat SARS,' they say, 'oh, you've heard of SARS; well, there's nothing we can do about it'."

At the time of this report, travel restrictions had been lifted throughout Asia Pacific and in Toronto, where SARS has finally come under control. Yet many manufacturers remain alert for another outbreak. In fact, Edison Liu, executive director of the Genome Institute of Singapore, told Australia's Herald Sun that it would be "foolhardy" to believe SARS was gone.

"In these types of viruses that come from animals, you don't tend to eliminate it forever," he says. "If it catches hold in another animal, we can expect it to be around for awhile."

Meanwhile, Advanced Micro Devices Inc. (AMD; Sunnyvale, Calif.), a maker of personal computer processor chips, joined its fellow chipmakers, saying SARS is responsible for a $100 million shortfall in its second-quarter sales forecast.

The very wording of such press releases strikes a chord with Martin. "When Dell had a problem with laptops 10 years ago, they said they screwed up, they fixed the problem and they moved on," he says. "Admittedly, SARS is an issue, but other firms like Intel are able to execute their plans, and it would be nice if other companies stepped up to the plate and took some responsibility."