SARS hits semi hotbed

05/01/2003

By MARK.A. DESORBO

SAN FRANCISCO, Calif.—Scientist and health officials worldwide are still contending with the severe acute respiratory syndrome (SARS) outbreak, while industries employing contamination control technology are battening down proverbial hatches, expecting the worse from a stormy plague that also threatens manufacturing and sales operations.

Despite growing concern over SARS transmission, some U.S. businesses consider the outbreak a minor problem, and according to a recent survey, the majority of companies—70 percent—have yet to develop a response plan.

"While those numbers are disturbing, they also are somewhat predictable," says Garry Mathiason, a senior partner at Littler Mendelson, which polled 135 senior-level legal and human resources executives at a national employment law conference it hosted here in mid-April.

Hotbed is a hotzone

The SARS death rate has more than doubled to nearly six percent since the coronavirus-linked epidemic first surfaced in mid-March.

Some of the hardest hit areas—Hong Kong, mainland China and Singapore—are key locations for businesses, namely microelectronic and chip manufacturers, that are already reeling from a severe downturn.

Some semiconductor makers, like Intel Corp., have managed to turn a healthy profit amid the SARS crisis, but the chip-making giant has curtailed Asia travel and canceled developer forums in Taipei and Beijing.

An Intel spokesperson said CEO Craig Barrett, who was scheduled to deliver a keynote address at both April events, also canceled his travel plans to Asia. Intel, along with Hewlett-Packard Co., also closed Hong Kong offices after employees became ill with symptoms believed to be SARS.

Another semiconductor powerhouse, Motorola Inc. (Chicago) has lowered growth expectations and plans to cut about 3,000 jobs.

"What we are accomplishing, we are accomplishing in an environment of unique uncertainty that involves war, SARS and economic softness around the world," Christopher Galvin, Motorola chairman and chief executive, told analysts during a recent conference call.

Motorola also temporarily closed a factory in Singapore after one of its workers was diagnosed with SARS, while Chartered Semiconductor Manufacturing Ltd. says it will shut down facilities in Singapore if any of its employees become infected.

"There are no plans to shut down any of our operations at this stage, as there are no reports of anyone being exposed to SARS," says Maggie Tan, a spokesperson for Chartered. "If an employee is infected, Chartered, in compliance with the authorities, will take the necessary measures to shut down the affected area for one shift for the purpose of thorough disinfection—and operations will then resume."

The threat of SARS has also forced Semiconductor Equipment and Materials International (SEMI; San Jose, Calif.) to postpone SEMICON Singapore 2003. Originally scheduled for this month, the conference and exhibition will be held from Aug. 12-14 at the Suntec Singapore International Convention and Exposition Centre (SICEC).

"We believe that rescheduling the show is the most prudent action to take," says Stanley Myers, president and CEO of SEMI. "A number of exhibitors as well as their customers have instituted travel restrictions or are hesitant to participate in public gatherings in Singapore at this time."

While Intel, Chartered, Motorola and SEMI continue to optimistically grapple with SARS and soft market issues, there are some firms that outwardly blame the outbreak for worsening economic woes.

Novellus Systems, a San Jose, Calif.-based maker of chemical deposition systems, said that "hysteria" over SARS is to blame for a 23 percent drop in orders next quarter.

"The war and SARS have had an adverse effect on people's confidence in the future; so they are very cautious," says Richard Hill, Novellus Systems' CEO. "Asia has been particularly affected by SARS. There is a reluctance to interact amongst our customers... even amongst our employees. We are finding it difficult to continue to conduct training seminars, and needed meetings, in the course of actual business. As a result...we have had a significant decrease in our forecasted bookings."

Masks and quarantine

Scientists say SARS is caused by a new strand from the coronaviruses family, which also causes the common cold.

The World Health Organization (WHO), a United Nations agency, says the airborne disease originated in China's southern province of Guangdong, before spreading to Hong Kong, where it was then carried around the world by air travelers.

Quarantines seem to be effective in slowing the spread in Hong Kong and elsewhere, but traveling in public throughout most of Asia and even in parts of Toronto is usually done with a facemask.

Many wear the stark white surgical masks. Some, mostly children, wear more decorative, even fashionable, facemasks that depict everything from floral patterns to a whiskered cat.

One firm, the Industrial Technology Research Institute (ITRI; Taipei), says it has developed an "anti-virus" mask. After two years of research, the ITRI's Union Chemical Laboratories announced that it has successfully developed a mask, which they claim can effectively fight against SARS, influenza, and enterovirus—the outbreak of which killed scores of patients in Taiwan in 1998.

SARS has indeed fueled the mask market. In fact, when asked, 3M Co. (St. Paul, Minn.), refuses even to say where its U.S. mask plant is, "simply because in the current environment, our experience has been that every 3M facility has been besieged by phone calls," says Greg Snow, a corporate communications manager for 3M, in an interview with Toronto's The Globe and Mail.

The Centers for Disease Control and Prevention (CDC) has also been inundated with calls, receiving a record number regarding the threat of SARS. Julie Gerberding, CDC director, told a Senate panel the volume of daily calls sometimes exceeds 1,500. That's more than the CDC received even at the peak of the fall 2001 anthrax attacks, she said.

Anthony Fauci, director of the National Institute of Allergy and Infectious Disease, says there is not yet a need for quarantine in this country. Appearing on ABC's "Good Morning America," Fauci pointed out that President Bush had signed an executive order adding SARS to the list of diseases for which quarantine could be imposed.

"We're prepared to move in that direction," he said, adding that doing so is not yet necessary.