SARS epidemic could cripple IT industry

WHILE THE JUNE Computex show is still scheduled to run from early June, sources in Taiwan tell us that there have been many cancellations as multinational firms have policies on flying to risky zones. Even though Taiwan is not considered a risky zone compared to other countries like mainland China, Hong Kong, and Canada right now, just the fact it's in South East Asia is dissuading visits that Computex, and the industry, rely upon to keep the wheel turning.

Now a report from the government sponsored Taiwanese Market Intelligence Center (MIC), has suggested that the outbreak will have a clear effect on those companies which operate on the mainland, as indeed many of the Taiwanese OEMs do.

But the center said that even if a SARS epidemic occurs on production lines within China, "large scale factory shutdowns are unlikely due to China's large workforce".

That is not the case in Taiwan, where, the MIC says, any "hint of an infection" in factories will haly production.

The unit also says that if SARS continues to spread, orders that would have gone to Asian companies may instead go to European or US firms, while the outbreak "will deal a particularly heavy blow" to firms that rely on Computex and other shows to introduce their new products.

The MIC is downplaying the effect of SARS on the industry, we believe. Taiwanese firms are still the mainstay of the IT hardware business, and increasingly of the mobile phone, memory business and LCD production businesses too. µ