Analysts relieved by Hsinchu false alarm

Analysts breathed a sigh of relief yesterday after rumors of a serious outbreak of severe acute respiratory syndrome (SARS) in Taiwan's chip-making heartland proved to be false. Nerves were rattled at the Hsinchu Science-based Industrial Park on Thursday when a suspected case of SARS turned up at Silicon Integrated Systems Corp (SiS, 矽統科技).

SiS, the world's third largest designer of chipsets, played down the incident, saying that the employee, an engineer at a research and development facility outside the park, "is in good condition ... and may not be a SARS patient."

The company has set up an emergency task force to trace all those who had contact with the employee in case hospital tests in the next 24 hours show that the employee does have the virus.

A real SARS outbreak at a chip manufacturing plant, or fab, could seriously hurt a company's bottom line by closing down production for three weeks, one analyst said.

"If a fab is quarantined and shut down, it could cause serious problems," said Alfred Ying (應宗傑), an analyst at BNP Paribas in Taipei. "There would be no output for 10 days and then it would take another one or two weeks to get back to normal production."

SiS' shares fell 4 percent, or NT$0.8, to close at NT$18.4 on the TAIEX yesterday.