Wed, May 14, 2003 - Page 11 News List

Dell's office closed due to SARS

PRECAUTIONS A company representative said the closure came on the heels of a government-imposed 10-day quarantine of some of its Taipei employees

By Bill Heaney  /  STAFF REPORTER

The closure of Dell Computer Corp's Taipei office on Monday for a week due to a probable case of SARS should not hurt its business, analysts said yesterday.

After quarantining an undisclosed number of employees at home for the government stipulated 10-day period, Dell has decided to close its Taipei office and extend the quarantine period for another week "as a precautionary measure," Singapore-based Dell spokeswoman Judy Low told the Taipei Times yesterday.

A Dell employee went on medical leave on May 2 and was diagnosed as a probable case of SARS when he visited a health clinic. He and his immediate team members were placed under home quarantine until yesterday, but Dell decided to close its Taipei office Monday for one week, asking employees to work from their homes.

"We have asked employees to stay at home this week and will re-open the office on May 19," Low said.

Low declined to confirm whether the work-at-home employees were in quarantine.

Analysts brushed off the impact the office closure would have on Dell.

"At this moment there is no real effect," said Tony Tseng, an analyst at Merrill Lynch in Taipei. "Dell is still on track."

Last month, fears that SARS might interrupt the company's supply chain prompted Dell to ask its manufacturers in Taiwan -- Hai Precision Industry Co (鴻海精密) and Quanta Computer Inc (廣達電腦) -- to increase the number of products they keep in inventory to cover two weeks of orders instead of the standard one week.

The closure of the office for only one week should therefore have little effect, Tseng said.

"Dell's employees are still working and are in touch with suppliers by phone and e-mail," he said.

Dell's Taipei international procurement office buys US$10 billion worth of computers and equipment from local manufacturers for its parent company in the US. One of the jobs of a procurement office is to manage quality control, but Dell's spokeswoman said the company was using a "variety of methods" to make sure that would continue this week. "Delivery to [the employee's] home is one method," Low said. Dell engineers are also employed at the Taipei office to co-operate with manufacturers on design problems. The work is expected to be conducted via the Internet.

Over at Hewlett-Packard, purchase managers have also upped pressure on manufacturers to increase the amount of inventory they keep in stock ready to fill rush orders. Mounting inventory could hurt the manufacturers' bottom line after SARS is brought under control.

"Panel makers have already said inventory is building up and demand is not," said Frank Su (蘇穀祥), an analyst at BNP Paribas in Taipei. "After the SARS issue goes, manufacturers will be left with inventory and may have to adjust prices."

But Tseng expected a post-epidemic order pick-up to clear the inventory build-up. "If SARS is dealt with within one month, we will see a pick-up in orders in July and August which will soak up the inventory. Just one week extra of inventory should not impact prices."

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