In some respects, the number of people infected by the virus remains small, according to the WHO. Earlier this week, the agency reported 1,807 suspected cases of SARS in 16 countries with 62 fatalities. But health experts remained unsure how easily the virus is spread, and whether traditional quarantine methods will work.

Those lingering questions have put most companies into a watch-and-wait mode, even as they assess their ability to cope with potential disruptions to the supply chain.

Intel ships flash chipsets from its assembly and test plant in Shanghai, and will begin work there shortly on Pentium processors. Intel spokesman Chuck Mulloy said this week there have been no disruptions at the facility, and the local freight transportation system is "working fine."

Because Intel produces those devices at numerous plants around the world, it could shift work from Shanghai if necessary. "If there's a problem, we can move the capacity around," Mulloy said. "We have designed the system so we don't have chokepoints."

Midtier EMS provider Manufacturers' Services Ltd., Concord, Mass., is monitoring inventory levels and identifying specific products to watch in the event supply is interrupted in Asia, said John Boucher, vice president of global supply chain.

"We typically have alternative supply sources for most products, but are not looking at moving orders over at this point," Boucher said. MSL isn't reconsidering long-term plans to locate manufacturing in China, he added.

How big a problem?

Despite the anxiety SARS is causing, the global supply chain hasn't been affected in a meaningful way, according to Steven Fox an analyst at Merrill Lynch & Co. Inc., New York.

"Given the already significant and still rising concentration of electronics production assets in the affected areas, we understand precautionary measures have been initiated. Most, however, are still assessing the potential impact on their businesses," Fox said in a report this week.

Still, Raymond Tsang, president of Avnet Electronics Marketing Asia, who is based in Hong Kong, said the SARS problem there appears to be growing more serious each day.

"So far there is no immediate impact on Avnet's business; however, most economists have already adjusted down the projected economic growth rate of those infected countries," Tsang said.

Avnet Asia has developed processes and contingency plans to ensure that the company can maintain its services in the event it must shut any of its offices or warehouses.

"I expect the SARS problem will take some time to settle down and we have to plan for the worst and hope for the best at this moment," Tsang said.

Indeed, the repercussions of the SARS outbreak could be more far reaching than many companies think, according to Peter Kastner, an analyst with Aberdeen Group Inc., Boston.

"In the short term, we've seen a disruption in the ability of executives and sales teams to get in and out of Asia," he said. "Clearly, if the quarantine is of any magnitude, that will have significant impact on the world economy and will keep everything from capacitors to toys for Christmas from being built.

"Any CEO should be asking his team to think about the unthinkable," Kastner said. "If you're a notebook maker, where are you going to buy power supplies? Everybody buys those in China. What if I can't ship goods out of the country by plane or ship?"

That could actually work to the advantage of some U.S. companies, according to industry executives.

"We are seeing increased demand from OEMs and brokers looking to buy stock in North America that can ship immediately because many buyers in Asia are not available to take the call," said Schuyler Glidden, president of SG Industries Inc., a $20 million broker in Beverly, Mass.

"The Chinese market has vanished overnight. Brokers in China are no longer actively buying like the European and domestic markets."

Billy Pursely, a manager at independent distributor Smith & Associates Inc., Houston, also said the company's Hong Kong office is reporting that the SARS outbreak is beginning to interrupt business in Asia.

Business almost as usual

Many Taiwanese companies with manufacturing facilities in China are keeping their employees from traveling to the mainland or Hong Kong.

"Gigabyte has barred its employees from traveling to Hong Kong, China, and other infected regions. Employees who just returned from China are asked to stay home for a period of time," said an executive at Gigabyte Technology Inc., Taipei.

Gigabyte, which manufactures motherboards and PCs, is a supplier to OEMs like IBM and Legend Computer and has 2,000 employees working at two factories in China.

So far, Taiwanese companies claim no serious affect to their supply chain, and have not considered moving their plants elsewhere.

"For now, the SARS concerns won't affect Gigabyte's shipments or supply chain management," the executive said. "Unless the situation continues to get progressively worse for a month or more, there wouldn't be an impact on the overall economy or Gigabyte's operations."

There were no reports last week of disruptions to shipping lanes or cargo links, except as a result of the war in Iraq.

A spokeswoman at UPS' Supply Chain Solutions group said the company has experienced no significant impact to cargo transportation capacity in the region because of SARS.

"At this time, all current capacity allocations for our customers have been protected," said the spokeswoman, adding that there are "what-if" discussions taking place owing to concerns over the virus.

While the supply chain seems to be weathering the SARS scare, Tony Tseng, an analyst at Merril Lynch, Taipei, said there is a real possibility that a contagion could dry up demand for electronics goods and present a separate round of worries.

"The real concern is on the demand side, which could fall," he said. "If people are afraid to go out, or change the way they shop, consumer confidence could drop, hurting demand."

Additional reporting by Jennifer Baljko, Faith Hung, Bolaji Ojo, Jack Robertson, Claire Serant, Crista Souza, and Laurie Sullivan.