Tech confronts impact of coronavirus

Major American tech companies are facing a new challenge as they grapple with the outbreak of the coronavirus in China.

In recent days, tech companies have closed stores and offices, restricted executives and workers from traveling to the country and warned about the potential effects on their supply chains.

The pneumonia-like disease has infected at least 17,000 people and has led to 300 deaths, all but one of which have been in China. The rapid spread of the disease has already had economic repercussions in China, where stocks dropped 8 percent Monday after markets reopened for the first trading session since Jan. 23.

Experts have warned that the outbreak in the world’s most populous country and an economic superpower could threaten global growth this year.

But the effects could be particularly felt by the U.S. tech industry, which has depended on China both as a major market for its goods and as a critical supplier of components for a number of consumer products.

Financial analysts at Goldman Sachs on Monday predicted Chinese gross domestic product growth would drop 1.6 percentage points compared to first quarter last year, which they estimate would slow growth 1 percentage point globally over the same period.

Producers of smartphones and other consumer electronics could face steeper hits from the loss of revenue and productivity, according to the firm’s equity research team. Beyond the factories in Wuhan, where the disease originated, manufacturing throughout China could be affected. The outbreak coincided with the Chinese Lunar New Year, which sees millions traveling throughout the country.