NEW YORK (CNN/Money) - Is the SARS outbreak in China a serious problem for the technology industry?

What do you say, wireless companies?

"'Yes!' Within the past two weeks, cell phone makers Motorola and Nokia and chip makers Texas Instruments and Triquint Semiconductor, whose components are used in cell phones, have blamed SARS in sales warnings."

OK. How about our next contestants, companies that are tied more closely to the personal computer sector?

"No Paul. It's overblown. Semiconductor companies Intel and Micron Technology and the No. 1 PC maker Dell have all brushed aside concerns about SARS."

So who's telling the truth? Survey says...the PC companies! Thanks for playing, wireless. Now our lovely assistant will tell you about your parting gifts.

Seriously though, SARS is probably having some impact on sales of cell phones in China. There are plenty of anecdotes about the Chinese retail industry grinding to a halt due to SARS fears. But while the disease is probably exacerbating the problem, the real issue is a glut of phones in China.

Motorola and Nokia have been salivating over the chance to gain a foothold in the potentially lucrative Chinese market. Problem is, several Chinese companies -- TCL, Eastcom and Ningbo Bird, to name a few -- have also been producing handsets hand over foot. Bingo. You've got excess inventory!

What tech rally? Wirless equipment companies are not feeling the market's love this year. Company  Price change (YTD)  Motorola  2.3%  Triquint Semiconductor  -1.4%  Qualcomm  -7.6%  Skyworks Solutions  -18.6%  RF MIcro Devices  -28.2%   Source:  Thomson/Baseline

"There was a mismatch of supply and demand in China before the SARS virus," said Jeff Bray, an analyst with D.L. Babson, a Boston-based asset management firm that owns shares of Nokia but no other wireless equipment companies.

This is not a good sign. Investors might be able to dismiss SARS as a temporary blip since the outbreak has faded from the headlines in recent weeks. But an inventory glut won't miraculously disappear.

"You can't exactly take all the phones and dump them into the ocean," said Bray. "The longer the phones are sitting around, the less they're worth, which means you either have to cut prices or write down inventory."

To that end, in its Tech Radar research report, investment bank SG Cowen said Wednesday that the buildup in China would be more than a one quarter phenomenon unless companies started taking charges to write-off inventory. Motorola said on Monday that it would not do that.

And if the handset companies find themselves stuck with unsold phones, then that should have a ripple effect on their suppliers. Texas Instruments and Triquint have already indicated that's the case.

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Cowen said that Qualcomm, which develops the code division multiple access (CDMA) standard used in many cell phone chipsets, might also have some big trouble in China later on this year as a result of the glut.

(By the way, we cited Qualcomm as a rare tech bargain in this market about a month ago and still think it's a good long-term bet, despite the near term concerns.)

The firm also said that RF Micro Devices and Skyworks Solutions, which make radio frequency integrated circuits used in cell phones, could be affected.

It's no wonder then that shares of Triquint, Qualcomm, RF Micro and Skyworks are all down year-to-date while Motorola's stock is only up 2 percent.

Nokia and Texas Instruments have done significantly better, with 15 and 26 percent gains, respectively. But even they are underperforming the moves made by the chip companies with more PC exposure. Micron is up 36 percent and Intel has jumped 41 percent.

Until the China inventory problem is resolved, it's likely that wireless equipment stocks will continue to lag the rest of tech.

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