Post Chinese New Year Holiday USB Stick Blues

Oh dear. It all started so well. In the build-up to the start of the Year of the Dragon on the 10^th February everyone was looking forward to the annual 2 week break from the production of USB memory sticks. Adequate provisions had seemingly been put in place to ensure customers were warned to order their USB sticks early, stockpiles of USB sticks had been built up in the UK and on their return from the New Year holiday the factories that manufacture USB sticks set about the task of catching up with the backlog of orders that inevitably built up during the two week factory close-down.

But like many best laid plans a couple of variables were either over-looked or simply underestimated and the net effect of this is the current carnage in the USB memory stick market. Prices of some USB sticks have no increased by nearly 50% in the last 2 weeks alone. Prices continue to increase every day with some manufacturers predicating that it might be another 3-4 weeks before things start to settle down again.

Such is the volatility that it’s either near on impossible to commit to prices or stock availability. The issues driving the price are:

1. Shortage of NAND flash TLC (Triple Level Cell) memory – this is the core component of any promotional USB memory stick, it’s the part of the USB stick that holds the data and much of it comes from Samsung and Toshiba. During February both of these companies reduced their output of NAND TLC memory by 10%-20% preferring instead to manufacture DRAM (Dynamic random-access memory) products and higher spec MLC memory chips.
2. Post Chinese New Year Holiday surge in demand – now the factories are open again there is simply too much demand chasing too little stock – the perfect conditions exist for classic “supply and demand” economics to drive up prices.
3. Production of low capacity memory chips has stopped – some manufactures have decided to stop production of all memory chips below 4GB which in turn ramps up the pressure on the limited supply of 2GB and below USB sticks.
4. Currency challenges - All flash memory components and the finished USB sticks are traded globally in US dollars. Today the pound (GBP) is trading around 9% lower than it was just a matter of weeks ago so if all other factors had been equal the price of USB sticks would have gone up by 9% during this period. But it’s not just the currency that has a bearing on price  as you can see from the above points.

Against this backdrop it’s perhaps not surprising that prices in the UK are in turmoil. At USB2U we still have thousands of USB sticks in stock that are available at the same price as 2-3 weeks ago but this only applies to certain models. So, if price is an issue then you may have to compromise on the style and memory size of the promotional USB memory sticks you order.

For other USB sticks our prices are currently only valid for 48hrs and the current trend is upwards so we strongly recommend that you place orders as quickly as you can. The other option is to delay your purchasing decision – prices will fall but not in the next few weeks.