USB Memory Stick Price Could Stay High For a While – Here’s why
It’s all the fault of Samsung. OK, maybe that’s an over simplification and it’s perhaps unfair to point the finger of blame solely at Samsung but they are a major contributor to the current turmoil in the USB memory stick market.
The underlying issue is that Samsung is the leading supplying of flash memory with a market share of around 40%. Its flash memory chips are used in a wide range of consumer products including their own popular smartphones but products like smartphones require more sophisticated and higher capacity flash memory chips.
The new Samsung phone, the Galaxy S IV, is expected to be the “hot phone” of 2013 with demand for it expected to outstrip Apple’s iPhone. Consequently Samsung are believed to have shifted their resources from the manufacture of low end flash (the type used in USB sticks) to the production of higher capacity NAND flash (the type used in mobile phones).
Unfortunately the void in the low end flash memory market left by Samsung has not been filled by other flash manufacturers because they have also moved much of their production to the more profitable high capacity products. Smartphone seems to be where the money is and understandably the factories that produce flash are following the money.
The consequence of all of this is that we are facing a critical shortage in the supply of low end flash memory (the type used for promotional USB memory sticks) and there is no apparent end in sight. To compound matters even further it’s rumoured that production of all sub 4GB flash is likely to stop in the next couple of months.
In contrast to this the demand for cheap, low end, low capacity promotional flash drives continues unabated so we have the classic and uncomfortable situation of too many customers chasing too little stock – cue price increases!
In the UK the problems have been exacerbated by the weakness of the pound (GBP £) against the dollar (USD $). All flash memory is traded in dollars so ignoring the other supply/demand issues in the market at the moment the circa 9% fall in the pound against the dollar over the last few weeks has already had its own impact on prices.
Against the backdrop it’s perhaps no surprise that suppliers of promotional USB memory sticks are now reluctant to offer prices that are valid for longer than 1 or 2 days. It’s a challenging time for everyone in the market and it doesn’t look as though things are going to settle down anytime soon.
If you are looking to buy USB sticks now then take a deep breath and expect to pay more than you paid on your last order – waiting for the market to “recover” could be a long wait.
