Storage-only units remain staple
Storage-centric models targeted at the gifts and premiums sector continue to fuel China’s USB wholesale flash drive industry. About 60 percent of the aggregate output in 2009 of 100 million units consisted of such type. Makers expect the category to remain dominant, with some releasing 8GB configurations to compete with staple 2 and 4GB versions.
The trend for value-added products will, meanwhile, push up interest in UDP and multifunction variants, which are forecast to gather traction in months ahead. The former, in particular, boasts enhanced performance with its faster read and write speeds. Several enterprises forecast market penetration will pick up once prices decline substantially.
USB 2.0 will continue to be widely adopted in this year’s releases but some companies are watching developments on the USB 3.0 front closely. Upstream suppliers Intel, NEC and AMD are already designing solutions for the latest interface.
Value enhancements, particularly for traditional functional USB flash drives, center on taking security a notch higher. Several manufacturers have started incorporating biometrics such as fingerprint or iris authentication modules, although most emphasize data encryption. This last is preferred for its software-based write protection and minimal administration requirements.
There are also makers that have begun developing models with encrypted partition for handling sensitive data. At present, however, only a few of this type ship overseas. Shenzhen Netcom Electronics Co. Ltd said this is because password authentication systems are usually unique to each region. Factoring in variations on language and usage habits, China suppliers provide only the solutions and related packages, letting the buyers choose another vendor to handle secondary work.
In general, local makers design a 2-partition USB flash drive to provide more customization flexibility. One can contain a read-only or several programs, or an auto-run function that cannot be reformatted. The other hosts the user’s data files.
With international brands Sandisk and Kingston taking up the bulk of the overseas market, China suppliers regard OEM a sustainable direction. Many generate up to 90 percent of business from such projects.
Eighty percent of exports are traditional models, with most shipments going to North America, Europe and Asia. Three out of four are storage-only units for the gifts and premiums sector. The rest consists of functional, customized variants for enterprise users.
Prices have been stable largely because of steady NAND flash memory costs. An upturn, however, is likely following Apple’s release of the iPad, which analysts believe will impact supply of the input in the next six months.
Large players forecast an upward movement of within 5 percent. These companies, however, piggyback on existing long-term agreements with memory vendors and are able to purchase components directly at special prices. The strategy allows them to cushion the effects of input shortage and fluctuating costs.
Yifang Digital Technology Co. Ltd maintains a strategic partnership with Hynix of South Korea to ensure a continuous and stable supply even in periods of worldwide shortage.
The few makers who can produce their own wholesale flash memory have the edge as they can control the cost and output themselves. Biwin Technology Ltd has opened a $140 million semiconductor factory for in-house wafer manufacture, testing, cutting and base packaging. More on Storage-only units remain staple…
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