Why usb drive price are going up

Samsung is the leader in Flash manufacturing with over 40% market share. They have also just released their hotly anticipated new phone, the Samsung Galaxy S IV. Even before the release of the newest version of their popular S series phone, they had worldwide smartphone market dominance – even beating out Apple’s iPhone!

Smartphones rely on flash technology, like most things these days. Since the popular quad core smartphone, like the new Galaxy S IV, rely on higher capacity chips, there is less production capacity to produce smaller capacity chips for things like custom usb drives.  This has resulted in production capacity for smaller chips being cut by as much as 50%. So it becomes a simple issue of lowered supply that unfortunately, drives up the price. Due to increased demand for higher capacity NAND flash, which is used in mobile devices, the cost of USB flash drives has gone up and created a headache for customers and resellers alike

NAND Flash Manufacturing

We are told that Samsung has also been moving resources in the flash manufacturing from traditional NAND flash components that make up USB flash drives and subverting them to other components that help their new hardware.

“Since 3rd quarter 2012, all the NAND flash manufacturers have decreased flash production and turned to other products such as CPU, Mobile DRAM, etc. They said they are not going to increase NAND FLASH production capacity in 2013.”

How This Impacts the Consumer

Since the production of lower capacity NAND has decreased, and production levels by Samsung have leveled off, there are fewer available components for flash drive manufacturers. This works like the stock market and creates a system like any other macro economic theory. When demand increases, for example with smartphones, supply has to catch up. Until that supply/output increases to match demand, the prices quoted for NAND chips will catch a strong bid.

With the new dynamics affecting the USB flash drive market which include industry consolidation, diverted production and no new capital investment, it is not clear as to when or if prices will fall.