Report on China USB Flash Drives Market From Research and Markets

Research and Markets announced the addition of the China Sourcing Report: USB Flash Drives report to their offering.

China is the world’s largest maker of USB flash drives, responsible for about 75 percent of global supply.

This year, an active base of over 100 manufacturers are expected to deliver over 173 million units, driven by rising global demand for desktop and laptop computers. Makers are expanding their capacity, while ensuring quality components for certified export-ready products.

USB flash drive is probably one of the few electronics product lines that will demonstrate impressive growth despite strong headwinds in the global economy. Although the industry consolidated in the past two years, many new suppliers continue to flock to the product line due to its low barrier to entry and an anticipated growth in demand.

Worldwide shipments of USB flash drives are expected to reach 173 million units in 2008, a 24 percent rise over 2007. This will largely be driven by an increase in ownership of desktop and laptop computers, since USB flash drives are predominantly purchased by PC users. As a result, China’s current supplier base of more than 100 makers is projected to expand again, after intense competition forced almost 50 percent of the companies to leave the line.

Based on estimates by interviewed suppliers, China produced 105 million USB flash drives in 2007, which accounted for about 75 percent of global supply. Nearly half of the output was exported, mainly to North America and the EU.

The following are some of the key trends we see in China’s USB flash drive industry:

• Suppliers are divided about increasing or decreasing their export quotes in the coming months. While many suppliers are concerned about the mounting labor cost and reduced profitability as a result of the yuan’s rising valuation, a significant number of companies are equally worried about the impact of price increases on their competitive edge
• With many suppliers planning capacity expansion in the next few months, China’s output is expected to increase by at least 10 percent and exports by about 15 percent
• EU will be the leading export market as some suppliers are avoiding the US market due to worries about currency exchange losses
• Although the USB 3.0 specification was unveiled in 2007, USB flash drives based on USB 2.0 will continue to dominate the product line for the next three to five years

This report covers USB flash drives with capacity ranging from less than 1GB to more than 8GB. These products are usually based on NAND flash memory and feature USB 2.0 interface. They generally support multiple operating systems and are integrated with add-on functions such as virus scan, dual-boot mode, data encryption and password protection.