Why Does USB Flash Drive Pricing Fluctuate So Much?

USB Flash Drives are one of the most popular electronic products in the world behind mobile phones and as with mobile phones; the price can vary greatly depending on the quality of the USB and also the memory size. The Flash memory chip inside a USB flash drive governs its price and this pricing can fluctuate greatly over time for a number of reasons.

Flash memory is a commodity and the price is governed by the old economic rule of Supply and Demand. Pricing on the whole as with most electronic products is on a steady decline, but every so often there are sudden events that can push pricing up over night. A recent example of this was the devastating earthquake over in Japan, where Toshiba who produce around a third of the world’s flash memory were badly affected. Toshiba’s factory wasn’t actually directly damaged by the Earthquake, but a number of the factories that produce the raw materials such as the silicone wafers (used inside a flash chip) had to stop production causing Toshiba to lower their output which lead to a drop in supply and an increase in price. Over the weekend of the disaster pricing went up by around 30%. This was mainly caused by panic and uncertainty over the supply of Flash memory and it took a couple of months for pricing to return to the levels they were at before the disaster.

There is also one company big enough to have a huge effect on the USB flash price and that is Apple. The Ipad, Ipod and Iphone all utilise flash memory and every so often Apple place huge bulk orders which can buy up months of stock from the top manufacturers leaving everybody else fighting for the scraps. In 2009 Apple bought up 4 months production of Samsung’s flash memory and the fact that Samsung produce around 40% of the worlds flash memory caused another huge price hike. This didn’t begin to correct itself until the order was completed.

Pricing on the whole is on a steady decline. The pricing on the lower memory drives seems to have bottomed out now as fewer and fewer manufactures are producing them due to low demand. There is little to no value purchasing anything below a 1GB drive as the current price difference between a 32MB and a 1GB drive (32 x the size) is only now around $1. As technology keeps on improving we should see pricing on the higher memory capacity drives continue to come down until it reaches the same stage as the 1GB seems to have done. There is little to no room for a 1GB to get any cheaper, any further drop in price would lead to the manufacturer losing money and there is no future in that.

If you are a consumer buying the odd USB Flash Drive for personal use, you may not notice these price fluctuations and they will have little effect on you, but if you are buying in bulk for promotional or educational use, it will be worth your while to sign up for regular USB price updates so that you can ensure that you are not buying when pricing is at a peak.