Why do prices change so much for Custom USB Drives?

By · Wednesday, September 30th, 2009

Custom USBsAt Premium USB this question is something we hear quite a bit and I think it will benefit our customers if I take the time to answer it on this blog. If you were to take apart a USB flash drive, you would notice that it has a special chip inside that stores the memory. This memory chip is called a “NAND” chip and it is what actually stores your information when you upload files to the USB drive.

But why is the price so volatile? Well much like oil, wheat or gold, NAND flash memory is an actual commodity traded on an exchange in Asia.
Since it is a commodity, the price can fluctuate depending on the market. On the exchange there are two prices that are bid on, much like that of other commodities. These prices are the “spot”, the price you pay for immediate delivery and the “contract” or futures, the price you will pay for delivery in the future. Both of these prices have influence on the frequent price movements you see in the market.

Now that we have that cleared up let’s talk about the major events that can dramatically move the market and cause price changes on customized usb drives. For example, let’s say a major electronics manufacturer comes up with a new device that requires Nand Flash memory. This manufacturer is mass-producing this new device and is gearing up for the holiday season. Well this single manufacturer can greatly alter the NAND flash market single handedly. Now it’s merely a supply and demand issue; the demand has gone up substantially and the available supply is shrinking. This has resulted in more people bidding on lower supply, so naturally the price goes up.

Well you might say, “Can’t they just make more?” The answer is yes, but manufacturing more chips out of a fairly limited production capacity means there will be delays in getting enough chips produced to meet the higher demand now present on the market. However, the reverse can also happen. Producers can over produce NAND Chips by misgauging the market demand. This over supply will cause prices to drop since there is now a surplus on the market.

So it’s important to understand this when you are shopping for custom USB drives. We advise our customers on this issue so that they can advise their customers when quoting on a project. This helps to ensure that everyone has the right expectations and can maneuver accordingly if there is volatility in the market. Don’t forget Premium USB have the most competitive prices on the market for custom printed USB and we will beat any competitors price with our 100% Price Match Guarantee. That is something you can count on.

Comments

Good to have a company up front and honest about the USB flash fluctuations…Quality and price is something Premium USB has always come through with for my jobs!