It was expected that there would be a relatively high market penetration rate for USB 3.0 flash drives. However this has not been the case. According to DRAMeXchange, the market penetration for USB 3.0 flash drives for 2013 is only 10%. DRAMeXchange is one of the four major research divisions of TrendForce which delivers services relating to market trends, impact of DRAM/flash memory products on the market, capital spending, and other relevant PC industry information.
The probable reason behind this, as explained by DRAMeXchange, is the fact that a handful of controller IC manufacturers are already beginning to speed up their research developments and investment. This caused USB 3.0 products to fall short of the market’s expectations.
To be more precise, controller IC manufacturers, like Innostar Technology, Phison Electronics, and Silicon Motion are presently the popular choices for many UFD (Unique factorization domain) manufacturers. These companies actually have a combined market share of 85-90%. Since these companies continuously promote their USB 3.0 Crystal Free solutions and also because of the draining of financial resources and the uncertainties in the market, a large number of vendors have started to veer away from the controller IC market. Because of this, DRAMeXchange predicts that the USB 3.0 controller IC market will be of the same state as the USB 2.0 market and that only around 5 to 6 major vendors will most likely be supplying controller IC products.
To understand the situation better, DRAMeXchange explained that UFD manufacturers wanted a reduced price difference between USB 3.0 and USB 2.0 products. To attain this, controller IC manufacturers need to offer the Crystal Free Solutions and migrate to more advanced manufacturing technologies, in order to increase the compatibility of their products with that of different NAND Flash components.
And to make all these possible, greater investment is of course needed. However, getting a big investment is becoming quite difficult, given that the market penetration of USB 3.0 is not doing so well. This gives greater pressure to many manufacturers, prompting them to veer away from controller IC market. That is why DRAMeXchange predicts that only a handful of major vendors will be supplying controller IC products in the future.
Among other reasons why the low market penetration of USB 3.0 are weak PC sales, tight NAND flash supplies and their declining prices, controller IC solutions for USB 3.0 flash drives that have yet to be refined, and intensified price competition from manufacturers of USB 2.0 flash drive.
For the second quarter of 2013, the USB 3.0 flash drive shipments have reached roughly 5 to 6 million units only. DRAMeXchange said the market penetration rate for USB 3.0 flash drives is expected to reach 20 to 25% by 2014, a mere 10 to 15% increase.