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USB flash drives: Costs, applications slowing uptake

Makers defer R&D activities pending a solid market response and stable upstream chain to lower outlay.

Adoption of the USB 3.0 specification, particularly in China, is not expected to grow until after a few more years. Some member companies of the USB 3.0 Promoter Group control the technology, launched officially in November 2008, and acceptance in the PC motherboard and card sectors is still slow. This is even more so in China because it has only three or four suppliers providing solutions and chipsets.

USB flash drive
  USB 2.0 will likely continue as the mainstream interface with the slow adoption of USB 3.0.
The result is low turnout that can otherwise stimulate demand downstream and deflate current costs. As of 3Q09, a USB 3.0 chipset is at $2, or 400 percent higher than its 2.0 version. This has discouraged many terminal product makers such as Shenzhen Weidiye Electronics Co. Ltd to test the waters pending a positive buyer response that will override this outlay factor. The supplier exports HDD multimedia and HDMI-ported full HD media players.

A few China companies released prototypes in 3Q09 but the majority have no plans as yet to jumpstart product development in the absence of a solid market requirement. ¡°Costs are high and demand is very limited,¡± said Amy Xu, sales representative at Viooo Co. Ltd, which offers notebook and desktop PCs.

In due time, this will be reversed for mass manufacture to take place the way new technologies go. After all, the standard's 4.8Gbps data transfer rate was achieved in answer to a growing need in large and high-definition file storage, handling and exchange.

Early adopters
Leaps and bounds
Taiwan: Readying for wider adoption
Hong Kong: Initial venture starts in 1Q10
Early adopters

High-end computers and infotainment devices are initially seen to embrace the standard beginning 2Q10, while it may take one or two more years for other segments to follow.

Shenzhen Coship Electronics Co. Ltd forecasts early adopters will come from the MP4 player and digital camera segments. The maker estimates chipset costs will be stable by 3Q10.

One of the few that have introduced actual products is Taiwan-based Viewcon Electronic Ltd, operating a manufacturing base in Dongguan in mainland China's Guangdong province.

The supplier showcased an HDD enclosure and PC cards with USB 3.0 specification at the fall edition of the China Sourcing Fair.

Some companies have released SuperSpeed USB cable models as well.

Leaps and bounds

USB's initial launch in 1996 challenged the RS-232C and PS/2 interfaces for mice and keyboards, offering a 1.5Mbps data transfer rate. Two years later, a much-improved 1.1 version with a maximum 12Mbps speed followed.

In April 2000, the 2.0 specification was released, bannering 480Mbps and providing an alternative to the IEEE 1394. It expanded the application base as well to various other computer peripherals and consumer electronic devices such as printers, mobilephones, portable chargers and CD writers.

Upending this 10 times over at 5Gbps is the latest standard, sponsored by industry giants Intel, Microsoft, HP, TI, NEC and ST-NXP comprising the USB 3.0 Promoter Group.

Developed to strengthen USB's hold in the flash memory and mobile phone sectors, the new interface will target to corner other applications, including solid state disks and IP cameras.

USB 3.0 is also setting out to make inroads into some HDMI applications.

USB flash drive
Taiwan: Readying for wider adoption

Taiwan's IC industry has joined the USB 3.0 bandwagon in readiness for its projected growth in the global interface market. Although hampered by the high cost and power consumption of chipsets, suppliers are confident of a positive outcome in the long term.

Makers are also counting on the island's strong PC and peripherals segments to increase product penetration once the prime movers have effectively positioned the standard. they believe that integration in motherboards and computers will push USB 3.0 to the mainstream after 2010, just as it did for other standards such as pCI Express and SATA. this in turn will gather support in hubs and card readers, especially when chipset cost is nearer the 2.0 specification level.

The expected CAGR will exceed 100 percent from 2009 to 2012, or more than 500 million USB 3.0-based devices by the end period, according to In-Stat. By 2013, the new interface will have captured over 25 percent of the USB market.

Initially, the standard will target applications requiring high data transfer rates and large storage capacity, which include external Hdds and flash drives. the attach rate in external Hdds can surpass 70 percent by 2012, while the projection for the latter product's worldwide shipments is nearly 200 million units by 2013. But it is mobile phones that will take up the highest volume, based on In-Stat's calculations.

Portable media players, LCD PC monitors and digital still cameras are being eyed as early adopters as well. So far, USB cables and adapter cards have been launched, while prototypes of notebook PCs and motherboards carrying the new interface are due for release soon.

Among taiwan's device IC suppliers that can provide products based on the SuperSpeed USB specification are Genesys Logic, Alcor Micro and prolific, and major solution providers Faraday and Global Unichip. Leading controller IC companies phison, Via and SiS are also included.

Bafo technologies Corp. is one of those that have released computer cables.the company has likewise introduced a PCI Express adapter card with two USB 3.0 ports.

Hong Kong: Initial venture starts in 1Q10

A few Hong Kong suppliers are likely to join major electronics brands spearheading the release of USB 3.0 products during 1Q10. The rollouts from the territory, however, will be limited to one or two showcase models from each maker.

The cable assembly sector is expected to lead the pack. D&S Cable Industries (HK) Ltd, for instance, announced its model SMDU27-00BK cable as early as 2Q09. One other company said its own version is under way.

Suppliers of computer products will follow with the release of USB 3.0-to-SATA/eSATA adapters, internal or external controller cards, external HDD DD s and solid state disks. Zodata Technology Ltd, which offers SSDs with an eSATA connection and up to 256GB capacity, plans to introduce a SuperSpeed USB version once controllers are available.

Still, other companies are not even considering the standard at this time, as there are a number of devices that have yet to maximize USB 2.0's full bandwidth.

Ultimately, USB 3.0 product development in Hong Kong will depend on how fast the technology becomes integrated into desktop and notebook PC chipsets and OS. Access to components is generally not as simple. The high cost of manufacturing inputs is another obstacle, adding to the line's requirement for new testing equipment and software.

This article "USB flash drives: Costs, applications slowing uptake" is originally posted in Global Sources.

Note: All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.

Disclaimer: All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. We, our affiliates, and our affiliates' respective directors, officers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof) which infringe on any intellectual property or other rights of a third party.

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