Makers leverage strong electronics industry and upstream network to bolster line.
Piggybacking on a robust supply chain for various electronic devices, Shenzhen remains a major sourcing hub for USB flash drives in China. This city in Guangdong province accounts for more than 60 percent of the country’s overall output and exports in this category.
About 90 percent of the area’s yield in the line goes to international markets. Shipments from January to May this year exceeded 134 million units for a total value of $764 million, an increase of 58 and 60 percent from the same period in 2011. Last year, the city’s overseas deliveries hit 261 million units and generated more than $1.45 billion.
Shenzhen suppliers are confident of at least 30 percent growth in foreign sales in the next six months, thanks to strong global demand for portable data storage devices. The bulk of exports go to North America and the EU, which collectively absorb 80 to 95 percent of makers’ shipments. Companies will explore South America and non-EU countries in the years ahead to boost revenue further.
The positive outlook is buoyed by the city’s comprehensive industrial chain for various electronic components and terminal devices. Businesses are able to speed up product development and manufacture because of easy access to raw materials and components, including chip and memory solutions. Enterprises can also tap service providers within the city and nearby areas. Further, the rich upstream network ensures lower input costs, and therefore reduces total outlay.
Suppliers likewise take advantage of Shenzhen’s geographical location and transportation system, which facilitate speedy transfer of both raw materials and finished items. Even trading companies can easily source products from other inland areas in China and market them locally and internationally.
These strengths combined have expanded the city’s manufacturing base for USB flash drives, which now comprises about 800 makers. Approximately 80 percent of them are privately owned, and more than 90 percent are small and midsize operations with 50 to 200 workers and $1 million to $10 million annual export revenue. The few large enterprises employ over 200 personnel and generate beyond $10 million in overseas business. R&D teams in these companies include five to 20 staff members.
Some suppliers carry other USB devices in their selections to serve as a one-stop USB promotional and gift source.