Memory card readers

	The CS-2RE0S050-B00 from Miteck of Taiwan is a single-slot card reader that supports microSD cards.

microSD card readers next in line; products target gift, premium and accessory markets

Single-card readers control a small percentage of the global memory card market, which is currently ruled by multicard readers. Reflecting demand, production for this product line remains small in mainland China and Taiwan, where the small supplier population pursue it as a secondary product.

Supply growth in the single-card reader market will not mirror the uptrend in the multiple-card reader sector, but makers are positive it will be steady in the next few years nevertheless. Mainland China makers estimate that in 2008 the output of single-card readers will increase to make up 5 percent of the total output of all memory cards compared with a 2 percent share last year. Along with this, prices of single-card readers will remain stable at $3 to $5 per unit, due mostly to the appreciation of the yuan against the dollar. Makers said much of the market growth will be driven by increasing demand for Secure Digital (SD) and related cards for use in mobile phones, PDAs and digital cameras.

Most available readers support SD cards and their variants. Many suppliers think single-card readers will eventually focus on microSD cards. Newly released single-slot readers are also able to read at least two card formats.

Suppliers of single-card readers in mainland China and Taiwan offer the product to expand their portfolios of computer peripherals and cater to long-term clients that request such product. Compared with multicard readers that target the retail markets, single-card readers are typically bundled with digital cameras, memory cards and mobile phones. Many products are also gaining a following in the gift, premium and accessory markets, where their trendy designs and low prices provide comparative advantages.

Prices are largely determined by order quantity, as products generally have the same features.

Besides the slim profit margins, makers are faced with the yuan appreciation and rising prices of components and raw materials, in particular plastic. The rising cost of labor in mainland China has prompted some Taiwan companies with facilities on the mainland to offer low-priced reference designs on one hand and high-end models with trendy ID or other value-added designs as well as complete services on the other.

The stranglehold of multicard readers in the market will keep single-card readers in the minority for the next few years. This line currently accounts for 10 to 15 percent of mainland China’s supplier base for memory card readers, which currently has a total of 100 makers. Only 10 to 15 companies can be said to be focusing on single-card readers, and the rest carry them only as a secondary product to complete their catalog of peripherals.

Mainland China suppliers of single-card readers started production only in H1 2007. Makers said their production this year will be mainly for customized orders, and that the product line will be a low priority. Some companies usually target their products at long-time clients to maintain good working relationships.

Taiwan has about 70 to 80 makers of memory card readers, all of which offer both multiple- and single-card readers. The majority of these makers focus on multiple-card readers, and manufacture single-card models as an added service to long-time clients.

Mainland China’s Szbroad Technology Co. Ltd has a monthly production capacity of 2 million memory card readers, with actual output averaging at about 1 million card readers a month.

Guangzhou Dtech Electronics Technology Co. Ltd has an 8000sqm factory that conducts SMT, assembly, test and packaging in-house. In H2 2008, the company’s monthly production of memory card readers is about 150,000 units,
3 percent of which is for single-card readers.

GHI International Ltd has a 3000sqm factory with six production lines. It can finish SMT, assembly and packaging in-house. In H2 2008, the company’s monthly output for single-card readers is estimated at 10,000 units.

Few Taiwan companies produce single-card readers as a core product. These include Cepa Taiwan Ltd, whose factory is located in mainland China’s Guangdong province. A-mego Infotech Co. Ltd and Miteck Inc., on the other hand, both offer multicard and single-card readers.

Single-card readers from Taiwan support any of the following card formats: SD, Secure Digital High Capacity (SDHC), xD, CompactFlash (CF) and Memory Stick Micro (M2). Most card reader models support SD cards and their variants, particularly microSD and SDHC. microSD card readers are forecast to command shipments of single-card readers in the coming months.

Taiwan’s Cepa predicts that microSD card readers will account for 40 to 50 percent of its shipments in 2008.

microSD card readers will make up 35 percent of Miteck’s shipment volume this year, the company estimates.

According to Jack Kuan, general manager at A-mego, demand for microSD single-card readers will grow as more PDAs and digital cameras support microSD format. Kuan projects shipments of microSD card readers will surpass those of SDHC card reader this year.

Meanwhile, shipments of CF single-card readers will decline because many multiple-card readers now support CF format, and more users prefer readers that support various formats.