World Smart Card IC Markets

Frost & Sullivan
July 13, 2006
SKU: MC1378581
License type:
Table of Contents Related Reports
Countries covered: Global

This research service provides an indepth look at the smart card IC market at a global level, breaking down into 4 georaphic regions, EMEA, APAC, North America and Latin America. North America and Latin America have been merged when providing forecast figures, but the drivers and restraints provided look at all regions.

Research Overview

This Frost & Sullivan research service titled World Smart Card IC Markets provides an overview of the market, while outlining some of the important trends coupled with the major challenges and threats market participants can expect to face in the short-to-medium term. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: memory ICs and microcontroller ICs.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
  • Memory ICs
  • Microcontroller ICs
Technologies

The following technologies are covered in this research:
  • Contactless technologies
  • SIM
  • EMV
Market Overview

Emerging Applications to Offer Scope for Expansion of Smart Card IC Markets

The need for improved connectivity and security in the communications environment is resulting in greater need for smart cards, thereby contributing to growth of smart card integrated circuit (IC) markets worldwide. Despite significant restraints, strong growth is expected, particularly due to the greater demand in the subscriber identity module (SIM) cards market, which continues to remain the dominating segment. In the future, data traffic is expected to grow considerably and mega SIM cards will enable mobile phone users to store and download several applications (including ring tones and movie/video clips, among others), also assisting mobile operators in increasing their average revenue per user (ARPU).

Terrorist attacks in the United States and the United Kingdom have increased the need for effective security measures by governments and enterprises across the world. As a result, security-related projects ranging from e-government projects and access control (physical and logical), to large-scale national identification (ID) projects, have found place on the smart card spectrum. Meanwhile, an increasing number of corporate enterprises are utilising contactless smart cards in corporate ID projects due to their convenience and other related benefits. Migration to the Europay, MasterCard, VISA (EMV) standard in the banking sector is also likely to create improved growth opportunities. "Thus, in view of the surge in growth in various application markets, the future of the smart card IC market offers tremendous scope," remarks the analyst of this research service. "SIM cards, identification projects and payment applications will be at the forefront of smart card IC markets across all regions."

Market to Benefit from Exponential Growth in E-passports

The increased use of smart cards in applications such as e-passports and driving licenses will also assist in market expansion. From 2006 onwards, the 27 visa waiver countries are likely to migrate towards e-passports in compliance with the deadlines implemented by the United States. However, despite these trends, the market is likely to experience fundamental changes due to increased efforts to combat declining prices. In the past, while volumes exhibited a rise, intensifying pressure on pricing caused a sharp decline in prices in 2005. This trend is likely to continue in the future, particularly in the SIM cards segment. Hence, market participants are eagerly pursuing new applications that can provide growth and revive flagging revenues.

"A 30 to 40 per cent decrease in the average price last year has altered the competitive landscape drastically," states the analyst. "The merger of the two largest smart card manufacturers to create Gemalto can be viewed as a lucrative opportunity, as well as a potential risk for semiconductor manufacturers." In this context, the ability to fulfil customer requirements through greater focus on product innovation and time to market will gain importance. Constant monitoring of market dynamics, competition and changing customer needs will become imperative. While the evolving nature of the market makes it exceptionally difficult to implement a strategy that can be effective for a period exceeding six to nine months, ample strategic opportunities exist to redefine crucial aspects of the market and gain new customers.


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