Smartcard IC market on course for steady growth

News

6 September 2006 News

With surging growth across various application sectors, the future of the steadily expanding smartcard IC market looks promising. Short term growth will be observed in applications such as SIM and EMV, with e-passports revealing some unit penetration at the end of 2006. Growth pockets will also be visible in the form of other ID projects and contactless technologies.

"SIM cards, identification projects as well as payment will be at the forefront across all regions," says Frost & Sullivan (www.smartcards.frost.com) smartcards global programme manager, Anoop Ubhey. "SIM cards remain a dominant force in the smartcard market, and with the promise of mega SIM cards, the future looks bright."

"As mobile operators look to boost their average revenue per user (ARPU), and data traffic set to grow considerably more than in the past, SIM usage is poised to soar. The increasing memory on the SIM card will allow users of mobile phones to store and download more applications (ring tones, movie/video clips and so on) onto their phone, thereby driving uptake.

"Demand for smartcards is also set to escalate due to demand from increasingly security conscious government and enterprises, especially after 9/11 (United States) and 7/7 (United Kingdom)," adds Ubhey. "Security related projects ranging from e-government projects, access control (physical and logical), to large scale national ID projects are all on the smartcard spectrum.

"At the same time, the introduction of e-passports will fuel growth both over the short - as well as long-term. Compliance by 27 visa waiver countries with the United States's requirements for e-passports will add impetus to market growth. Despite the optimistic scenario, semiconductor manufacturers will still need to overcome several challenges, most seriously that of pricing, in order to remain competitive. Intense pricing pressure last year saw a dramatic decrease in prices, especially in the SIM market. Continued price declines will further push semiconductor manufacturers to the brink.

Comments Ubhey, "Timing, as well as meeting customer requirements through product innovation and improved time to market, has become imperative for a company to remain competitive.

For more information contact Magdalena Oberland, Frost & Sullivan, [email protected]

Share this article:

Categories

News

Smartcard IC market on course for steady growth

Further reading:

Publications by Technews