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The smart card IC market size is projected to increase by USD 1.45 billion, at a CAGR of 5.15% between 2023 and 2028. The surging demand for electronic ID cards is spearheading the expansion of the Smart Card IC Market. Electronic national ID cards, issued by governments to citizens, are witnessing widespread adoption globally, with many countries already implementing them and others planning to follow suit. These advanced cards boast sophisticated designs, functionalities, and communication interfaces, integrating features such as e-tax, e-voting, e-health, and public transport ticketing.
The market growth and forecasting report includes key player's detailed analyses of the competitive landscape of the market and information about 10 market companies, including Alioth, CardLogix Corp., Datasonic Group Berhad, Infineon Technologies AG, JCB Co. Ltd., KONA I Co. Ltd., Kshitij Polyline Ltd., Microchip Technology Inc., ON Semiconductor Corp., PGP GROUP Ltd., Protolab Electrotechnologies Pvt. Ltd., Samsung Electronics Co. Ltd., Secura Key, Seshaasai Business Forms P Ltd., SKS ELECTRONICS, Smart Card IT Solutions Ltd., The Swatch Group Ltd., and WATCHDATA TECHNOLOGIES Pte. Ltd. . Additionally, Imatric LLC company offers smart card IC namely THD86. It is suitable for general IC card applications.
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The market is segmented based on CPU Architecture (16-bit, 32-bit), applications (telecommunication, financial, government, transportation, others), and geography (North America, Europe, APAC, South America, and Middle East & Africa).
The market share by the 16 bit segment will be significant during the forecast period. 16-bit is introduced as an advanced version of 8-bit smart card ICs, as 8-bit had slower processor speeds. NXP and Texas Instruments are some of the market players that offer 16-bit smart card ICs. The adoption of 16-bit is high in the current market scenario owing to its low cost. Also, the demand for 16-bit smart card ICs is expected to increase due to the growing transportation sector, especially public transportation.
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The 16 bit segment showed a gradual increase in the market share of USD 2.37 billion in 2018. Further, various countries are investing in the development of public transportation facilities, such as the metro, which will lead to an increase in demand for 16-bit smart card ICs. For instance, in March 2022, the Indian government launched a metro system in Pune. Thus, such expansions in transportation will lead to an increase in demand for 16-bit smart card ICs, as these ICs will only be required to store customers' personal information and recharge the amount. Hence, with the boost in the transportation sector, the growth of the 16-bit smart card ICs segment is also expected to increase, driving the market during the forecast period.
The market will also be supported by the growth in the fifth-generation (5G) network, which is the latest mobile network technology. An increase in the penetration of 5G technology leads consumers to shift from the 4G network to the 5G network. This will lead to an increase in demand for 5G SIMs, which, in turn, will increase the demand. Further, these are used extensively in the telecommunication industry, primarily in the subscriber identity module (SIM). A SIM is a microcontroller-based smart card that is used in mobile phones and other devices, such as tablets. A SIM authenticates and identifies subscribers and connects them with the wireless cell phone network using IC. It is also used in transmission occurring through mobile broadband technology. As these SIMs require set-up connectivity, the rise in demand for SIMs is expected to increase the demand during the forecast period.
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APAC is estimated to contribute 50% to the growth of the global market during the forecast period.
Technavio's analysts have provided extensive insight into the market forecast, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. In APAC, South Korea, Malaysia, Singapore, China, Australia, India, Thailand, and Japan are leading in the deployment of smart card technology by end-user industries such as retail, government, telecommunication, finance, and transportation. Commercial deployments of digital money in countries such as India, China, Singapore, and Japan are likely to grow during the forecast period.
Further, most Asian organizations are focused on deploying smart card technology to enable flexibility and visibility in their operations and to improve security. Improved network infrastructure and high adoption of EMV standards in the region are expected to create a demand for smart-card ICs. Also, the use of the Internet has increased at a very high pace in the region. Hence, such factors are expected to drive market growth in this region during the forecast period.
The semiconductor chip supply shortage is a significant market driver for the Smart Card IC Market. As industries like retail, healthcare, BFSI, and hospitality increasingly adopt smart card technology for applications such as point-of-sale (POS) systems, RFID technology, and near-field communication (NFC), the demand for smart card ICs has surged. However, the ongoing semiconductor chip shortage poses challenges to meeting this demand. This scarcity has intensified due to the rapid digitalization across sectors, the proliferation of IoT devices, and the rising adoption of contactless payments and eSIM cards. Consequently, addressing the semiconductor chip supply shortage becomes crucial to sustain the growth and innovation within the Smart Card IC Market and meet the evolving needs of various industries and applications.
The surging demand for electronic ID cards is spearheading the expansion of the Smart Card IC Market. Electronic national ID cards, issued by governments to citizens, are witnessing widespread adoption globally, with many countries already implementing them and others planning to follow suit. These advanced cards boast sophisticated designs, functionalities, and communication interfaces, integrating features such as e-tax, e-voting, e-health, and public transport ticketing. Furthermore, the advent of digital ID systems, underpinned by identity and access management platforms, empowers both public and private sectors to verify the identities of individuals accessing their online services securely. As countries increasingly adopt electronic ID cards to streamline identification processes and enhance security measures, the demand for smart card ICs is poised to surge, driving the growth of the global market in the foreseeable future.
Robust demand for dual-interface cards is one of the primary market trends shaping the growth. A dual-interface card is a debit or credit card embedded with a chip that enables the card to be used for both contactless and contact transactions. The presence of a contact chip, a contactless chip, and a magnetic strip in this type of card enables the cardholder to complete transactions over a wide range of machines. Merchants are opting for devices with dual-interface cards, which will help them reduce the waiting time for customers in stores with high volumes of transactions.
As a result, various enterprises in the market are offering dual-interface cards to cater to the growing demand. The increase in demand for dual-interface cards will lead to a rise in demand for smart card ICs. This, in turn, will lead to the growth in revenue of the market during the forecast period.
Price wars among companies due to increasing competition is a major challenge that affects market expansion. The price of a smart card is determined by the price of the IC, which varies depending on the requirements of users. For instance, the price of ICs used in the financial sector varies from those used in the telecommunication sector. Regions such as MEA and South America have a low penetration of global and local market players. Most of the market players are located in APAC due to the availability of low-cost labor as well as resources for manufacturing.
As a result, the market is being controlled by a small group of companies, which is leading to high competition and subsequent price wars. Additionally, revenue generated by companies is declining, which is negatively affecting the demand for high-priced products. Thus, due to the price wars and declining prices, companies are facing negative impacts. This, in turn, may impede market expansion during the forecast period.
The market forecasting report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Market analysis and report of qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018-2028
The market is deeply intertwined with a multitude of sectors, including educational institutions and telecommunications, which increasingly rely on contactless payments facilitated by contact-type smart cards and NFC technology. POS systems equipped with debit cards and gift cards further enhance convenience and security. Data security remains paramount in this landscape, driving innovations like RFID technology and eSIMs with robust SIM profiles.
However, challenges such as the semiconductor chip supply shortage exacerbated by trade wars and tariff rates, compounded by the pandemic, pose significant hurdles. The smart card ICs industry faces pressure to adapt to fluctuating lead times for wafers and substrates, impacting logistics, assembly, and testing processes and ultimately affecting operational costs. Collaboration among semiconductor suppliers is essential to mitigate risks and fortify the supply chain against disruptions.
The market is witnessing substantial growth driven by various factors such as the increasing adoption of IoT technology, the demand for secure payment systems in BFSI and hospitality sectors, and the rise of smart city initiatives. With the integration of biometric authentication and contactless technology, smart cards are becoming essential for identity authentication and secure financial transactions. Moreover, the proliferation of e-government documents and e-health cards further boosts the demand for smart card ICs. As MNOs and other industries embrace digitalization, the market continues to evolve with advancements in technology and the integration of micro-embedded electronics for enhanced security features and data storage.
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Smart Card IC Market Scope |
|
Report Coverage |
Details |
Page number |
174 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.15% |
Market Growth 2024-2028 |
USD 1.45 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
4.49 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 50% |
Key countries |
US, China, Taiwan, Germany, and Switzerland |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Alioth, CardLogix Corp., Datasonic Group Berhad, dormakaba Holding AG, Imatric LLC, Infineon Technologies AG, JCB Co. Ltd., KONA I Co. Ltd., Kshitij Polyline Ltd., Microchip Technology Inc., ON Semiconductor Corp., PGP GROUP Ltd., Protolab Electrotechnologies Pvt. Ltd., Samsung Electronics Co. Ltd., Secura Key, Seshaasai Business Forms P Ltd., SKS ELECTRONICS, Smart Card IT Solutions Ltd., The Swatch Group Ltd., and WATCHDATA TECHNOLOGIES Pte. Ltd. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period. |
Customization purview |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by CPU Architecture
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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