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The near-field communication (NFC) chips market is forecast to increase by USD 3,083.48 million, at a CAGR of 12.78% between 2022 and 2027. The growth of the market depends on several factors, including increased penetration of smartphones, increased adoption of contactless payments, and rising government initiatives for digital payments.
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The increased adoption of contactless payments is notably driving the market growth, although factors such as low awareness of NFC technology may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Near Field Communication (NFC) Chips Market Driver
The increased adoption of contactless payments is notably driving market growth. Contactless payment is a method through which consumers can purchase products using their credit cards, debit cards, or smartphones with this technology. Contactless payment is fast, convenient, and secure. It also helps the merchants in improving their in-store payment experience for the customers. The technology can reduce the customer time taken to make the payment and eventually the waiting time in a queue.
The increasing use of mobile wallets such as Apple Pay and Samsung Pay has contributed to the growth of contactless payments. These mobile wallets use this technology to wirelessly transmit payment data to payment terminals with this reader. The rising prevalence of contactless payments and the increasing use of contactless cards and mobile payments are expected to drive the demand for this technology card readers across POS terminals.
Significant Near Field Communication (NFC) Chips Market Trend
Increasing demand for smart parking is the primary trend in the market. NFC-enabled identification and payment solutions are expected to play significant roles in smart parking during the forecast period. This technology will be an integral technology for smart parking.
The rising number of smart city initiatives has accelerated the demand for smart parking solutions, which integrate access control readers or this reader to read and fetch the database. 91springboard, a global provider of co-working office spaces on rent. There are over 2,000 start-ups that work out of its properties. The facility provides access control of any type such as NFC, QR code, BLE, Wi-Fi, and others. The access controls present in the entry points are integrated with chips such as NFC ICs, Bluetooth ICs, and wireless ICs. Such developments in the market are likely to drive market growth and trends during the forecast period.
Major Near Field Communication (NFC) Chips Market Challenge
Low awareness of NFC technology is the major challenge impeding market growth. The majority of the countries, such as China and India, in the region, use QR codes more often. This is primarily because of the increasing awareness of payment services such as Alipay and Paytm. Also, most of the customers in these regions are price-sensitive and prefer buying low-priced and medium-priced smartphones. As a result, smartphone manufacturers such as OPPO, LG Electronics, Xiaomi, and others are trying to reduce the use of NFC chips in their devices. The removal of NFC chips from their devices is expected to bring down the cost of their products by a few dollars.
The cost of NFC chips that are integrated into smartphones ranges from USD 1.7 to USD 5.56 per unit. Smartphones are one of the large-volume application segments for chips. The smartphone market segment has a high influence on the volume growth of the market. With the reduced adoption of NFC chips in key market segments, the barriers to market growth will increase. This will affect the unit shipment of NFC chips during the forecast period.
The market analysis and 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 market research report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting 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.
Verimatrix Inc. - The company offers near field communication chips which are being designed to replace traditional ticketing systems with smart tickets for airlines, train, and bus tickets. The company offers various software solutions for protecting digital content. Software solutions offered by the company includes multi-DRM, embedded DRM, Verimatrix Video Content Authority System, TV everywhere authentication system, passwordless authentication system, and code protection system.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth of the non-auxiliary segment will be significant during the forecast period. Non-auxiliary NFC products primarily include internal NFC-enabled accessories, such as NFC IC/Chips built for smartphones to perform contactless payments, access control, and secure data sharing with other devices. While passive NFC tags are typically read by NFC readers, NFC readers are frequently integrated into contactless POS terminals and access gateways for public transportation. Thus, the growing demand for contactless POS terminals across the retail sector is majorly driving the growth of the non-auxiliary segment in the global NFC chips market during the forecast period.
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The non-auxiliary segment was valued at USD 1,590.46 million in 2017 and continued to grow until 2021. It is anticipated that the demand for NFC chips will be driven by the rising demand for smartphones. Peer-to-peer communication, read/write mode, and card emulator applications are all supported by NFC-enabled smartphones. This, in turn, is anticipated to drive the growth of the non-auxiliary segment in the global NFC chips market during the forecast period.
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APAC is estimated to contribute 63% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional market trends and analysis and drivers that shape the market during the forecast period. The buyers of NFC ICs in APAC are mostly OEMs. APAC has a high concentration of OEMs across end-user industries. This substantiates the dominance of APAC in the global NFC chips market. Some of the major OEMs, incorporating NFC ICs in their product offerings, from different end-user industries are Huawei Technologies, Lenovo, LG Electronics, Newland Payment Technology, OPPO, OnePlus, Pax, Sony, and Samsung Electronics. These smartphone manufacturers have established their production sites across APAC due to the low costs of raw materials and labor in the region. China, Taiwan, South Korea, and Japan are considered home to smartphone manufacturers that have a strong presence in the global market.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
NFC Systems Market- The market size is estimated to grow at a CAGR of 14.63% between 2022 and 2027. The market size is forecast to increase by USD 21,742.46 million.
The Near Field Communication (NFC) Chips Market is experiencing a surge in growth, driven by the expanding realm of mobile commerce. With the widespread adoption of PoS systems and collaboration with financial institutions, NFC chips are becoming integral components for secure transactions. The collaboration extends to mobile application developers who harness NFC technology to enhance user experiences, especially with the integration of wearable technology and various IoT devices. Notably, innovations like SECORA Connect address security concerns related to NFC transactions, while solutions like the Contactless Payment System and TouchBase facilitate seamless transactions. The market is further boosted by the integration of popular platforms such as Google Pay and the development of Reader emulation capabilities. Beyond auxiliary products, NFC chips find applications in diverse sectors, including banking and finance, establishing themselves as pivotal enablers in the dynamic landscape of modern payment solutions.
Near Field Communication (NFC) Chips Market Scope |
|
Report Coverage |
Details |
Page number |
173 |
Base year |
2022 |
Historic period |
2017-2021 |
Market forecasting period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 12.78% |
Market growth 2023-2027 |
USD 3,083.48 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
10.76 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 63% |
Key countries |
US, Canada, China, South Korea, and Japan |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Broadcom Inc., EM Microelectronic Marin SA, HID Global Corp., Identiv Inc., Infineon Technologies AG, Intel Corp., MagTek Inc., Marvell Technology Inc., MediaTek Inc., Murata Manufacturing Co. Ltd., Nordic Semiconductor ASA, NXP Semiconductors NV, Qualcomm Inc., Renesas Electronics Corp., Samsung Electronics Co. Ltd., STMicroelectronics NV, Texas Instruments Inc., Thales, Verimatrix Inc., and Sony Group Corp. |
Market dynamics |
Parent market growth 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 |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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