Global Smart Card IC Market Size, Share & Industry Trends Analysis Report By Type (Microprocessor and Memory), By Interface (Contactless, Contact and Dual), By Application, By Industry, By Regional Outlook and Forecast, 2023 - 2029

Global Smart Card IC Market Size, Share & Industry Trends Analysis Report By Type (Microprocessor and Memory), By Interface (Contactless, Contact and Dual), By Application, By Industry, By Regional Outlook and Forecast, 2023 - 2029

The Global Smart Card IC Market size is expected to reach $4.3 billion by 2029, rising at a market growth of 6.3% CAGR during the forecast period.

A smart card IC, or a chip card, is implanted in a plastic card and acts as a service token or credential for storing and exchanging data between users. Typically, it looks like a plastic credit card with an integrated circuit (IC) chip. In order to connect electrically to the inside chip, many smart cards have a grid of metal contacts. Smart cards can be used for application processing, data storage, personal identification, and authentication.

Applications include identity, finance, transportation, computer security, educational institutions, and healthcare. In addition, for single sign-on (SSO) within businesses, smart cards may offer strong security authentication. Smart cards have been introduced in many countries and are widely used. It is processed and saved in memory and on a card chip that has a microprocessor. It is frequently offered in memory and microcontroller variations.

The microcontroller smart card IC has a CPU, a crystal oscillator, a watchdog, timers, and analog output and input, among others. It aids in reducing the complexity, expense, size, and discrete component count of embedded systems' circuits. The memory smart card IC, on the other hand, relies on the card reader for processing and is best used when the card must carry out a specific function.

Smart cards can be composed of plastic or metal and are normally the same dimensions as a credit card or driver's license. Direct physical contact, often known as chip and dip, or a short-range wireless connectivity method like near-field communication or radio-frequency identification (RFID) are the two ways they link to a reader.

COVID-19 Impact Analysis

The business of smart cards in the telecommunications and healthcare sectors was less impacted. In the medium to long term, the expanding medical sector may cause the market's growth. The growth of healthcare data creates significant difficulties for efficient patient care as well as privacy. Smart cards provide secure data storage and distribution, addressing both problems. Once the market recovers from the COVID-19 pandemic by 2023, this could present an opportunity for market players. Due to expanding demand for contactless payments, government initiatives for national ID cards, and increased e-commerce sales, the smart card IC market is anticipated to grow in the coming years.

Market Growth Factors

Increase in contactless payments and transactions globally

A large number of people are employing contactless payment methods to buy groceries, household goods, etc. When making purchases during the pandemic, consumers wanted to minimize their exposure. People believed contactless (tap-and-pay) cards to be the quickest and safest method of payment. Post-pandemic, cash and checks are viewed as the least secure by consumers in terms of halting the transmission of COVID-19. Since 2019, the overall view of tap-and-pay or contactless cards as the most secure, convenient, practical, and quick payment method has grown. Therefore, the rise in contactless cards would increase the need for smart cards or devices with smart cards, which will propel the growth of the smart card IC market in the coming years.

Growing adoption and usage of SIMs and eSIMs

The development of encrypted machine-to-machine (M2M) communication made possible by eSIM technology has advanced the connected ecosystem. Hence, eSIMs provide safe, dependable, and economical cellular connectivity for IoT/M2M applications, which has expanded the use of wireless cellular-based solutions like eSIMs among many end-use verticals. Therefore, the smart card IC market will expand throughout the forecast period owing to the higher demand for SIMs that use smart cards IC extensively.

Market Restraining Factors

High infrastructure expenditures and worries about data theft and security

The use of smart card IC in SIMs is still less because of the data security concerns attached to it. An eSIM's operational flexibility would be useless if its security were jeopardized. For example, a mobile network operator's (MNO) login information is gathered and stored by an eSIM in the device's built-in software, which is vulnerable to numerous security breaches. It also uses a variety of physical platforms and MNOs to operate, which exposes it to the danger of the virtual environment. Therefore, the high cost of smart card deployment, along with the data security concerns of eSIMs, substantially lower their use, which is detrimental to the market's growth.

Type Outlook

Based on type, the smart card IC market is categorized into microprocessor and memory. The microprocessor segment garnered the highest revenue share in the smart card IC market in 2022. Microprocessor smart cards feature memory blocks and a microprocessor incorporated into the chip. A microprocessor card can also contain specialized file sections, each linked to a different function. A smart card OS handles the memory allocation and the data in the files. This card can do multiple tasks and often permits adding, removing, and other memory data manipulations.

Interface Outlook

Based on interface, the smart card IC market is segmented into contact, contactless, and dual interface. The contact segment garnered a remarkable growth rate in the smart card IC market in 2022. Contact smart cards contain exposed metal pads that must make physical touch with the card reader. The need for smart cards in commercial transactions as well as identity verification, is rising, and contact smart cards are becoming more and more popular as a result.

Application Outlook

On the basis of application, the smart card IC is fragmented into USIMs/eSIMs, ID cards, financial cards, and IoT devices. The USIMs/eSIMs segment procured the highest revenue share in the smart card IC market in 2022. The adoption of USIM and eSIM in consumer electronic devices, including mobile phones, tablets, smartwatches, and smartphones, as well as Internet of Things (IoT) devices, can be credited with the expansion of this particular market segment. eSIM technology is currently being developed by several firms that manufacture smartphones to integrate it into their most recent product lines.

Industry Outlook

By industry, the smart card IC market classified into telecommunications, BFSI, government & healthcare, transportation, education, retail, and others. The BFSI segment procured a significant revenue share in the smart card IC market in 2022. The banking and financial industry makes extensive use of smart cards. Prepaid cards, credit & debit cards, and ATM cards are just a few areas where smart card ICs are used. With the advancements in technology along with a greater adoption of them by BFSI industry has propelled the use of smart cards for authentication as well as financial transactions. This is boosting the expansion of the segment.

Regional Outlook

Region wise, the smart card IC market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The Asia Pacific segment recorded the highest revenue share in the smart card IC market in 2022. The market in this region is expanding due to the rapid industrialization and urbanization that is taking place, as well as the continuous technological innovations that are taking place in the verticals of telecommunications, banking, financial services, government, healthcare, and transportation.

The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Toshiba Corporation, ON Semiconductor Corporation, Microchip Technology Incorporated, STMicroelectronics N.V., Texas Instruments, Inc., Sony Corporation, Analog Devices, Inc., Infineon Technologies AG, Samsung Electronics Co., Ltd. (Samsung Group) and NXP Semiconductors N.V.

Strategies deployed in Smart Card IC Market

Mar-2023: NXP announced the launch of PN7642. The new one-chip solution combines a low-power Arm Cortex M33-based microcontroller, NFC front end, and a SESIP-certified security system. The PN7642 features a High output power of 2W and Integrated DC/DC allows a single 3.3V supply with max Tx power.

Jan-2023: Infineon joined hands with Sentry Enterprises, a technology company. The collaboration focuses on powering cold storage crypto wallets and biometric access control platforms.

Nov-2022: Infineon introduced the SLC26P security controller based on 28 nm technology for payment applications. This controller expanded the company's supply option for enabling long-term, dependable sourcing for embedded security and smart card. SLC26P would lessen the negative effects of the semiconductor shortages in security ICs and would meet the tremendous demand for innovative security solutions that is still there.

Jun-2022: STMicroelectronics unveiled ST4SIM-201, an embedded SIM (eSIM) for machine-to-machine (M2M) communication. This eSIM can be connected to 5G standalone networks. Additionally, it can connect to 3G and 4G networks as well as low-power wide-area (LPWA) technologies including narrowband Internet of Things (NB-IoT) and long-term evolution for machines (LTE-M). IoT applications and any device that needs a cellular connection can use the ST4SIM-201.

Jan-2022: Samsung launched S3B512C, a Smart All-in-One Fingerprint Security IC for Biometric Payment Cards. The new S3B512C combines a Secure Element (SE), a fingerprint sensor, and a Secure Processor, which adds an extra layer of authentication and security to payment cards. The product is designed to address the requirement of highly secured authentications.

Dec-2021: Infineon Technologies came into partnership with MK Smart for delivering 40nm security chip technology in eID, to upgrade the national ID Card of Vietnam. They enable protected biometrics and digital signing to access citizenry services on public and private portals by providing the chip and its operating system on smart cards equipped with the ability to securely store e-ID data compliant with ICAO standards. The card can be used by citizens to authenticate with banks and governmental entities.

Nov-2021: STMicroelectronics revealed ST31N600, a Next-Generation Secure Microcontroller for Biometric System-on-Card and dCVV Solutions. The ST31N600 enables battery-free smartcards to provide enhanced user authentication in contactless and online transactions and offers easy-to-use authentication mechanisms for payments.

Sep-2021: Infineon expanded its global footprint by setting up a new high-tech chip plant in Austria. The plant focuses on manufacturing power electronics on 400-millimeter thin wafers

Aug-2021: Analog Devices acquired Maxim Integrated Products, a company engaged in designing, manufacturing, and selling analog and mixed-signal integrated circuits. The acquisition boosts ADI's position as a manufacturer of high-performance analog semiconductors. Together, the companies aim to shape a more wholesome, secure, and sustainable future for all while advancing the next waves of analog semiconductor innovation.

Jun-2020: NXP Semiconductors unveiled MIFARE DESFire EV3 IC for Contactless Smart City Service. The new IC is backward compatible and provides enhanced performance and more secure contactless transactions.

Scope of the Study

Market Segments covered in the Report:

By Type

Microprocessor
Memory
By Interface

Contactless
Contact
Dual
By Application

USIMs/eSIMs
ID cards
Financial Cards
IoT Devices
By Industry

Telecommunications
BFSI
Government & Healthcare
Transportation
Education
Retail
Others
By Geography

North America
US
Canada
Mexico
Rest of North America
Europe
Germany
UK
France
Russia
Spain
Italy
Rest of Europe
Asia Pacific
China
Japan
India
South Korea
Singapore
Malaysia
Rest of Asia Pacific
LAMEA
Brazil
Argentina
UAE
Saudi Arabia
South Africa
Nigeria
Rest of LAMEA
Companies Profiled

Toshiba Corporation
ON Semiconductor Corporation
Microchip Technology Incorporated
STMicroelectronics N.V.
Texas Instruments, Inc.
Sony Corporation
Analog Devices, Inc.
Infineon Technologies AG
Samsung Electronics Co., Ltd. (Samsung Group)
NXP Semiconductors N.V.
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