ABI Research: Smart-Card Market Gains Momentum from Contactless Technology

The market data from ABI Research shows that the market for smart cards and secure ICs grew to record levels in 2010, and is forecast to grow even further in 2011. The milestone of six billion ICs was passed for the first time last year as manufacturers bounced back from a poor 2009, recording growth of more than 20 percent to meet demand for the 5.9 billion smart cards that shipped. Driving this growth was the SIM card market which reached the shipment landmark of 4 billion units for the first time. These are not the only milestones: in terms of value, the IC market returned to the US$2 billion level after a significant decline in 2009 when it fell to $1.7 billion. This growth is a result of higher volumes and a slower decline in average selling price as well as strong growth in higher value verticals and a greater requirement for higher-level features, such as contactless and multiple application capabilities.

Smart cards employing a contactless interface made up a little over 10 percent of the total. “One might expect contactless to account for a higher percentage, but we must remember that SIM cards, which have not yet seen any significant contactless rollout, accounting for the majority of shipments,” said John Devlin, Practice Director.

“In the payment and banking sector, 2010 shipment volumes grew 15 percent and in the coming year they are forecast to expand even faster, comfortably exceeding the milestone of 1 billion units for the first time. We are also seeing more demand for EMV-compliant cards with advanced dynamic data authentication capability, new products meeting higher level common criteria security standards and greater issuance of contactless solutions,” Devlin said.