LONDON--(BUSINESS WIRE)--The latest market research report by Technavio on the global smart card IC market predicts a CAGR of more than 8% during the period 2017-2021.
The global smart card IC market has been categorized into different segments based on application (telecommunication, financial, government, transportation, and others), microprocessor architecture (16-bit and 32-bit), and geography (the Americas, EMEA, and APAC). It provides a detailed illustration of the major factors influencing the market, including drivers, opportunities, trends, and industry-specific challenges.
Here are some key findings of the global smart card IC market, according to Technavio hardware and semiconductor researchers:
- Increase in number of financial frauds: a major market driver
- In 2016, the telecommunication segment dominated the application segments of the market
- The Americas dominated the global smart card IC market in 2016
- Infineon Technologies, NXP Semiconductors, Samsung, and STMicroelectronics are the key players
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Market growth analysis
Increase in number of financial frauds across several countries is one of the major factors driving the global smart card IC market. Magnetic tapes are used by most debit cards and credit cards to store data. As these tapes can be easily tampered, it leads to insecure monetary transactions and monetary loss for users. Card skimming, a technique wherein the details of the customer are stolen from the magnetic strip on the cards is an example of frauds that can be carried out using magnetic stripe cards. This information can be used to forge duplicate cards and hence be used to make fraudulent transactions.
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Geographical analysis
According to the Technavio researchers, the Americas has a lesser market share in the global smart card IC market when compared to APAC and EMEA. This is mainly because of the late adoption of Europay Mastercard Visa(EMV) standard in the region. Countries like the US began the adoption of EMV standard in 2015 compared to the countries in EMEA and APAC. The increasing number of financial frauds across the Americas has resulted in the adoption of EMVs. Some of the biggest hacks include the Target in 2013 and Home Depot data breach in 2014. These data breaches compromised the private information of millions of the US citizens.
According to Raghu Raj Singh, a lead analyst at Technavio for research on embedded systems, “In the Americas, the increasing transition towards EMV cards for healthcare systems is one of the key factors driving the smart card IC market. Patients receiving medical treatments from different doctors should undergo complicated paperwork, insurance coverage, and reimbursements. The health savings account (HSA) debit card, which is a tax-advantaged medical savings account for the US citizens has been developed to address this issue. The HSA cards used a magnetic stripe previously but, new versions of the card have integrated a smart card IC into the plastic body. The higher volume of payments, increasing value of each transaction, and the presence of several different payments acceptance systems will drive the adoption of EMV cards in healthcare systems in the US.”
Competitive vendor landscape
There are several major vendors who are present in the global smart card IC market and these vendors dominate the market. This has resulted in a high threat of rivalry. The concentration of these vendors is very high, which prevents new entrants from entering the market. The global smart card IC market is dominated by top four vendors, namely, Infineon Technologies, NXP Semiconductors, STMicroelectronics, and SAMSUNG. The major factors that are considered for the competitive scenario are performance of the product, quality and reliability of the IC, the price of the product, and the possible customization opportunities of the IC.
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