Shipments of smart card integrated circuits (ICs) are projected to increase to 10.9 billion in 2016, up from 10.5 billion in 2015, according to latest research from IHS Markit. Trends in IC shipments are closely linked to the trends happening in smart cards themselves.
The key end-user sectors leading growth over the next five years include payment and banking, e-government and healthcare, Subscriber Identity Module (SIM) and transportation. These four sectors accounted for approximately 89 percent of IC volume shipments in 2015, but their shipment share will fall to 86 percent by 2020.
The largest sector in the market, SIM card ICs, is projected to increase from 5.44 billion in 2015 to 5.65 billion in 2020, followed by the payment and banking sector.
There was significant growth in the number of Europay, MasterCard, and Visa (EMV) cards shipped in the United States from 2014 to 2015. In fact, more than 220 million smart payment and banking cards were shipped to the United Sates in 2014, and this volume is projected to increase to around 644 million in 2015. The initial growth for EMV cards is coming from tier-one banks; but as they complete their rollouts, tier-two and tier-three banks are projected to ramp up.
A potential threat to growth of smart card ICs within the payment and banking, e-government and healthcare and transportation sectors is a trend towards multi-application cards and mobile devices. However, despite the rising use of multi-application cards within these three sectors, there is still enough growth potential to offset growth in multi-application credentials.
2015 has been an interesting year for the development of smart cards for the e-government sector, with disappointments and successes that give a mixed outlook for the whole market. The success of some of the more risky projects, such as the Nigerian identity card and the Ukrainian passport, which have struggled with extremely turbulent domestic situations, boosts momentum across the entire sector.
In Nigeria, all people over the age of 16 will have an electronic identification (eID) card by 2019. In Ukraine, EU membership and visa-free travel led to the launch of the ePassport in June 2015.
With these successes, there have also been setbacks. Russia is still mulling over the launch of its eID card. Turkey might be launching its long planned eID card in 2016 or 2017, but there has been no definitive announcement yet.
Asia has a key part to play in driving growth in the overall smart card ICs market. Undoubtedly, countries like China, India and Indonesia will be crucial to the overall health of the smart cards ICs market over the next five years.