Solid growth for 'smart cards'
By James Carbone -- Purchasing, 12/10/1998
The worldwide chip card market will grow from $1.4 billion in 1997, to $6.8 billion in 2002, according to market researcher Dataquest.The chip card is the highest-volume electronics end product in the world. Dataquest estimates that 462 million cards were sold in 1997. That is about 13 times the number of cellular phones manufactured, 12 times the number of audio CD players made, and about 11 times the number of PCs produced. Chip cards, which include "smart" cards and memory cards, can replace paper and coins, debit and credit cards, and can be used as a means of electronic identification.
Semiconductor technology is driving chip-card market growth, with more powerful and lower-cost chips allowing the product to be used in more applications and by a greater percentage of the worldwide population. "Some of the biggest growth opportunities for semiconductor vendors will be for microcontroller chips used in various types of smart cards," says Jonathan Cassell, industry analyst for Dataquest.
Smart cards accounted for 56.2% of chip-card revenue in 1997. Dataquest projects that smart-card revenue will represent 70% of the market by 2002. More memory cards were shipped than smart cards in 1997, but these cards are less expensive than smart cards, so memory-card revenue will continue to trail the revenue from smart cards.
The most popular chip card is from the memory-card segment. Pay-phone cards led the industry with 67.7% of the chip cards shipped in 1997.
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