The smart card IC market in the Asia Pacific is expected to register the highest growth during the forecast period due to the ongoing technological innovations in the telecommunications, BFSI, government and healthcare, and transportation verticals, the increasing adoption of digital technologies, and rapid urbanization and industrialization.


Global smart card IC market is projected to reach USD 3.9 billion by 2027 from an estimated USD 2.9 billion in 2022, at a CAGR of 6.3% from 2022 to 2027.


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Opportunities: Increased adoption of IoT by end-user industries


Industry 4.0 fully automates manufacturing processes with very little to negligible human interference. It works on the Internet of Things (IoT), cyber-physical systems, cloud robotics, cloud computing, and big data. Thus, IoT has gained the attention of technology vendors, organizations, business decision-makers, and consumers in recent years. Industry players are focusing on adopting IoT due to continuous technological advancements, increasing cellular connectivity & data transfer rates, and cloud infrastructure development. IoT can be implemented using various smart and connected devices integrated into various smart payment systems, smart homes, and connected cars. Additionally, the rising penetration of IoT in telecommunications, BFSI, transportation, and retail end-user industries has led to an upsurge in the demand for low-cost and highly efficient smart card IC used for secured data storage and data transmission.


Challenges: Global semiconductor chip supply shortage


The trade war between the US and China added to the supply chain disruption. China being a key supplier of semiconductors, delay in the supply of semiconductors due to the increased tariffs rates and pandemic has created impediments in the development of smart card ICs. The increase in demand for chips and supply shortage has resulted in increased lead times as well as their price. Wafers, substrates, logistics, assembly and testing, and operational costs have all become more expensive. In turn, semiconductor suppliers are being forced to pass their costs on to their customers to help stabilize the supply chain.


The ID cards application is projected to register the highest CAGR during the forecast period. The growth can be attributed to rising focus of government of different countries on transforming paper-based ID cards into chip-based ID cards to avoid illegal activities and protect citizens from identity theft. Governments of several European countries have rolled out circulars for mandating the integration of chips in ID cards. In response to this, there were over 9 million university students using student smart cards across 279 universities in Spain, Portugal, and Latin America.