ID cards and passports drive smart card markets

Published 9 January 2006

Governments’ drive for biometric ID, followed by increasing adoption of the technology by the private sector, will boost demand for smart card

The smart card industry enjoyed revenues of $2,098.9 million in 2004, and revenues are projected to reach $4,188.1 million by 2010, according to new research from analyst group Frost & Sullivan. The use of smart card technology in governmental and other ID-based applications is not yet a mass market, but it promises great potential for the smart card industry in the medium term, Frost said. If you are in the smart card industry, just consider these three items: First, the Chinese national ID card project has a target of 800 million units; second, the Indian national ID project should reach in excess of 600 million units; third, there are twenty-seven countries the citizens of which do not need an entry visa to enter the United States, and they have until October 2006 to offer their citizens biometric ePassports if they want to retain the visa waiver status; fourth, several U.S. government departments are planning to order tens of millions of smart cards (see below).

Government agencies in North America are defining many programs around smart card technology, providing strong growth for all participants in the smart card value chain. As well as launching new projects, old projects are being upgraded to use higher-end smart cards. These cards will come in the form of 32k or 64k cards, with some form of cryptography for increased security. Between December 2004 and December 2008, NASA, the Defense Department, DHS, the Interior Department, and the Department of Veterans Affairs are planning to make an aggregated purchase of approximately 40 million cards through a GSA contract. The Transportation Security Administration (TSA) is working on a program called Transportation Workers Identity Credential (TWIC) aimed to verify the identity of U.S. transportation workers. TWIC will cover 429 airports and 362 seaports, and between 12 and 15 million workers carrying multiple identification cards for various activities.

Corporations and private organizations have become more aware of different biometric technologies as a result of growing government interest in such technologies. The corporate security market has traditionally been a physical access control market, but an increasing number of corporate enterprises are now adopting combined physical and logical access control cards.

-read more in this report