The Smart Card Integrated Circuit Ecosystem in the
Americas – Ready for a Turnaround?
Peter Finalle, Research Analyst
Smart Cards
June 24, 2009

Agenda
Smart Card Market Overview (as it applies to integrated circuits)
-Current State of the integrated circuit market
-Smart Card/Integrated Circuit Comparison
-Integrated Circuit Features in Demand
-Ecosystem
-Life Cycle Overview
Integrated Circuit Market Overview
-Market Participants
-Drivers and Restraints
-Microcontroller/Memory chip
-Chip and Rom size
-Types of memory overview
-Types of memory details
-Crypto processors
Conclusion
2

Economic Effects on the Smart Card Integrated Circuit
Market
•Limited IT budgets will hinder current and near-term future smart card deployments
•New projects in any market will be limited
•Many card roll-outs will be delayed or canceled
•New or high-end technology will be the least sold (low-cost will be the focus)
•Lower cost technologies are highly entrenched in the NA and LA regions
•Ubiquity of magnetic strips and readers
•Smart card adoption in the United States has been slow
•U.S. has not experienced fraud levels of that in other regions
•Smart cards will need to make a clear and obvious case for their added value
3

Smart Card Trends as they relate to Integrated Circuits
Smart Cards Integrated Circuits
Low Cost as a Driver Low cost Integrated Circuits
Demand for a Higher Level of Security Advanced Chips have Advanced Security
More Advanced Applications Increased Memory Size
Smaller Power Draw Smaller Physical Size
Contactless Technology Demand Contactless Circuits
Large Markets (Government & SIM) Large Integrated Circuit Roll-Outs
Overall Smart Card Growth Growing Demand for Integrated Circuits
Competing Technologies Lower Integrated Circuit Costs
Public Distrust Distrust for Integrated circuits
4

North and Latin American Emphasis on Features
Power Consumption Low Cost Contactless Support Security Capabilities
5

Smart Card Integrated Circuit Ecosystem Demand
<<<
Vendors
Competition /
Regional Standards Technology
Security
Consumer Demand
>>>
<<< Features >>>
6

Average Smart Card System Lifecycle
Average Lifecycle for the Entire Smart Card System based on application
14
12
Government
Corporate
Number of Years for the Total System Life-cycle
Payment
10 Transit
Retail
08
06
04
02
00
Short Life Cycle Average Life Cycle Long Life Cycle
7

The Integrated Circuit Market
8

Competitive Landscape
9

Drivers and Restraints for the NA and LA Regions
Frost & Sullivan. 2009 Smart Cards Integrated Chipsets (North and Latin America)
Drivers and Restraints Chart
Low Cost Solutions
Financial Projects
GSM Dominance
Drivers
Broadband Penetration
Government Projects
Liability Shift
Multi Function Support
High Costs
Restraints
No Local Manufacturing
Payphone Decline
<<< Severity >>>
10

Shift from Memory to Microcontroller Integrated Circuits
Frost & Sullivan. 2009 Smart Cards Integrated Chipsets (North & Latin America)
Dynamic Shift from Memory Integrated Circuits to Microcontroller Integrated Circuits
Microcontroller Integrated
Current Year Circuits
Market Shift
Memory Integrated Circuits
11

Average Chip Size and EEPROM size
Chip size correlation with EEPROM size, by
40%
technology level -2008 (Including SIM)
35%
Chip Size
30% EEPROM
25%
Percentage of cards
20%
15%
10%
05%
00%
250nm + 250nm 250nm 130nm 130nm 90nm 90nm 64nm
8kb-16kb 32kb-64kb 128kb 256kb 512kb 128kb 256kb 512kb
EEPROM EEPROM EEPROM EEPROM EEPROM EEPROM EEPROM EEPROM
<<<Legacy Technology Advanced
Technology>>>
12

Limitations with Current Smart Card Memory: the
Eventual Replacement of EEPROM as the Standard
<<<
EEPROM
Maturity In Smart Card Applications
Flash
FRAM
MRAM
>>>
<<< Practical Transaction Speed >>>
13

Memory Standards: Breakdown
Strengths Weaknesses
• The current standard
• In wide use • Hardware limitations
EEPROM
• Easy to program for • Slow performance
• Significantly faster than EEPROM • Shorter lifecycle
• In wide use for other applications Flash RAM • Few smart card deployments with this
• Used in some smart card applications technology
• Over 20% faster than Flash RAM • Costly technology
Ferroelectric RAM
• Could have security vulnerabilities
• Faster than the other three memory • Costly technology
Magnetoresistive RAM
technologies • Significant lack of technology maturity
14

Crypto-Processor Popularity
90% Approximate percentage of cards
equipped with Crypto-Processors by
region
80%
70%
60%
Percentage of cards
50%
40%
30%
20%
10%
00%
North Latin
EMEA APAC
America America
15

Conclusions
Smart Card integrated circuits are in a state of growth in the North and Latin
American regions
Microprocessor integrated circuits are on the rise
New memory technology is beginning to show up in smart card projects
Crypto-processors are not in high demand in the United States
Low cost is the current driver in all North and Latin American countries
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For Additional Information
Craig Hays
Jake Wengroff Sales Manager
Corporate Communications Information & Communication
(210) 247-3806 Technologies
jake.wengroff@frost.com (210) 348-6420
chays@frost.com
Shyam Krishnan
Research Manager
Smart Cards
(210) 348-1018
shyam.krishnan@frost.com
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