This report quantifies the markets for powered smart cards and their major components. Specifically, the objective of this report is to quantify the markets for powered smart cards by application and by region, and to quantity the market for two key components of powered smart cards—batteries and displays—over the next eight years, in both volume/quantity and revenue terms. We examine the latest component technologies, strategies, and technical developments of the industry. NanoMarkets has provided coverage of powered smart cards now for several years as part of its analysis of the markets for low-cost displays and printed batteries, and in this report we share the insights that we have garnered into the market opportunities that will emerge and grow in the powered smart card market. The powered smart card end-use markets covered by this report include: one-time password (OTP) cards, gift and customer loyalty cards, and identification (ID) or medical information cards. We also assess the differences in the potentials for powered smart cards in these applications by region, namely in Europe, Asia-Pacific, and the Americas. Batteries for powered smart cards are broken out into two general categories: printed batteries, which dominate the market for onboard power today, and thin-film batteries, which have the potential to be adopted more widely in the coming years. Display technologies used in powered smart card applications include liquid crystal displays (LCDs), light-emitting diode (LED) displays, electrophoretic displays (EPDs), and electrochromic displays.

1. NanoMarkets Report
Powered Smart Card Markets– 2012
Nano-585
Published Oct. 2012

2. Entire contents copyright NanoMarkets, LC. The information contained in this report is based on
the best information available to us, but accuracy and completeness cannot be guaranteed.
NanoMarkets, LC and its author(s) shall not stand liable for possible errors of fact or judgment.
The information in this report is for the exclusive use of representative purchasing companies and
may be used only by personnel at the purchasing site per sales agreement terms. Reproduction
in whole or in any part is prohibited, except with the express written permission of NanoMarkets,
LC.

3. Table of Contents
Chapter One: Background and Objectives of this Report...............................................1 Page | i
1.1 Background to this Report ..................................................................................1
1.2 Objectives and Scope of this Report....................................................................1
Chapter Two: Powered Smart Card Technologies and Products ....................................2
2.1 Powered Smart Cards: Competitive Advantages and Disadvantages Compared to
Other Smart Cards ...................................................................................................2
2.1.1 Comparison with Conventional Smart Cards ................................................................................. 2
2.1.2 Advantages of Powered Smart Cards ............................................................................................ 2
2.2 Enhanced Functionality—Which Smart Card Applications Need Power? ..............4
2.2.1 One-Time Password Cards for Enhanced Security ......................................................................... 4
2.2.2 Customer Loyalty and Gift Cards ................................................................................................... 4
2.2.3 Secure ID, Medical Information, and Biometric Cards .................................................................. 5
2.3 An Overview of Some Current Powered Smart Card Products .............................6
2.3.1 E-Bay/PayPal Security Key ............................................................................................................. 6
2.3.2 MasterCard and Visa OTP Cards—Losing Ground to Mobile Solutions? ....................................... 6
2.3.3 Powered Smart Card Manufacturers ............................................................................................. 7
2.4 Components and Technologies for Powered Smart Cards ....................................8
2.4.1 Thin-Film and Printed Batteries for Powered Smart Cards—Important Factors ........................... 9
2.4.2 Suppliers of Batteries for Powered Smart Cards ......................................................................... 10
2.4.3 Display Types Used in Powered Smart Cards .............................................................................. 11
2.4.4 Other Components: Solar Power, Biometric Sensors, Keypads, Etc. ........................................... 13
2.5 Key Points from this Chapter ............................................................................ 14
Chapter Three: Powered Smart Card Markets and Forecasts ...................................... 16
3.1 Forecasting Methodology ................................................................................. 16
3.1.1 General Methodology .................................................................................................................. 16
3.1.2 Data Sources ................................................................................................................................ 16
3.1.3 Scope of the Forecast .................................................................................................................. 17
3.1.4 Assumptions ................................................................................................................................ 18
3.1.5 Alternative Scenarios ................................................................................................................... 19
3.2 Eight-Year Forecast of Powered Smart Cards..................................................... 20

4. 3.2.1 Powered Smart Card Shipment Forecast ..................................................................................... 20
3.2.2 Powered Smart Card Shipment Revenue Forecast by Application .............................................. 23
3.2.3 Powered Smart Card Shipment and Revenue Forecast by Region of Use .................................. 26
3.2.4 Forecast of Batteries for Powered Smart Cards .......................................................................... 28
3.2.5 Forecast of Displays for Powered Smart Cards ............................................................................ 38
Page | ii
Acronyms and Abbreviations ..................................................................................... 54
About the Author ................................................................................................... 54
List of Exhibits
Exhibit 2-1: Advantages and Disadvantages of Powered Smart Cards ......................................... 3
Exhibit 2-2: Overview of Selected Powered Smart Card Providers ............................................... 7
Exhibit 3-1: Analysis of Smart Card Market 2012-2019 ............................................................ 22
Exhibit 3-2: Powered Smart Cards by Application 2012-2019 ................................................... 24
Exhibit 3-3: Powered Smart Cards by Region 2012-2019 ......................................................... 27
Exhibit 3-4: Printed Batteries in Powered Smart Cards 2012-2019 ............................................ 29
Exhibit 3-5: Thin-Film Batteries in Powered Smart Cards 2012-2019 ......................................... 32
Exhibit 3-6: Summary of Volume of Batteries in Powered Smart Cards 2012-2019 (Millions) ...... 34
Exhibit 3-7: Summary of Market Value of Batteries in Powered Smart Cards 2012-2019 ($ Millions)
.................................................................................................................................... 36
Exhibit 3-8: Analysis of Addressable Market for Displays in Powered Smart Cards 2012-2019 ..... 39
Exhibit 3-9: Electrophoretic and Related Displays in Powered Smart Cards 2012-2019 ............... 40
Exhibit 3-10: Electrochromic Displays in Powered Smart Cards 2012-2019 ................................ 43
Exhibit 3-11: Liquid Crystal Displays in Powered Smart Cards 2012-2019 .................................. 46
Exhibit 3-12: Light-Emitting Diode Displays in Powered Smart Cards 2012-2019 ....................... 49
Exhibit 3-13: Summary of Quantity of Displays in Powered Smart Cards 2012-2019 (Millions) .... 52
Exhibit 3-14: Summary of Market Value of Displays in Powered Smart Cards 2012-2019 ($
Millions) ....................................................................................................................... 53

5. Chapter One: Background and Objectives of this Report
1.1 Background to this Report
There is nothing new about smart cards; they have been used by the billions since the 1980s,
although they have proved much more popular in geographies other than the U.S. However, they Page | 1
are in the process of taking a great leap forward. A new breed of powered smart cards, with
onboard power, are emerging and have the potential to bring considerably more applications to
the humble credit and gift card, as well as more security.
A smart card is a pocket-sized card with an embedded chip that can receive, transmit, and
process information. The power for the chip may come from an external reader, through
induction—or most recently—from an onboard thin-film or printable battery. The potential volumes
for these smart cards are quite large; today, there are about 7 billion smart cards produced
annually worldwide. And one credit card company can produce 300 million cards a year.
The addition of battery power to smart cards adds greater functionality to the card and, in some
ways, makes the card easier to design. Most notably, addition of onboard power enables the
cards to come with an integrated information display, which could, for example, be used for
security or marketing purposes.
1.2 Objectives and Scope of this Report
With this potential in mind, NanoMarkets has published this report, which quantifies the markets
for powered smart cards and their major components. Specifically, the objective of this report is to
quantify the markets for powered smart cards by application and by region, and to quantity the
market for two key components of powered smart cards—batteries and displays—over the next
eight years, in both volume/quantity and revenue terms.
We examine the latest component technologies, strategies, and technical developments of the
industry. NanoMarkets has provided coverage of powered smart cards now for several years as
part of its analysis of the markets for low-cost displays and printed batteries, and in this report we
share the insights that we have garnered into the market opportunities that will emerge and grow
in the powered smart card market.
The powered smart card end-use markets covered by this report include: one-time password
(OTP) cards, gift and customer loyalty cards, and identification (ID) or medical information cards.
We also assess the differences in the potentials for powered smart cards in these applications by
region, namely in Europe, Asia-Pacific, and the Americas.
Batteries for powered smart cards are broken out into two general categories: printed batteries,
which dominate the market for onboard power today, and thin-film batteries, which have the
potential to be adopted more widely in the coming years. Display technologies used in powered
smart card applications include liquid crystal displays (LCDs), light-emitting diode (LED) displays,
electrophoretic displays (EPDs), and electrochromic displays.

6. Chapter Two: Powered Smart Card Technologies and
Products
2.1 Powered Smart Cards: Competitive Advantages and Disadvantages Compared Page | 2
to Other Smart Cards
Potentially, powered smart cards can be used for enhanced security of ATM/debit/credit cards,
portable healthcare files, airline tickets or boarding passes, and frequent flier cards. They can also
be used to authorize stock trades, open doors to the office, check out books at the library, store
digital cash to pay for subway rides, parking meters and candy at vending machines, and even as
car and hotel key devices.
But it is important to recognize that most of these functions can be carried out using currently
available, conventional, non-powered smart cards. Thus, in any discussion of the market for
powered smart cards, we must first distinguish their potential niches within the larger smart card
market.
2.1.1 Comparison with Conventional Smart Cards
Conventional smart cards contain embedded circuitry and either or both a memory and
microprocessor chip. These cards can receive input, process the information, and deliver output,
and they come in both contact and contactless formats:
 Contact-style smart cards have a contact area of approximately 1 square cm comprising
several gold-plated contact pads. These pads provide electrical connectivity when
inserted into a reader. The card reader provides connectivity to a host, such as a
computer or point-of-sale (POS) terminal, or a mobile phone.
 Contactless smart cards, and their readers, have embedded antennae and transmit
information using radio frequency (RF) induction technology (at data rates of 106-848
kbps), instead of through physical connection to a pad. These cards require only
proximity to communicate. Higher security applications use standardized protocols that
limit the read distance; lower security applications may employ RF frequencies that can
be read over larger distances.
Importantly, in both cases, the card reader supplies all of the necessary power. In the case of
contact cards, the reader's power source is harnessed through direct contact. In contactless smart
cards, an inductor captures some of the incident RF interrogation signal, rectifies it, and uses it to
power the card's electronics.
2.1.2 Advantages of Powered Smart Cards
Sometimes, smart cards are loaded with enough additional features that powering them with an
external power source becomes difficult or even impossible.
For example, contactless, RF-powered smart cards are constrained in their operation by their
power consumption. Contactless smart card application designers must pay attention to power
consumption peaks, high average power consumption, and supply voltage drops. If these hazards
are not handled properly, the smart card's operational stability is compromised.

7. In non-powered smart cards, these hazards are addressed by using special designs. For
example, a novel multi-core smart card design, which improves the operational stability of some
smart cards in use today, has been designed at the Graz University of Technology in Austria.
The researchers there say that their tests show that harmful power variations can be reduced by
up to 75 percent and predefined supply voltage levels are maintained properly.
Page | 3
However, the addition of onboard power in the form of a battery enables smart cards to include a
lot more functionality, and would simplify design issues for contactless smart cards.
The power-draining features that the industry would like to add to smart cards are, in some cases,
not yet well defined, but the product designs that are currently being considered include adding
simple displays, sensors, and sound. Several companies—most notably Bank of America,
PayPal/e-Bay, and some Visa issuers in Europe—already have powered smart cards in
circulation, primarily for enhanced payment security through one-time password (OTP)
generation.
The advantages/disadvantages that powered cards present over conventional cards are shown in
Exhibit 2-1. In all cases, the technical advantages of adding functionality are at least partially
overshadowed by the fact that adding these features greatly increases the cost of the card. Thus,
benefits of the added functionality must be carefully weighed against the added cost in each
application considered for a powered smart card.
Exhibit 2-1: Advantages and Disadvantages of Powered Smart Cards
Feature of Powered Advantages Disadvantages
Smart Card
Onboard power Increases functionality, simplifies circuit Adds cost
design
Integrated display Enables one-time password (OTP) Adds cost and complexity to
generation fabrication
Adds marketing capability Adds thickness to card
Integrated sound Adds marketing capability Adds cost and complexity to
Enables acoustic OTP generation (for use fabrication
with phones, for example)
Biometric sensor Enhances security Adds cost; adds thickness to
card
© NanoMarkets 2012
Onboard power to reduce overall costs—eventually: The addition of power to smart cards
simplifies things for the circuit designer and may ultimately lead to a reduced cost for the card.
However, in the near term, the cost of the added battery is simply too high, and the cost of
migrating standards and read/write protocols to adapt to a new, powered smart card is significant.
Nevertheless, we believe that, in the long run, the ability of smart cards to contain inexpensive,
easily integratable onboard power sources may eventually lead to reduced overall costs for smart
cards.

8. 2.2 Enhanced Functionality—Which Smart Card Applications Need Power?
Even if powered smart cards are not going to penetrate the smart card market very quickly, they
do remain a long-term opportunity, especially for the three, key applications identified in this
section: one-time password (OTP) cards, enhanced gift and customer loyalty cards, and
enhanced ID cards.
Page | 4
2.2.1 One-Time Password Cards for Enhanced Security
OTP cards are the single most important application for powered smart cards, for several
reasons:
 The ability of financial institutions to irrefutably authenticate a user through OTP, which
complies with two-factor (and sometimes three-factor) authentication protocols, could
potentially save financial institutions billions of dollars per year through reducing credit
card fraud and hacking/identity theft.
Given the money lost every year from credit card fraud, as well as the damage done by
the growth of hacking incidents, there is an implicit funding mechanism supporting the
development and marketing of such cards by banks, credit card companies, and other
institutions.
 Furthermore, enhanced security through OTP cards could give consumers additional
confidence in electronic commerce applications (phone banking, online shopping etc.),
further enabling widespread adoption.
 Finally, OTP security protocols are also important in corporate information security.
Powered smart cards could represent a cheaper, easier-to-implement, two-factor ID
authentication method for corporate user login protocols that are designed to limit access
to proprietary software or hardware.
An OTP is a password that is valid for only one login session or transaction. They avoid a number
of shortcomings that are associated with conventional—that is, permanent—passwords.
The most important shortcoming that is addressed by OTPs is that, in contrast to conventional
password systems, they are not vulnerable to so-called replay attacks, precisely because the
passwords are used only once. With an OTP card, the cardholder presses a button on the card to
display the one-time password, which is generated by an algorithm programmed into the card.
OTPs can be implemented in ways other than embedded in the cards. In the Europay-
MasterCard-Visa (EMV) "Chip Authentication Program," for example, a reader is used. In the
context of smart cards, though, OTPs must be displayed. This additional display functionality
drives the need for onboard power with an integrated battery, as well as, of course, the required
circuitry for computing the algorithm. The consensus is that a conventional reader-powered smart
card cannot accomplish these tasks.
2.2.2 Customer Loyalty and Gift Cards
Similarly, powered smart cards may find a home in the retail sector. In this case, the value
proposition involves increasing the marketability of customer loyalty and/or gift cards by
enhancing the features of these cards. Certainly, in some cases the use of technology similar to

9. OTP generation may be part of the picture, such as to increase the security of gift cards.
However, the application goes well beyond security:
 The display could be used to provide a remaining balance notification at the touch of a
button; security could be enhanced by adding a simple keypad for PIN entry prior to
displaying the balance. Page | 5
 The display could be used to deliver marketing messages of various kinds, or as a
decorative addition to a gift card.
 Addition of miniature, integrated speakers could enable the above displays to come with
sound, too.
 Finally, onboard power in a smart card could be used to enable the fabrication of
sophisticated gift/loyalty cards with multiple, interactive features, such as games with a
display and sound, etc.
2.2.3 Secure ID, Medical Information, and Biometric Cards
Outside of the banking industry, there is also a need for powered smart cards, usually for the
purposes of two-factor (and sometimes three-factor) authentication of a user. These applications
can be found in healthcare, corporate security, government identification, and in software or
hardware access across any number of sectors.
The design of such cards is very similar to the design used in the banking industry. In general,
the smart card has an added display that generates an OTP, contains retrievable/writable
information beyond which a conventional (non-powered) smart card can deliver, or contains an
additional biometric or other sophisticated sensor that requires additional power.
Smart cards in healthcare: Powered smart cards are also promising for health care applications,
such as to contain a patient's complete personal healthcare record (PHR) in a mobile format. In
this case, the cards are designed principally for the storage of large amounts of information and
must be dynamic/rewritable, but they must also sometimes be accompanied with a high level of
security in order to comply with patient confidentiality regulations.
These cards can be carried by the patient and can be formatted to contain the patients' complete
personal health record and related legal information, like power of attorney or Do Not Resuscitate
orders, as well as insurance information.
Smart ID and access cards: Both the public and private sectors may use powered smart ID
cards to improve identification security. Governments and corporate entities already commonly
embed electronic identification into passports, IDs, and access cards; the security of these
existing smart ID cards could be increased by upgrading to a powered smart ID card format that
could include greater verification capability and/or the ability to contain even larger quantities of
data.
Biometric cards: OTP is not the only security-related application for battery-powered smart
cards. Biometric smart cards include embedded sensors, usually fingerprint sensors that can
positively identify the holder of the card. Only after this process takes place will the card generate
a password, or otherwise permit access to a secure site.

10. For the biometric cards, the driver is obviously today's heightened sense of the need for security;
but this type of card is expensive today, and is not likely to generate the volumes associated with
a relatively simple OTP credit card in the near- and mid-term. One firm that is developing
biometrically-activated cards with onboard power is Danish firm CardLab.
Note that a three-factor authentication protocol, which is something like the ultimate in powered
Page | 6
smart card technology, would include both an OTP generator and a biometric sensor.
2.3 An Overview of Some Current Powered Smart Card Products
2.3.1 E-Bay/PayPal Security Key
One of the most prominent proponents of OTP technology is PayPal, which is now owned by
eBay. Both PayPal and eBay were early innovators in the implementation of secure methods for
consumers to submit payment information for online purchases, where concerns over fraud,
identify theft, and data phishing are high.
Thus, it is not surprising that PayPal was one of the earliest firms to offer OTP technology to
customers in the U.S., Canada, Australia, and several European countries (the U.K., Germany,
and Austria). It established a security card (and an alternative security token/fob) OTP option in
2006.
However, today, PayPal customers that want to take advantage of OTP technology have two
options; as of August 2012, they may sign up for a free service that sends OTPs to their mobile
phone via text-messaging, or they may continue to use the smart OTP card, for which they must
pay a one-time fee ($29.95 in the U.S.).
In other words, PayPal customers now have a totally free option that allows access to the same
basic function as the fee-based OTP card that has been around since 2006. Given the ubiquity of
mobile phones and text messaging in general, we expect that the free, mobile option will quickly
take over, leading to obsolescence of smart OTP cards within PayPal.
2.3.2 MasterCard and Visa OTP Cards—Losing Ground to Mobile Solutions?
A similar story has unfolded in parts of the banking industry, where several prominent banks are
offering OTP Visa and/or MasterCard smart cards to customers, but as part of a larger more
broad effort to improve payment and identification security. In these cases, mobile OTP options
are part of the story as well, and, sometimes, mobile OTP generation is the only option:
 Bank of America has been offering OTP cards to customers for online payments since
2007 under the trade name SafePass. Use of this optional service is free as long as it is
delivered to a mobile phone by text messaging, but costs the consumer $19.99 in the
form of an OTP smart card.
 Visa Europe partnered several years ago with Australian firm EMUE to offer OTP cards to
its partner banks in order to enable two-factor authentication, particularly for improved
online security. However, to the best of our knowledge, only a few banks have opted to
widely offer the physical OTP card option.

11.  Similarly, Citibank offers OTP service in some countries, but only via text messaging. To
the best of our knowledge, no OTP card option is available, although Citibank did release
a smart card in 2011 that allows customers to push a button on the card to toggle
between payment methods (credit or rewards points).
 In general, both Visa and Mastercard offer OTP services globally, through their Verified Page | 7
by Visa and SecureCode systems, respectively. Card-issuers can choose to participate—
and most prominent banks have chosen to participate—by offering these services to their
customers, but they need not be accompanied by issuing a physical OTP-generating
card.
The lack of widespread adoption of OTP smart cards thus far is a result of two factors. First, the
spread of smartphones has in some cases rendered these cards obsolete, especially for more
sophisticated consumers.
Secondly, the fact that issuers continue to charge customers for the added OTP service has also
limited adoption. Going forward, as powered smart card costs come down, issuers may be better
able to absorb the added cost without passing along the cost directly to the consumer. When that
happens, the technology may have a better chance of penetrating the larger smart card market
more deeply.
2.3.3 Powered Smart Card Manufacturers
Exhibit 2-2 contains an overview of several key smart card makers, with highlights of these firms'
current product portfolios and outlook.
Exhibit 2-2: Overview of Selected Powered Smart Card Providers
Company Product(s) Highlights
ActivIDentity OTP tokens and cards, as well as a Focus is on ID authentication for all sectors –
(U.S.) wide variety of ID authentication government, corporate, banking
products
AniCa (Taiwan) Stored value and OTP cards that are Active in the Asia-Pacific region; Using
ISO and/or EMV-compliant; electronic paper displays
Also has powered card product
specifically designed for use with
Apple iPhone for contactless
payment capability
dz card Full range of smart card products, Early pioneer of the OTP card business, now
(Thailand) including powered versions (for OTP, offering powered smart cards to banking, ID,
etc.) and government sectors; has employed Aveso
Also offers chips, software, and electrochromic displays in its products
subcomponents directly to other
card manufacturers
EMUE Offers OTP cards, but also offers Partnered with Visa to offer card to issuing
(Australia) mobile token products partner banks, especially in Europe
Gemalto (The Mid-sized firm with a broad portfolio Acquired Aveso (maker of electrochromic
Netherlands) of security products, including OTP displays) in late 2011/early 2012.
cards and smart ID cards (and tokens,
fobs, etc.)

12. Exhibit 2-2: Overview of Selected Powered Smart Card Providers
Identita Powered smart cards – OTP via Firm is focused on powered smart
(Canada/Barbados) audio and display cards only, unlike most that offer
Offers three-factor authentication powered smart cards as part of a
with added biometric capability larger conventional smart card
Plans to introduce GPS-enabled business.
Page | 8
cards Firm also has unique, proprietary
acoustic OTP generation technology.
InCard (Italy, subsidiary OTP cards for banking, customer Recently, focus has shifted somewhat
of STMicroelectronics) loyalty, and security toward mobile payment technologies
(card-free)
Inteligensa (Venezuela) Firm offers full range of EMV- Active mostly in Latin America, but
and Intelicard (Italy) compliant powered and non- recently acquired Italian firm
powered smart cards targeting Intelicard, which will expand its reach
banking, healthcare, and security into Europe and the rest of the world.
industries.
Nagra ID (Switzerland) OTP cards and a full range of non- Works with Master Card and a group
powered smart cards of EMV-certified partner companies
working in the banking, healthcare,
and ID sectors.
Firm has had several early design wins
in the powered smart card industry.
SmartDisplayer (Taiwan) Powered smart cards with integrated Offers cards with either LCDs or
displays for OTP and other electrophoretic displays; key partner
applications (dynamic CVV, for electrophoretic displays is E Ink
balance/value check, etc.) (U.S.); certified by Visa
Secure Metric OTP cards plus a full range of Particularly active in the banking
Technology (Malaysia) advanced security products, industry in Southeast Asia
including tokens & fobs, and
software
© NanoMarkets 2012
2.4 Components and Technologies for Powered Smart Cards
Thinness, durability, and flexibility in this sector are critical to success, because powered
smartcards (and smartcards in general) must slip inside a wallet. These requirements create a
need for somewhat specialized components.
Specifically, as these cards and similar ones spread, they will also create derived demand for
novel components including (1) new displays, like electrophoretic displays and electrochromic
displays, because LCDs have drawbacks; and (2) low-cost printed or thin-film batteries, because
button cell batteries are too thick.
All of the applications discussed in this report are a natural fit for powered smart cards, and we
expect to see them increasingly moving toward powered smart card technologies. Although
market penetration of powered smart cards today remains quite small, principally because of their
high cost compared to conventional/non-powered cards, in the long run, the value proposition for
such smart cards will get easier and easier to make.

13. Economies of scale will slowly but surely be realized, and component prices will come down. In
addition, more and more components will move toward printed and/or solution-processed
technologies that are inherently compatible with card manufacturing. The "ultimate" powered
smart card will be one that has a printed battery, but also a printed display (probably based on e-
paper), as well as, potentially, printed low-cost logic and even memory components.
Page | 9
2.4.1 Thin-Film and Printed Batteries for Powered Smart Cards—Important
Factors
The obvious choice for replacement of too-thick button cell batteries in smart cards would be to
use one of the new breed of thin-film and/or printed batteries that are currently being developed
by a small group of companies. Among the firms in this group that are specifically targeting the
smart card sector are Infinite Power Solutions (U.S.), Blue Spark (U.S.), Rocket Electric (Korea),
and Solicore (U.S.). Solicore is the most important of these firms in terms of actually gaining some
marketplace traction.
In the face of competition from conventional smart cards and from mobile (card-free) OTP
solutions, smart cards are not growing as an opportunity for printed and thin-film battery firms at
the rate that was once hoped. Nevertheless, powered smart cards remain an important short-term
opportunity for these types of batteries, because they offer a unique combination of
characteristics—thinness, flexibility, and (potentially) low cost and compatibility with credit-card
manufacturing processes. In contrast, conventional battery technologies, with their thick form
factors and liquid electrolytes, are simply not ideal for integration into plastic cards.
Thinness and flexibility of printed and thin-film batteries: Thinness and flexibility in the smart
card sector is obviously critical, because these cards must be thin enough to slip easily into a
wallet. For example, we note that printed battery manufacturer Blue Spark's UT Series is being
pitched toward the smart card market on the grounds that it is the industry's thinnest battery—500
microns (0.020 inches).
Market impact of smart card lamination requirements: Smart cards are generally
manufactured using a hot lamination process, which can last as long as 12 minutes.
Conventional batteries, such as coin or button cells—even assuming that they were thin enough
to be used—contain liquid electrolytes that would not survive such high temperatures, especially
in a charged state. Furthermore, there are additional safety concerns related to using
conventional batteries because of potential gas or liquid release.
However, we note that hot lamination is also a problem for the current generation of printed
batteries from Blue Spark and others, which often use liquid electrolytes and are thus relegated to
use only in cold lamination processes.
Thus, an immediate opportunity for printed battery suppliers is to develop and market versions
with solid-state electrolytes that can be deposited during manufacturing as a paste and then dried.
This approach has been adopted by Solicore, which, as we noted previously, is the dominant
supplier of batteries to the powered smart card business.
Thin-film versus printed batteries in smart cards: The most obvious contenders for powered
smart card applications are printed batteries, since smart cards represent a highly price-sensitive
application. Lost cost, primary cell, printed batteries are a particularly good fit for a mass-market
credit card that is produced in high volumes and has a low power requirement.