Japan's Matsushita Developing Memory Cards with Smart Chip

TOKYO -- Smart cards are on the rise in Japan, using computer chips with an antenna embedded in them to allow people to pay for purchases or unlock doors with a simple flick of their cards.

Now, Matsushita Electric Industrial Co., the Japanese electronics company that makes Panasonic-brand products, is adding that smart-card capability to SD Memory Cards.

The Osaka-based manufacturer said Friday that sample shipments will begin in December, while commercial shipments will follow by fall next year.

Smart cards work by having an integrated-circuit, or IC, chip inside connect wirelessly with a special reader-machine to make cashless payments, open locks and read identification.

Many Japanese already flash their smart cards at station gates to get on commuter trains. New cell-phone models here also work the same way, enabling people to buy soda at vending machines, pay restaurant bills and play games at a Tokyo arcade.

But the technology now used for smart cards, FeliCa from Matsushita's rival Sony Corp., has a smaller memory capacity of 32 kilobytes. Matsushita's new smartSD Card connects to a separate 128-megabyte memory within the same chip.

That expands the card's possible uses to include downloads of movies or music and secure storage of documents. And the need for data capacity is bound to climb as smart cards grow more popular, said Matsushita director Masaki Akiyama.

Sony, which is pushing its Memory Stick for data storage, says it hasn't offered an IC chip with more memory because common uses today don't require it.

SmartSD won't be compatible with Sony's FeliCa, which is widespread in Japanese "wallet phones" and train passes, although it's possible that future devices may come equipped with both types of chips.

The smartSD Card looks like the regular one but will cost a bit extra although Matsushita didn't give a price. Matsushita officials said talks are under way to set up various applications but didn't give details.

But they said the potential is great, given that SD Memory Cards control 36 percent of the global market.

Smart card use in Japan is expected to surge to 340 million in 2010 from some 51 million last year, and Matsushita is hoping to get about 20 percent of that with smartSD.

In a presentation at a Tokyo hall Friday, Matsushita showed how a soccer-game ticket could be downloaded in a memory card on a personal computer.

Insert the card in your cell phone, and simply bring it next to a machine at the stadium gate to get in instantly. The memory function will even allow you to watch a movie on your phone display about the game.

The disadvantage is that the card -- about the size of a nail -- is just one more thing packed with personal information you can't afford to lose. But the data is coded so the card can't be read by anyone who happens to pick it up, according to Matsushita.