Smart card shipments expected to rise by 2.1B over the next five years

According to a new report from IHS, global unit shipments of smart cards are expected to rise by 2.1 billion from 2014 to 2019. In a statement, the research firm said that smart card shipments will rise to 10.9 billion units in 2019, up from the 8.8 billion that are expected to ship this year.

"The key end-user sectors that will drive growth over the next five years include payment and banking, e-government, and healthcare and transportation," said Don Tait, senior digital and ID market analyst at IHS. "The market will expand despite declines in subscriber identification cards (SIM), which are used in mobile phones. Slowing growth in mobile phones will cause SIM card shipments to flatten or decline."

In addition, IHS said that Asia will play a key role in driving the growth of the smart card market, specifically countries like China, India and Indonesia which the firm characterized as "crucial" to the overall health of the market.

However, a potential threat to smart card growth within the payment and banking, e-government, and healthcare and transportation sectors is the trend toward multi-application cards and mobile devices.

Multi-application cards combine multiple functions onto a single device, reducing the need for multiple cards and cutting down shipments. IHS said that mobile devices such as smartphones increasingly are incorporating technology like Near Field Communication (NFC) chips, which perform electronic commerce and other functions that compete with smart cards.

"However, IHS believes that despite the trend toward multi-application cards within the three sectors, enough growth potential exists to offset the drift toward multi-application credentials," IHS said in the statement. 

More information about the smart card market can be found in the new IHS report entitled, "Smart Cards and Semiconductors Report – 2014." This is the 12th dedicated report on the market from IHS and contains detailed market splits in terms of the installed base of smart cards; smart cards shipped annually, card replacement rates, and smart card IC shipments revenues as well as average selling prices. It also identifies key trends and opportunities in fast-developing sectors such as payment and banking, identification and machine-to-machine (M2M).