Texas Instruments Putting Its Stamp On The Electronic-Passports Market
September 27, 2007: 08:05 PM EST
Sep. 27, 2007 (Investor's Business Daily delivered by Newstex) --
Texas Instruments, which already makes chips for electronic ID cards, is using its E-ID know-how to enter the emerging e-passport market.
The Dallas-based chipmaker on Thursday is set to announce plans to start selling chips for passports and other other identification cards. TI TXN plans to roll out its first passport chips in 30 to 60 days.
The U.S. and more than 20 other countries have begun to issue electronic passports, and 30 more countries plan to do the same. E-passports include radio chips that transmit the details written on the passport. Future chips likely will include fingerprints or some other biometric identifier. The chips in e-passports then can be passed through machine readers, letting agents get people through customs lines much more quickly.
The U.S. State Department plans to start looking at proposals for second-generation electronic passports in mid-2008, and this is the market TI has targeted. The new generation of e-passports will speed up the customs process by 25% or more, executives estimate.
TI, though, will face some big rivals in this market niche.
Companies that make chips for electronics ID cards include NXP Semiconductors (formerly Philips Semiconductors), Infineon Technology IFX, Sharp and Toshiba.
ABI Research analyst Jonathan Collins says TI is late to the party, but not too late.
"They're not at the cutting edge, but that's OK," Collins said. "We're talking about more than 100 million passports (worldwide) a year. And we're only about a year into e-passports, so it's still the early days."
Collins says TI has proven technology and could do well here.
Julie England, a Texas Instruments (NYSE:TXN) vice president, says missing out on the first generation of e-passport chips won't hurt the company in the second round.
"We don't have first-mover advantage, but we'll serve the market in a new way," England said.
She points out that TI has for many years sold chips worldwide for credit cards, gasoline cards and other uses. England says TI has many technologies and software for the e-passport market.
It's going after this market because the number of passports being issued is ballooning and all passports now come with chips.
One reason for the jump is a new rule as of this year that requires U.S. citizens to have passports when traveling to Mexico and Canada.
England says TI's ID chips include a new type of memory called ferroelectric RAM, or FRAM. Today's e-passports mostly use an older memory called electrically erasable programmable read only memory. FRAM is much faster than EEPROM, she says.
TI's e-passport chips also will include security software and a very fast microcontroller, the small processor that acts as the brains of the device, England says.
Embedded into passports, TI says its chips will shave a few seconds off of the time it takes personnel to scan passports. Multiply that by millions of passports and you're talking big time savings, England says.
"One thing consumers want is a 'wave and go' experience," she said. "One way to do that is to have very fast memory."
Newstex ID: IBD-0001-19883633
Originally published in the September 27, 2007 version of Investor's Business Daily
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