ST Microelectronics and Siemens Fighting Hard for Market Leader Position In Smart Card ICs Market
MOUNTAIN VIEW, Calif., Sept. 8 /PRNewswire/ via NewsEdge Corporation -- According to strategic new research conducted by Frost & Sullivan frost.com, Worldwide Smart Card ICs Market, the smart card ICs market is pacing at a CAGR of less than 10 percent until the year 2000, a significant change from the 20 percent and higher growth rates experienced in earlier years.
"Indeed, the smart cards market as a whole has hit a market canyon in its product life cycle. In some cases, IC manufacturers have met only 50 percent of their budget. In reaction to these difficult times, companies have had to readjust their business development and marketing strategies through a more focused methodology, rather than taking the scattered marketing approach popular in earlier years," explains Frost & Sullivan Industry Analyst Alyxia T. Do.
The 8 kByte, 8-bit MCUs are expected to hold their position as the dominant microcontroller segment, although card manufacturers are beginning to move to 16-kByte chips, due to a greater number of complex applications being written on top of operating systems and declining prices of the 16-kByte chips. Research revealed, however, that though card manufacturers talked enthusiastically of moving completely to 16-kByte chips, the actual transition in market implementation has been slower than expected.
Contactless chip markets have been another area of interest as their product line has expanded since the introduction of the Mifare standard chip in 1995. Though the hardwired logic memory chips should continue to dominate the market in transportation applications, a number of combi and dual- interface contactless chips have entered the market this year, showing that the combi chip product holds great promise in the market.
The leader in the smart card chip market remains Siemens Microelectronics, which held 43 percent market share in terms of revenues in 1997. The total market share breakdown for the smart card ICs industry is as follows:
Siemens 43%
ST Microelectronics 33%
Motorola 14%
Philips 6%
Hitachi 2%
Others 2%
Comments Analyst Do, "The rivalry between Siemens and ST Microelectronics, however, remains intense. We expect to see some aggressive movements in strategy by both companies, both in terms of product-line expansion as well as in price competition."
Indeed, the major issue in 1998 for smart cards ICs manufacturers is sharpened pricing competition which has directly resulted from the high cost of investment in new business development, a weakened demand rate, and increased rivalry from existing players vying for market share. For instance, the 8-kByte microcontroller prices have declined by as much as 40 percent from 1997 APS levels. Anticipated growth, however, in the GSM and health identification applications should counterbalance some of this price decline.
Frost & Sullivan is an international marketing consulting company that monitors the smart cards industry for market trends, market measurements and strategies. This ongoing research is utilized to update a series of research publications such as #5780-11 Worldwide Smart Card Application Markets, and to support industry participants with customized consulting needs.
Visit Frost & Sullivan's web site at: frost.com
Report: 5555-26 Publication Date: Sept. 1998 Price: $3450
For more information in the United States, please contact:
Kathleen Cooney
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SOURCE Frost & Sullivan |
