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To: Jason W who wrote (20505)	6/30/2001 7:57:49 PM
From: FR1	Read Replies (2) \| Respond to of 60323

The forbes article says that Schlumberger (not Gemplus) has the inside track on smart cards. What do you make of the article? Schlumberger sounds like it is too far from being a pure play. Oil business will dilute any smart card profits, right? forbes.com It's not clear which type of card China intends to use, but if they're only for ID purposes, then the cheaper memory cards would be most likely. Smartcard players have been hoping for the Chinese government to announce plans like this for a long time. Market leaders like Gemplus (nasdaq: GEMP - news - people) and Schlumberger (nyse: SLB - news - people) will be among those angling to make the cards, along with firms like Oberthur of France*, and two German companies, Giesecke & Devrient and Orga. Vying for the business of making the chips that go into the cards will be semiconductor companies like Hitachi (nyse: HIT - news - people) of Japan, Infineon (nyse: IFX - news - people) of Germany, Swizterland-based STMicroelectronics (nyse: STM - news - people) and Atmel (nasdaq: ATML - news - people). The market for smartcard chips was worth about $1.2 billion last year according to a study by UBS Warburg. Chowdhary says Schlumberger and Orga are likely favorites to supply the cards, while Hitachi probably has the inside trade to supply the chips. All three have been putting a lot of effort into wooing the Chinese market. Hitachi was the number-three supplier of smartcard chips last year, behind Infineon and STMicro.