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Smart Card and Embedded Security Market

Smart cards became more embedded within everyday life for most consumers in 2009. In total, 5.2 billion micro-controller and memory-based smart cards shipped into applications such as mobile device SIM cards, payment and banking, government ID, and transportation.

At the same time, the smart card related integrated circuit (IC) semiconductor market was worth $1.7 billion, according to the latest market study by ABI Research.

On the card side, Gemalto maintained its position as the number one manufacturer, with an estimated 33.8 percent market share, while Morpho (previously Sagem Orga) gained the most market share (up 1.8 percent) to consolidate its fourth position.

Meanwhile, with 26.3 percent, Infineon continued to account for the most revenue among the IC manufacturers while in unit terms, Samsung's strong position in SIM cards saw it capture 34 percent of IC volumes.

Principal analyst John Devlin at ABI says, "Last year's market conditions were unusual. While the smart card market largely weathered the recession in terms of consumer demand, the IC market took a hit on two fronts."

First, both card manufacturers and issuers ran down their inventories as they assessed the impact of the credit crunch. Second, price pressure increased greatly as IC manufacturers looked to fill plant capacity and maintain orders. Combined, these factors saw the value of the market fall by more than was expected.

New revenues are coming from contact-less or dual-interface cards and more applications require the greater security offered by smart cards. There remains a small but solid memory-based market but higher-end secure micro-controller ICs and embedded solutions are driving the new growth.

As a result of this and re-stocking inventory, ABI forecasts that IC revenues will grow nearly 14 percent in 2010.

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