Escalating smart card applications are giving a boost to Asian smart
card vendors. Security-related smart card applications coupled with the
low labor and materials’ cost in Asia, drive local smart card and
silicon vendors to deliver cost-effective, high-end products and value
New analysis from Frost & Sullivan Profiles of Local Companies in
the Smart Card Value Chain in Selected Asian Countries reveals that the
explosive growth of the smart card market in Asia Pacific has resulted
in an emerging pool of local vendors. These include silicon vendors,
smart card and reader manufacturers, and system integrators. A large
proportion of these vendors are serving the regional market effectively,
and further driving the growth in the region.
“The Asian smart card market is witnessing an increase in the
number of regional participants in various segments of the value chain, from
manufacturers to system integrators. These local vendors have an
advantage — particularly in large-scale government projects,” says
Frost and Sullivan Industry Analyst, Michelle Foong. She adds, “Apart
from understanding the economic policies and other rules and regulations
of the regional market, the local companies also share close business
ties with the governments of their region, which further strengthens
In addition, the increasing use of smart cards in government
projects drives market growth. This enables smart card vendors in Asia
to reach higher profits. Manufacturers in Asia are fairly protected by
the local economic policies that allow them to operate and profit in a
relatively sheltered environment. As a result, smart card vendors in
Asia are less motivated to invest in R&D and innovative high-end
products as compared with their European competitors.
However, since Asian companies in Asia lack brand recognition
globally, the competition from international vendors is proving to be a
credible threat, forcing them to invest more in upgrading their R&D
facilities and delivering more high-end products.
“With growing opportunities in various applications such as
enterprise security, transportation and banking, companies in Asia are
likely to exploit their ties with international partners to penetrate
overseas markets,” notes Foong.
Further, expansions in mobile communications, contactless payments
as well as the mass deployment of Europay, MasterCard, Visa (EMV) in the
Chinese and other Asian markets are likely to help Asian smart card
manufacturers and integrators garner significant revenues.
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