CCID Consulting: Review of China’s Smart Card Market in 2008 and Outlook for 2009

BEIJING, March 3 /PRNewswire-Asia/ -- CCID Consulting, China’s leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), recently released its report on China’s smart card market.

In 2008, although mobile communications cards’ shipment exceeded that of 2007, with the gradual maturity of the ID card market, the number of new cards issued has been decreasing sharply which limited the market’s growth. Affected by this, the sales volume of China’s smart card market had negative growth in 2008, which was the first time for the market to have negative growth in the past five years. In terms of application, mobile communication cards were still the largest application field in China’s smart card market, and would remain the most important sector in the long run. In non-telecom field, traffic cards and social security cards were picking up fast, and social security cards became the main driving force for CPU card market’s sales revenue to a certain degree.

Size of China’s Smart Card Market, 2004-2008

http://www.ccidconsulting.com/upload/14197.jpg

Source: CCID Consulting, Dec. 2008

Mobile Communications Cards Experienced Product Shift in 2008

In the past few years, mobile communications cards occupied the largest segment of smart cards, comprising SIM cards, UIM cards and PIM cards. SIM cards occupied a mainstream position among them, which were widely applied in the G network. In 2008, with the restructuring of China’s telecom industry, China Unicom’s C network merged into China Telecom, with China Telecom’s PHS users being gradually transferred to CDMA. However as China’s C network’s users was already shrinking in 2008H1, these new PHS users failed to drive a significant growth of UIM cards’ shipment as expected.

Compared with 2007, the largest change in China’s mobile communications card market was adding USIM cards, which are applied in TD network. Because China’s 3G network were still in its trial period, currently, only a few cities started to provide 3G network services. Although USIM cards’ shipment is not large, it broke through China’s mobile communications card market’s old structure.

ID Cards Market Brought Opportunities and Challenges to Local Manufacturers

By the end of Sep. 2008, the second phrase of smart ID cards’ had reached 750 million sets since Mar. 29, 2004. The promotion and application of second generation ID cards conformed to the trend of social informatization construction. This project not only injected vitality into China’s smart card market with rapid development in the past two years, but also provided powerful platform for China’s smart card industrial development. Because of this project, China’s domestic IC card design, manufacturing and assembly enterprises acquired enormous opportunities. IC design enterprises such as Datang Microelectronics Technology, CEC Huada Electronic Design, Tongfang Microelectronics Company and Shanghai HuaHong benefited from ID cards project, with surging sales revenue in the past two years. With regard to smart cards’ module assembling enterprises, Datang Microelectronics Technology, Shanghai Chang Feng Smart Card, China Electronics Smart Card, and Shandong Shanlv Electronic Technology also benefited from ID cards project. Besides, ID cards project’s promotion brought rare opportunities for China’s local smart cards read and write equipment manufacturers.

Although ID cards’ smart cards’ project’s promotion brought huge profits to manufacturers in China’s smart card industry chain, with the market’s maturity, many enterprises were affected by this situation, which considered ID cards project as support business, even some enterprises’ sales revenue had decline. ID cards project won business opportunities for China’s local enterprises; meanwhile, it also brought new challenges to these enterprises.

Smart Cards’ Technical Trend in the Future: Better Technology, More Functions

Currently, mobile phone is not only a simple communicator; the strengthening of data service functions and multi-media functions speed up new requirements for storage ability. As operators’ provide more services through their platforms, smart cards are very important for mobile phone users. The increase in storage capacities allow operators to integrate more customized services to smart cards. Smart cards using flash technology have the advantages of bigger capacity, faster speed, lower cost and power consumption, compared with intrinsic EEPROM storage unit technology. Flash technology has become mainstream technology of smart card chip manufacturing. With regard to chip manufacturing process, 0.13 um has been mainstream technology, and smaller size technology has been used in smart card ICs. For example, 65nm and 45nm technologies are used in NOR flash in high density SIM card solutions jointly developed by Intel and Infineon.

As smart card technologies and applications becoming more mature, smart card technology with single function and no compound product and integrated system integration solutions is unlikely to get a firm foothold in the market. Smart card with multiple functions has been the focus of major smart card companies. Function integration lies in the integration of smart card and mobile payment. Mobile phone will be the major application platform to smart card, and mobile payment will be an important part of mobile phone payment, which will not only promote the convergence of smart card and electronic money, but also bring new opportunities to smart card companies. On the other hand, security-monitoring and OA will be important applications. Smart card application will extend to personal identification and automatic management to facilitate enterprise informatization.

About CCID Consulting

CCID Consulting Co., Ltd. (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: 8235.HK), is directly affiliated with China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu, with over 300 professional consultants after many years of development. The company’s business scope has covered over 200 large and medium-sized cities in China.

Based on major areas of competitiveness: industrial resources, information technology and data channels, CCID Consulting provides customers with public policy establishment, industry competitiveness upgrading, development strategy and planning, marketing strategy and research, HR management, IT programming and management. CCID Consulting’s customers range from industrial users in electronics, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to becoming the No. 1 advisor for enterprise management, the No. 1 consultancy for government decisions and the No. 1 brand for informatization consulting.

For more information, please contact:

Cynthia Liu

Coordinating Manager

CCID Consulting Co., Ltd.

Tel: +86-10-8855-9080

Email: liuyan@ccidconsulting.com