Dataquest Forecasts Worldwide Chip Card Market to Quadruple In Five Years.

SAN JOSE, Calif.--(BUSINESS WIRE)--Sept. 17, 1996--As consumers try to simplify their lives with one card to handle their banking and shopping needs, the worldwide chip card market is expected to thrive with shipments growing from 774 million units in 1996 to 3.4 billion units by 2001, according to Dataquest. The top-selling region for chip cards is Europe, which accounted for 90 percent of chip-card sales in 1995. Dataquest analysts expect other regions to offer more of these cards this year.

"Although some standards issues, infrastructure issues, and software issues remain to be resolved, chip cards hold the promise of being one of the world's highest-volume markets for semiconductors," said Jonathan Cassell, industry analyst in Dataquest's Semiconductor Application Markets Worldwide program. "They can perform the duties of pocket change, paper money, and debit and credit cards, acting as a means of identification, access, or payment. Thus, chip cards insert semiconductor technologies into areas where they have never been before, providing a new frontier of growth for IC makers."

The market is currently dominated by low-cost EEPROM and EPROM-based memory cards, but the fastest-growing area is in microcontroller-equipped smart cards. The smart card market reached 84 million units in 1995, and it's forecast to reach 1.2 billion units in 2001 (see Table 1). -0-

Table 1
Worldwide Chip Card Shipment Forecast
(Millions of Units)
                              1995       1996       1997       2001
Smart Cards                     84        156        270      1,188
Memory Cards                   461        618        881      2,228
Total Chip Cards               545        774      1,151      3,416
Source: Dataquest (September 1996)

A chip card is a flat, plastic card, the size of a credit card, that has one or more integrated circuits on board. A smart card is a chip card that has microprocessor or microcontroller on board. Smart cards offer more usefulness to consumers and high revenue to card makers and their semiconductor suppliers. Memory cards don't have a microprocessor or microcontroller but may include other types of logic on board, such as security or cryptography functions.

The Dataquest Focus Report titled "The Exploding Market for Chip Card Semiconductors," outlines the future for chip cards. The report provides a detailed forecast, regional growth, analysis of the top vendors, and an explanation of standards, software, and infrastructure for the chip card market. To purchase this report, or to subscribe to the Semiconductor Application Markets Worldwide program, please call 800-419-DATA.

Dataquest will examine the major issues facing the semiconductor market during its 22nd annual semiconductor conference titled "Semiconductor '96: Let the Games Begin." The two-day conference will be held October 24-25 at the Renaissance Esmeralda Resort in Indian Wells, California. Dataquest analysts and industry executives will forecast where the market is heading and how companies can maintain their competitive advantage. For registration or press pass information, please contact Ann Fitch at [phone].

More information about Dataquest's programs, descriptions of recent research reports, and full text of press releases can be found on the Internet at http://www.dataquest.com.

Dataquest is a 25-year-old global market research and consulting company serving the high-technology and financial communities. The company provides worldwide market coverage on the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the information technology industry. Dataquest is a Gartner Group Company.

CONTACT: Tom McCall, 408/468-8312

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