IC card, also known as smart card, smart card, microcircuit card or microchip card, is a card form made of the microelectronics chip embedded in the card base in line with the ISO7816 standard. In recent years, the acceleration of China's urbanization process has promoted the government and private enterprises to launch widely applicable smart card solutions. For example, first-tier cities such as Shanghai and Beijing have adopted electronic payment methods on a large scale in the public transport system, and realized the one-card passage of subway, bus, parking lot and other scenarios through the "traffic co-branded card". According to statistics, in these two cities alone, more than 80% of residents hold and use such one-card cards for daily travel and consumption. In addition, the domestic campus smart card, mobile SIM card, medical card, store membership card and other IC card application demand continues to grow, continue to promote the expansion of the industry scale. By 2023, the scale of China's IC card industry has increased from 9.59 billion yuan in 2018 to 12.98 billion yuan, and the market size is expected to exceed 14 billion yuan in 2024.
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Next, WenLin led everyone to understand the current situation of the IC card industry.The following is reproduced QYR market research.
1.Industry overview
IC card (Integrated Circuit Card), also known as smart card (Smart Card), smart card (Intelligent Card), microcircuit card (Microcircuit Card) or microchip card, is the microchip embedded in the card base in the ISO7816 standard. The communication between IC card and reader can be contact or non-contact. According to the chip type, IC card can be divided into storage card, logical encryption card and CPU card; according to the application field, it can be divided into financial IC card, financial IC card, bank IC card, second-generation ID card, bus IC card, subway card, parking toll card, etc.; according to the data transmission form, it can also be divided into contact IC card, non-contact IC card and dual-interface IC card.
IC card has the characteristics of small size, easy to carry, large storage capacity, high reliability, long service life, confidentiality and strong security. Its concept originated in the early 1970s, the French company first launched IC card products in 1976, and applied it to finance, transportation, medical, identification and other industries, combined with microelectronics technology and computer technology, greatly improved the modernization of people's work and life.
The manufacturing process of IC card includes seven steps: system design, chip manufacturing, grinding, wafer cutting, micromodule, card manufacturing, card initialization, and processing and issuing. The system design covers integrated circuits and software design, while chip manufacturing makes and tests circuits on monocrystalline silicon wafers, then cut into multiple small chips and mounted on printed circuit wafers with eight contacts to form micromodules. In the card manufacturing stage, the micromodule is embedded in the card, and the surface printing is completed, then the card is initialized to ensure security, and finally, the card is personalized through the reading and writing device, and the relevant information is written and issued.
From the perspective of industrial chain, the upstream of IC card industry mainly includes chip design and manufacturing, card base materials, IC card manufacturing and issuing equipment and IC card reading and writing terminal manufacturing; the middle is the manufacturing and issuing of IC card manufacturing and issuing, as well as the development and construction of smart card application system; and the downstream involves IC card application in the fields of banking, telecommunications, social security, transportation, health, education, business and so on.
2.industry status quo
With the increasing maturity of smart card technology, its application fields are also increasingly extensive, covering mobile communication, financial payment, identity identification, public utilities and other fields, including telecom card, bank card, social security card, ID card, bus card, refueling card, access control card, etc., which greatly facilitates people's work and life. In the global smart card market, the application of telecom SIM accounts for as high as 54%, the financial sector accounts for about 30%, and the government and residential health sector account for a relatively small proportion, totaling 4.5%.
In daily life, bank cards, credit cards and debit cards are the most common forms of IC cards. The telecom industry is becoming smarter through products such as SIM cards. Bus cards and subway cards in the transportation sector make it easier for the public to travel. In the medical and education industries, IC cards are also seen as an important tool to improve service quality and management efficiency. In the context of the digital transformation of the global economy, IC card, as a solution for identity management and information security in various industries, is becoming more and more prominent, and the industry has shown great development potential. At present, the global IC card industry has entered a mature development stage, the market size continues to grow. According to QYResearch data, the global IC card industry has increased to $33.3 billion in 2023, up 11.11% year on year.
In China, with the acceleration of the urbanization process, the government and private enterprises have also launched a number of smart card solutions. Taking Shanghai and Beijing as an example, the public transport system of these cities has adopted electronic payment methods on a large scale, and through the "co-branded" traffic card, it has realized the passage of subway, bus and parking lot. In addition, the domestic campus smart cards, mobile SIM cards, medical cards, store membership cards and other IC cards applications demand also continue to grow, promoting the expansion of the industry scale.
3.Key enterprises
Chu Tianlong Co., Ltd. was established in 2002 and listed on the Shenzhen Stock Exchange on March 22,2021. The stock is referred to as "Chu Tianlong". Chu tianlong is an industry leader focusing on digital security and digital services, intelligent hardware and integrated solutions, system platform and operation services. The company has been deeply involved in the development of government services, financial technology, social security, mobile communication, transportation, information security and other industries, and has built a business system based on embedded software and secure payment products, and extended with intelligent hardware, software and service integrated solutions. In terms of embedded security products, embedded security products, The embedded security products represented by smart card are widely used in communication, financial payment, social security, transportation and other fields with physical security protection, identity identification, privacy protection, communication and payment and other functions.
Since 2024, Chu Tianlong has continued to maintain a high market share in the traditional smart card field by virtue of its rich experience in COS system development, advanced manufacturing level and large-scale operation advantages. The company has successively won the bid for the financial IC card project of the head office of a number of state-owned commercial banks and national joint-stock banks, the third generation social security card project in many provinces and cities across the country, and successfully won the project of many issuing institutions of Beijing Minsheng Card. At the same time, the company continues to maintain the share in the three basic telecom enterprises and China bidding USIM card and Internet of Things card, seize the super SIM card business opportunities, to research cooperation enabling business integration development, actively carry out quantum communication dual application development, to lay a solid foundation for mass issuance. In addition, the company also gives full play to the advantages of multi-industry and cross-field services, and expands the market resources in the transportation field through one card and multiple application product solutions. During the reporting period, the company followed the development trend of the industry, made a series of achievements in low carbon environmental protection and product innovation, obtained Mastercard CEC card ecological certification, ISO energy management system and product carbon footprint certification, obtained Mastercard and Visa card rPVC (recycled PVC) environmental protection product qualification, and actively practice green finance. However, data show that in the first half of 2024, the sales revenue of Chu Tianlong embedded security products was 411 million yuan, down 28.58% year on year.
Eastin Peace Technology Co., Ltd. was founded in 1998 and listed on the Shenzhen Stock Exchange in 2004. The stock is referred to as "Eastin Peace". The company's main business for smart card and digital identity security business, has covered mobile communications, financial services, government public utilities smart card products and services, as well as consumer electronics, industry, Internet, and other fields, can provide digital identity security solutions and vertical industry Internet of things overall solution. The company has provided products and services to customers in more than 80 countries and regions.
In terms of smart card business, its business mainly comes from three fields: mobile communication, financial services and government public utilities. In the field of mobile communication, Dongxin Heping has become the main communication product supplier of the four major domestic operators, providing products and services for operators in more than 60 countries and regions around the world, and the number of issued cards ranks among the best. At the same time, the company is actively participating in the research and development and promotion of new technologies and products such as new generation communication, 5G SIM, Internet of Things, mobile payment and so on, which can provide cutting-edge various types of smart cards in the industry. In smart card business sector, east letter peace main products include special SIM, NFC SIM, 5 GSIM, USIM, financial IC card, digital hard wallet card and reading and writing equipment, industry technology, innovation process, high-end custom card, resident identity card, social security card, bus connectivity card, electronic passport, residents health card, ETC card, disabled card, etc. According to QYResearch data, in the first half of 2024, the sales revenue of its peace smart card products was 544 million yuan, up 1.27% year on year.
4.trend in development
Technological evolution is accelerating
Take telecom SIM card as an example, with the development of mobile communication technology, SIM card is also constantly evolving, from the first generation of SIM card has evolved to 5G SIM card. Every upgrade of communication technology will bring users to SIM cards. In the future, there are two parallel development trends of telecom SIM cards: one is the pluggable SIM cards suitable for mobile phone terminals to store address book and operator and user identity information data. In recent years, mobile SIM cards are also expanding into new features, such as large-capacity SIM cards that can partially replace mobile memory, as well as super SIM cards with high-performance financial payment capabilities. Second, the embedded eSIM widely used in the Internet of Things, eSIM card is directly welded on the equipment circuit board, which is more firm than the pluggableSIM card, can withstand high and low temperature, earthquake resistance, dustproof, and supports remote configuration through the air writing card, can flexibly choose the operator network. At present, eSIM embedded cards are mainly used in wearable devices, mobile electronic devices (such as shared bikes), and public electronic facilities or terminal devices with the demand for remote Internet communication. It is one of the most basic and core components of the Internet of Things, with huge application space and rapid market development. With the acceleration of IC card technology evolution in various fields, it will bring new opportunities for the development of the industry.
IC card application field continues to expand
With the continuous progress of communication technology and the further improvement of basic telecommunications facilities, the trend of electronization and informatization in various industries in the world is becoming more and more obvious, and the emerging application scenarios are being continuously explored. The application of IC card is not only limited to the traditional fields of finance, telecommunications, transportation and other fields, but also gradually covers tax, refueling, water and electricity management, vehicle management, medical care, social insurance and other fields. The continuous deepening of the application requirements will promote the continuous iteration and upgrading of the smart card products.
The IC card penetration rate in emerging developing countries is low, which may become a new growth point in the future
The popularization of IC cards needs to go through the process from meeting the basic rigid demand to gradually upgrading to the value-added service demand. Therefore, IC cards are usually preferentially applied to bank cards, telecom cards and other daily life rigid demand scenarios. Countries represented by western developed countries and China have entered the stage of upgrading the IC card from the rigid demand to the demand for value-added services, while most developing countries are still in the initial stage of smart card popularization, and the penetration rate of IC cards is low. Due to the huge population base of developing countries, with the continuous improvement of telecom infrastructure and the further expansion of the application field of smart cards, the demand for IC cards will be greatly increased, and it will become a new growth point of the global IC card industry in the future.