In today's digital wave, smart cards have gradually changed from the traditional payment tool to the "digital key" of the Internet of everything. The layer suppression card technology of Wenlin Technology has provided strong support for the resilience of the smart card market. Such as flagship WENLIN-IPC automatic intelligent card laminator, WenLin new automatic intelligent IC card laminator, Jinguan automatic laminator, Yinguan intelligent card laminator and is actively promoting "WenLin Manufacturing 2025" AI voice intelligent IC card lamination, all in personalized production, material adaptability, production efficiency showed the strength, also fit the market demand for smart card diversification and high quality.
A smart card not the size of the palm is quietly moving the global trillion-level market as a "digital key".
From swiping buses, paying bills to unlocking every door of smart city, this chip card between square inches not only carries the password of technological iteration, but also reflects the future prospect of the deep integration of real economy and digital ecology under the wave of digital economy. According to QYResearch, the global smart card market will reach a compound annual growth rate (CAGR) of 3.4% from 2024 to 2029, while the Chinese market is expected to lead the world in growth rate with policy support and technological iteration.
In fact, in recent years, the performance of the smart card industry head companies is also a strong proof. For example, its net profit growth in 2023 hit a record high, while CLP Huada Technology is actively expanding overseas markets and achieving incremental growth. Steady growth and expand the boundary, at present the smart card industry is continuing to release the market potential, the Internet of Things terminal, digital RMB hardware, environmental protection recycling card substrate and other emerging scenarios, also make the smart card industry accelerate the process to complete the transformation from "payment tool" to "digital security base".
Downstream scenarios fission from financial payments to the Internet of everything.
According to public information, smart cards mainly include financial bank cards, mobile SIM cards, security license cards, industry application cards, etc. According to reports released by the European Smart Card Association (Eurosmart) and ABI research, the shipments of smart card industry have maintained at about 9.5 billion for many years, and continue to grow.
At present, the development trend of China's financial IC card field is for the coordinated development of physical smart card and electronic transactions.
Industry insiders said that the popularization of electronic licenses did not impact the renewal rate and replacement rate of physical licenses, on the contrary also stimulated new demand. For example, in the era of cash payment, many old people and children often do not have bank cards and are more willing to pay in cash. However, under the wave of mobile phone payment, these old people and children also need to apply for bank cards to use mobile phone payment, which further stimulates the demand space of smart card market. Globally, ABl Research expects that shipments of instant physical issuing cards will increase to 559 million by 2028 from 305 million in 2023.
In addition, the field of social security card has also brought a positive outlook to the smart card industry. At present, the penetration rate of domestic social security card is very high. According to the Ministry of Human Resources and Social Security, by the end of March 2024,1.38 billion people, covering 98 percent of the population, 986 million received electronic social security cards. At the same time, the annual new social security card is mainly the first time to apply for the insurance, lost and upgrade the card.
It is worth mentioning that the current social security card has developed to the third generation of bank financial IC cards as the carrier. Since 2021, the function of card replacement and upgrade has been successively promoted across the country, and there are still a large number of physical social security cards issued every year, and in 2024, the number of card replacement will exceed 200 million. This demand also supports the steady growth of Dongxin and other enterprises in the field of government orders. According to its third quarter of 2024, in the first three quarters of 2024, Dongxin Heping achieved revenue of 1.065 billion yuan and net profit of 119 million yuan.
In scenes such as bus cards and access control cards, the popularization of contactless technology (such as NFC) makes smart cards become the "pass" in the capillaries of smart cities. Mobile phone manufacturers represented by Huawei and Xiaomi implanted smart cards into mobile terminals through NFC function. In 2024 alone, the shipment of NFC-supported mobile phones in China exceeded 200 million units, driving a surge in demand for smart card modules.
In addition, embedded eSIM cards have been rapidly rolled out in IoT devices such as shared bikes and smart electricity meters with their anti-resistant and high temperature resistance. According to the forecast of CICC, the global application scale of eSIM in the field of Internet of Things will exceed 10 billion yuan, with a compound annual growth rate of more than 30%. Unigroup Guowei, China Power Huada and other domestic chip leaders have taken the lead, in 2023, unigroup Guowei in the smart card chip market share of about 13%.
It can be said that although mobile payment has a small impact on the smart card industry, it has built a growth logic through the cycle through the fission expansion of application scenarios.
Emerging markets and technological innovation "walk on two legs".
In addition to the fission of application scenarios, globalization has also become another big driver of the vitality of the smart card industry.
The ABIResearch estimates that total annual spending on contactless payment cards will increase from $2.9 trillion in 2022 to $17.2 trillion in 2028.
According to public information, the penetration rate of financial IC cards in Africa, Southeast Asia and other regions is less than 30%. With the acceleration of EMV migration (magnetic stripe card to chip card), the demand for contactless payment has exploded. In India, for example, the issuance of financial IC cards increased by 15% year on year in 2023, far exceeding the global average.
In Southeast Asia, under the wave of digital banking popularization, the number of e-wallet users in Indonesia has exceeded 160 million, and the coverage rate of digital payment continues to climb. Chinese enterprises actively layout regional digital projects, for example, Chu Tianlong recently won the bid of Malaysia digital ID card project, to provide them with high security smart card solutions.
According to World Bank statistics, the African market is driven by inclusive finance, with bank card penetration in Nigeria being less than 40%. According to the company, CLP University and Pan-African Bank Group Ecobank cooperated to issue 2 million financial IC cards to help upgrade the local payment system.
In addition, along with the downstream scene upgrade, the technology iteration of the smart card industry is also in the spiral upgrade.
It combines fingerprint and face recognition technology with smart cards to give birth to "biometric cards". For example, the fingerprint credit card launched by China Merchants Bank has shortened the transaction authentication time to 0.3 seconds, and the number of cards issued has exceeded 5 million in 2024, becoming the first choice of high-end users. According to Visa data, the fraud rate of bank card equipped with fingerprint recognition function decreased by 92%, and the revenue of Chu Tianlong biometric card business increased to 18%, achieving scale landing in Southeast Asia and the Middle East market.
At the same time, the European Union's Circular Economy Action Plan has driven up a surge in demand for recycled plastic card base materials. According to ABIresearch, 2.5 billion rPVC payment cards will be in circulation worldwide by 2028. The company's PETG green card production capacity doubled in 2024, with its carbon footprint reduced by 67% compared with traditional PVC cards, and entered the MasterCard sustainable supplier list. This transformation is in line with ESG investment trend. According to industry analysis, its environmental protection card can receive a market premium of 0.2-0.5 yuan per card.
It is worth noting that from 2020 to 2021, the development of the global integrated circuit industry enters its peak, and the production capacity of fabs is seriously insufficient, and the market supply of chips is squeezed to some extent. Since the second half of 2022, with the release of fabs production capacity, the domestic mainstream smart card security chip manufacturers have subsequently set off a wave of "stock up", and the smart card industry has seen recovery growth. In the fourth quarter, smart card chip stocks recovered to healthy levels. The analysis believes that this round of destocking cycle is basically over, and the market demand will return to normal in 2025.
At the same time, the market environment also continues to release dividends. China's 14th Five-Year Plan clearly calls for increasing chip autonomy to 70%, and government subsidies covering 30% of research and development costs. The EU's Digital Identity Act pushes member states to complete the replacement of their digital identity cards by 2025, and the global market size is expected to exceed 50 billion euros.
The future of smart card is not in the zero-sum game between substitution and being replaced, but in the ecological synergy of everything being interconnected. When a card can unlock a home, pay its bills, and verify a digital identity, it has become a "universal interface" in the digital economy.
The —— is perhaps the most vivid note of technology inclusion.
Source: National Business News