The global smart card materials market trends are slated to be propelled by the increasing demand for smart cards across different sectors including the BSFI, given the product’s superior security features. Besides, growing cashless transactions worldwide and prominence of digital wallets are as well likely to foster the smart card materials demand over 2022-2028.
Smart card materials are chemical compounds that are used in the production of a smart card. These chemicals enable manufacturers to insert and information over the smart card. Furthermore, they also allow producers to experiment with the strength quality of cards, making them safely accessible for the general public.
Expanding scope of smart card materials market across the telecommunication sector is another crucial factor supporting the industry expansion through 2028. These materials are used in the manufacturing of universal integrated circuit cards in mobile phones and SIM. Moreover, the demand is further being impelled by the rising penetration of NFC-enabled mobile applications and payphones.
However, volatility of raw material prices that are used as chemicals for smart cards production is estimated to restrict the growth of the overall business over the analysis time frame. In addition, fraudulent activities and security issues are poised to challenge market growth in the foreseeable span.
Based on the types of smart cards, multi-component smart cards are projected to garner significant gains through 2028. These cards boast the ability to process complex calculations and store data that can be used in contactless or contact cards. This eventually facilitates reduced transaction time and faster processing speed. Also, multi-component cards are designed for a specific market solution and are thus extensively adopted across diverse sectors like telecommunication, healthcare, retail, and BFSI.
Considering the material, acrylonitrile butadiene styrene (ABS) segment would grow notably through 2028. The mechanical properties of ABS are good for impact resistance even in low temperatures. The material is polymerized alloy normally formed by injection molding. In addition, ABS cards boast high print quality making them an ideal material for graphic-heavy card applications like ID cards for universities and branded access cards.
Regionally, global smart card materials industry is gaining prominence across the Asia Pacific economies. This can be ascribed to the expanding telecommunications sector and surge in the digitization trend across different Asian economies. Countries like China, India, Japan, and South Korea are witnessing substantial adoption of smart card products like debit or credit cards, ID recognition cards, and gift cards. Furthermore, rising digitization initiatives by the various central governments would potentially support the regional market expansion in the coming years. For instance, in 2021, the Ministry of Industry and Information Technology, China, announced a 5-year plan to accelerate the integration of digital and real economies to push the country’s industrial development by 2025.
Global smart card materials industry is highly concentrated and boasts the presence of prominent players including SABIC Innovative Plastics, BASF SE, PetroChina Company Limited (China National Petroleum Corporation), Eastman Chemical Company, LG Chemicals (LG Corp), Solvay SA, Teijin Ltd, and others.
These solution providers are involved in different strategies like mergers and acquisitions, partnerships, and product launches to gain a competitive advantage over others in the overall marketplace.
The outbreak of SARS-CoV-2 infection during 2020 has had a debilitating impact on the overall smart card materials market. This is owing to the fluctuations in the raw material prices and decline in the sales of smart cards and movement restrictions imposed by various governing bodies worldwide. Closure of retail stores and decline in the transportation sector had further affected the market dynamics.