2018 forecasts: Eurosmart’s Secure element shipment forecasts confirm a global market increase in all main market sectors

2018 forecasts: Eurosmart’s Secure element shipment forecasts confirm a global market increase in all main market sectors

Eurosmart, the Voice of the Digital Security Industry, announced the 2017 figures for worldwide secure element shipments and the 2018 forecasts. The overall growth trend is confirmed in 2017 (+3.6%) while the 2018 forecasts exceed 10 billion units.

“Cybersecurity concerns help to promote the secure element in all the market sectors. When there is a need of protecting critical assets such as cryptographic keys, biometry or personal data against hackers, mafia and terrorists, a temper resistant secure element is the best adequate solution”
Stéfane Mouille, President of Eurosmart, said.

Contactless transactions remain the driving force in the financial service market. This will end locking the maximum amount to be paid when using contactless technology at the point of sale.

In 2017, the contactless solutions registered +3,6% growth, driven by the adoption of contactless payment, transit and eID cards with more than 2 billion units shipped this year; overall it is set to increase in 2018 by +5%, reaching 2.1 billion.

The financial services segment is the one showing the best trends: 3 billion secure elements are estimated to be shipped in 2017 as against 2.9 in 2016, with +3.4% growth.

Within the sector, Eurosmart forecasts a further increase in 2018, when the part of global contactless payments is expected to amount to 47,6% (1.5 billion units) in the total market of financial services, driven by Visa and Mastercard dual interface mandates.

In 2017, the trend for contactless technology secure element was 280 million of shipped units with an increase of +7.7% in relation to 2016 (260 million) and an estimate of 300 million shipments in 2018 (+7,1%).

The demand for secure element shipments in the Government-Healthcare sector rose from 460 million in 2016 to 485 million in 2017, with an estimated increase of +7,8% in 2018 (510 million) crossing the percentage growth rate shown between 2016 and 2017 (+5,4%).

“The new generations of eID schemes, the launch of the eID notification with the eIDAS Framework in Europe and the introduction of eID in new regions like the African area are stimulating the demand in 2018. The recent Commission proposal for a regulation will foster the contactless secure element in all national identity cards in Europe, once adopted” Mouille explained.

Trends for device manufacturers, mainly composed of high end smart phone manufacturers, became significant in 2017 with 400 million embedded Secure elements. The growth is important and equal to +21,2% compared with 2016 (330 million of units) and 470 million units are expected in 2018, according to Eurosmart forecasts.

The embedded secure element registered an encouraging rise, due to an increased demand for wearables and new generation smartphones. These figures show the success of these means: they confirm our forecast for 2016 and 2017, anticipating that for 2018.

“The deployment of Secure elements in highly critical infrastructures is a valid example. Four years ago, the embedded Secure elements did not exist in all smartphones.” – Mouille added – “Now, they represent the 5% of the global market”.

The telecommunication and IOT connectivity market is slightly improving: it approximately earned +1% and in any case, it is still constituting about half of the global market with 5.6 billion units. We can note that a strong increase was registered for the Industrial IOT connectivity and security, which are largely driven by the M2M market, including automotive and smart meters.

Many consumers have already replaced the PIN code to unlock smartphones with biometrics, to make mobile and contactless EMV cards payments more secure. By combining the biometric identification with the payment instrument in a correct manner, security can be maximised without impacting the ease of use of existing infrastructures.

“Cardholder keeps his identity under his sole control” – Mouille states – “Biometric template & matching engine are stored and computed securely on the Secure Element, making this technology GDPR ready from the design”.

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 Worldwide Secure Elements forecasts: 2016-2018

millions of units – source Eurosmart 2018

2016 2017 2018f 2017 vs 2016% growth 2018 vs 2017% growth
Telecom* 5450 5600 5600 2,75% 0,00%
Financial services 2900 3000 3150 3,45% 5,00%
Government – Healthcare 460 485 510 5,43% 5,15%
Device manufacturers** 330 400 470 21,21% 17,50%
Transport 260 280 300 7,69% 7,14%
Pay TV 120 100 95 -16,67% -5,00%
Others*** 90 90 90 0,00% 0,00%
Total 9610 9955 10215 3,59% 2,61%

*MNOs (secure element with a SIM application)
**Device manufacturers represent Original Equipment Manufacturers of mobile phones, tablets, navigation devices and other connected devices without SIM application (Embedded Secure Element without SIM application)
***Others include physical and logical access.

Worldwide Contactless Secure Elements forecasts: 2016-2018

millions of units – source Eurosmart 2018

2016 2017 2018 2016 vs 2015
% growth
2017 vs 2016
% growth
2018 vs 2017
% growth
Financial services 1300 1400 1500 6,56% 7,69% 7,14%
Government – Healthcare 270 285 300 8,00% 5,56% 5,26%
Transport 260 280 300 13,04% 7,69% 7,14%
Others*** 70 n.a. n.a. n.a.
Total 1900 1965 2100 7,34% 3,42% 6,87%

***Others include physical and logical access cards

Worldwide Contactless Secure Elements forecasts: 2016-2018

Million of units – Source Eurosmart 2018

WW shipment forecast 2016 2017 2018
forecast
2017 vs 2016
% growth
2018 vs 2017
% growth
NFC SIM + embedded secure elements 500 548 620 9,60% 13,14%

NFC SIM & embedded Secure Elements include NFC UICC Secure Element; Embedded Secure Element and Embedded UICC