Eurosmart’s secure element shipment forecasts confirm a stable and mature market

Eurosmart, the Voice of the Digital Security Industry, announced the 2019 and 2020 forecast figures for worldwide secure element shipments. A stable and mature market is confirmed with shipments exceeding 10 billion units in 2019 and 2020.

“Secure element is a key solution to protect the blooming market of the Internet of things. While Internet of Things active connections are projected to reach 25Bn by 2025, there is a real opportunity to increase the security level of devices thanks to the demonstrated reliability of the secure element.” Stéfane Mouille, President of Eurosmart said.

Financial Services

In 2019 the overall growth is estimated to reach +4.4%, which represents 140 million new cards being placed on the market. Region-wise, the market is driven by a strong demand from North America and South-East Asia thanks to a mix of renewal and migration.  Fintech companies also support this demand providing a growing number of payment cards to their customers.

Technology-wise, demand for contactless cards is the main driver in this sector, where +24% YoY growth is expected. User convenience supports the massive migration to contactless technology in some regions. The overall share for contactless cards is estimated at 61% in 2019. The deployment of broader contactless infrastructure enables the increased demand of contactless technology.

In 2020, a stable market, supported by the demand for contactless, is expected. Nearly two out of three payment cards issued will be contactless, with a trickle-down effect from major banks to TIER 2 financial institutions.

Telecom

Along with regulations on SIM registration, consolidation of MNOs – which is impacting an already mature market –, Eurosmart foresees lower demand for 2019 representing about 5.4 billon units shipped. For 2020, demand is expected to show a flat development since 5G is not deployed enough to have any significant impact on the SIM market (+0.9% YoY).

The embedded UICC is expected to reach over 200 million shipments this year with trend sustained by an accelerated adoption of embedded SIM technology driven by factors such as the launch of flagship products by leading OEM manufacturers, and standardisation on remote provisioning.

Device Manufacturers

Despite the weak growth of smartphone shipments, a positive trend is observed in most advanced countries. 465 million eSE will be shipped in 2019 and the growth is to continue in 2020 (+7.5% YoY).

Mobile payment has been increasing in popularity, smartphone OEM mobile wallet programmes are blooming across the globe. Wearables are also seen as a convenient form factor for payment and mass transit.

Government

The sector sustains an accelerated growth (+8% expected in 2019), driven by the implementation of many identity programmes and product renewals around the globe. World Bank’s initiative to influence the adoption of identity documents that may include SE, especially in emerging regions such as Africa and Middle-East, would stimulate the demand on the long term. The increasing number of cross border travels explains the demand of travel and identity documents.

Contactless interface has become the leading choice for governments. This trend is expected to reach 62% share of total shipments in 2019 and will continue in 2020. The recent adoption of the European Citizen’s ID and resident cards format which include contactless interface shall stimulate the demand in the coming years.

Industrial and automotive IoT

A continuing growth for the M2M market driven by a push for connectivity in the automotive sector and other industrial segments is expected.

Shipments of secure elements for connected cars and smart meters using cellular connectivity will reach around 130 million in 2019. This growth is likely to continue in 2020.

Eurosmart estimated WW µP TAM – (Mu)

*        MNOs (secure element with a SIM application)

**      Device manufacturers represent Original Equipment Manufacturers of mobile phones, tablets, navigation devices, wearables and other connected devices without SIM application (Embedded Secure Element without SIM application)

***    Others include physical and logical access.

Eurosmart estimated WW µP TAM – (Mu) Contactless

Eurosmart estimated WW µP TAM – (Mu) Industrial IoT

*Industrial IoT: SIMs, eUICC, M2M form factors (MFF2, …) currently limited to M2M usage in automotive, smart meters.