From information transfer to contactless payments to security, NFC chips have emerged as an ideal authentication and data protection solution. The near field communication chips market has witnessed significant expansion over the years, owing to innovative applications of NFC technology across industries.
Considering the rising application of NFC chips, numerous companies are embedding them in consumer electronics, especially smartphones. For instance, Google Nexus and HTC mobile include NFC chips that ensure data security with the help of encryption. Additionally, the COVID-19 outbreak led to a surge in smartphone penetration, resulting in high volume sales of around 2.2 billion NFC-enabled smartphones in 2020. Estimates indicate that NFC tags are estimated to prove beneficial in various applications, including TV, Wi-Fi router, and fridge, given the rising trend of contactless operations.
Triton Market Research estimates that the global near field communication (NFC) chips market will advance with a CAGR of 12.99%, reaping revenue worth $7.47 billion by 2028.
Market Expansion by Application
Application plays a major role in influencing buyers’ behavioral patterns. Over the years, the use of NFC chips has evolved, ranging from contactless payments to advanced logistics to consumer engagement. In this regard, the end-users, especially automotive, consumer electronics, and retail sectors, compare various chips as per their application range and cost. This has led companies to invest heavily in R&D to expand their footings. For instance, Broadcom Corporation launched an NFC chip into the automotive product line to effectively connect mobile devices to vehicle infotainment systems.
Major application areas that widen the scope of the NFC chips market:
- Smartphones capture a significant share in the near field communication chips market. Technological advancements and R&D activities in NFC chip-enabled devices have contributed to the smartphone segment growth. The NFC chips are used to ensure secure and short-distance communication. As a result, several prominent players are expanding their product line with NFC chips. For instance, NXP Semiconductors launched a single-die chipset that features NFC technology for smartphones as well as IoT devices, tablets, and laptops.
Another company, Thinfilm Electronics ASA, raised over $110 million to boost NFC technology in consumer electronics, such as smartphones and other devices. This indicates the consumer electronics sector to secure a major share in the vertical segment.
- Near field communication chips have emerged as a vital addition to medical devices and equipment, owing to their ability to swiftly and efficiently transfer health data. The market scope has grown with NFC chips embedded in weight scales, blood pressure monitors, and glucose meters. Moreover, the NFC tags’ implementation as electronic health records to store patients’ medical history, prescriptions, and real-time data has created a profitable market for NFC chips in the medical vertical.
The Automated Assemble Corporation, for instance, launched technologically-advanced NFC tags to store crucial patient data, helping medical staff to update treatment records regularly while creating automated time stamps for patients.
- While near field technology has secured a higher share in the consumer electronics and medical segment, its adoption in logistics and aviation is expected to widen the market’s scope over the forecast period. In this regard, NFC tags and RFID chips are integrated into goods to prevent thefts during transportation, identification, and tracking. The smart ticketing application has also driven NFC chips’ adoption rate for seamless transportation. For example, Go North East invested approximately $2.28 million to influence NFC chips adoption for contactless ticketing services.
Regional Market Analysis | Growth Position
China and India are estimated to emerge as the fastest evolving countries in the Asia-Pacific near field communication chips market. This robust growth is on account of rising government programs for digital transactions. As per the World Economic Forum, the Chinese government launched the Green Finance Project to promote cashless technologies like NFC technology. The Indian government, on the other hand, introduced PSUs that offer a 0.75% discount on fuel sale prices over digital payments. Such incentives have increased the NFC chips adoption rate in these nations in the wake of the contactless payment trend.
To further promote cashless transactions in the retail segment, public sector banks offer POS terminals to attract small merchants to the digital payment ecosystem. As a result, approximately 6.5 lakh machines have been issued to traders recently, contributing heavily to the Indian NFC chips market’s growth.
Within North America, the conjoint efforts of private organizations to promote cashless transactions, in addition to soaring smartphone sales, have created a beneficial market for NFC chips manufacturers. Moreover, the penetration of NFC-enabled mobile payment applications such as Amazon, Visa Paywave, and Paypal has propelled the near field communication chips market’s progression across the US and Canada. Our estimates indicate that the North American near field communication chips market to witness a CAGR of 13.18% during the forecast period 2022-2028.
NFC chips have emerged as a new archetype in the wireless communication technology segment, providing versatility in terms of security and data transfer. This has increased R&D activities across various start-ups aiming to expand footings in the market. These investments are expected to widen NFC technology’s scope for real-time reservation tracking and banking updates. As per OBRC estimates, around 100 start-ups have established operations in the field of near field communication, with many expanding research capabilities. Hence, observing a high number of start-ups indicates that the global NFC chips market will enlarge over the forecast period.
Frequently Ask Questions:
Q 1) What are the uses of NFC chips?
A: From information transfer to contactless payments to security, NFC chips have emerged as an ideal solution for authentication and data protection. NFC chips are widely used in contactless payment systems, allowing mobile and card payments.
Q 2) Which companies manufacture NFC chips?
A: Samsung Semiconductor Inc, Broadcom Corporation, Marvell Technology Group Ltd, EM Microelectronic Marin SA, Inside Secure SA, Mediatek Inc, Murata Manufacturing Co Ltd, NXP Semiconductors NV, MStar Semiconductor Inc, Stmicroelectronics NV, Qualcomm Inc, Renesas Electronics Corporation, Sony Corporation, Texas Instruments Inc, and Toshiba Corporation are leading companies manufacturing NFC chips.