NFC Chips Market Size (2024 - 2029)

NFC Chips Market Analysis

The NFC Chips Market size is estimated at USD 2.14 billion in 2024, and is expected to reach USD 4.28 billion by 2029, growing at a CAGR of 14.80% during the forecast period (2024-2029).

• NFC chips produce a short-range radio signal and are used for sensitive financial and authentication data transmission. Due to their convenience and preference, contactless payments are gaining significant traction. As a result, various wearable device manufacturers are incorporating NFC chips as a standard into most devices to provide greater convenience by removing the need for physical wallets.
• Moreover, technological advancements are expected to shape the future of the NFC chip market. Market vendors are focusing on developing chips with secure and efficient biometrics, increasing the penetration of contactless payments. There is a growing demand for NFC chips as several banks are using NFC cards, and many merchants are accepting NFC cards for payments.
• The initial investments for NFC chip development have been high, owing to R&D activities and complications related to data analysis through an embedded device. The costs associated with maintenance and data are also critical for data security, such as encryption and decryption, which should be maintained.
• In June 2023, the NFC Forum, the standards body for near-field communication (NFC) technology, unveiled its Technology Roadmap outlining critical plans and research efforts through 2028. Among its innovation priorities, the NFC Forum is examining ranges four to six times the current operating distance (5 mm). According to the forum, a modest increase in range would make contactless transactions and actions more accessible and faster.
• In June 2023, the state-backed Kenyan Commercial Bank (KCB), Visa, and Thales launched near-field communication (NFC) payments in Kenya. KCB contactless payments are facilitated through Garmin wearables and Android smartphones. NFC technology enables contactless payments via mobile wallets like Google Pay, Apple Pay, and contactless cards. These developments are expected to drive the market during the forecast period.
• The conflict between Russia and Ukraine significantly impacted this industry. The conflict exacerbated semiconductor supply chain issues and chip shortages that had affected the industry for some time. The disruption resulted in volatile pricing for critical raw materials such as nickel, palladium, copper, titanium, aluminum, and iron ore, resulting in material shortages. This, in turn, impacted the manufacturing of various NFC chips.
• Further, according to UkraineInvest, copper prices escalated to USD 10,845/mt in early March 2022. The Russia-Ukraine War, high energy costs, and stricter emissions standards in Europe have been noted as the primary reasons for the continued shortage of copper.

NFC Chips Industry Segmentation

A near-field communication chip (NFC chip) is an integrated circuit that enables short-range, wireless communication between two devices to transmit sensitive financial and authentication data. These chips work by tapping into each other or bringing them to proximity.

The NFC chips market is segmented by product (non-auxiliary and auxiliary), end device (smartphone, PCs and other consumer electronics, medical equipment, and other end devices), end-user vertical (consumer electronics, BFSI, IT and telecommunications, retail, healthcare, hospitality and transportation, and other end-user verticals), and geography (North America, Europe, Asia-Pacific, Latin America, and Middle East and Africa). The report offers the market size and forecasts for all the above segments in value (USD).