Market Trends of NFC Chips Industry
Consumer Electronics to Hold Significant Market Share
- The Internet of Things has been growing across smart consumer applications, and it is expected to become more customizable to give users more control and enhance appliance operating functions. Smartphone sales have increased significantly in the past few years, owing to the post-pandemic economic boom that has allowed the overall market to pick up the pace. Most major corporations are moving forward with complex or hybrid work models, which is assisting market expansion globally.
- As IoT continues to grow, smarter home appliances and devices are becoming readily available through internet connectivity. The latest models of smart fridges have NFC chips to enhance their customer experience.
- According to GSMA, the global smartphone penetration rate was 69% in 2023, up from 68% in 2022. Nearly all smartphones and smartwatches are equipped with NFC chips. The increasing use of contactless pay using digital wallets has increased the demand for NFC chips in smartphones. Google Pay and Apple Pay were the initial adopters of the NFC feature on smartphones.
- Smartphone manufacturers across the United States and Canada are making it easier to access mobile payment technology by including it in all new mobile phones and making the applications work across all available m-payment solutions.
- China and Japan, the major investors in smart consumer appliances such as televisions, washing machines, smartphones, fridges, projectors, cameras, headsets, and printers, extensively deploy NFC for easy and contactless operations. For instance, LG washing machines have an LG NFC Tag On Logo in several models, which allows them to be connected to a smartphone.
- In May 2023, appliance company Midea Group began construction work on its new factory in Pouso Alegre, Brazil. The plant will have a total area of 73,000 sq. m and produce 1.3 million products annually. This initiative of the new plant forms an integral part of the global expansion of Midea Group, which will create opportunities for the market.
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Asia-Pacific to Witness Significant Growth
- The NFC chips market in the region is majorly driven by government programs supporting digital transactions and private players' rising adoption of NFC technology. For instance, Nike has produced over 130,000 pairs of shoes in China containing an NFC chip that connects each product to a digital twin that can be used to trace its provenance and authenticate the product.
- Further, increasing mobile payment transactions coupled with growing government and private corporation's initiatives towards adopting biometric authentication systems are expected to drive the biometric market in the country.
- The Indian market is rapidly evolving to meet the demands of the digital payment culture, and an increase in e-commerce culture is leading to a rise in digital wallets. To meet the increasing demand for digital payments and to secure transactions, The Reserve Bank of India supports adding NFC payments to the country’s UPI Lite digital wallet.
- In September 2023, the National Payments Corporation of India (NPCI) launched four new UPI features. These products are expected to help UPI clock 100 billion transactions in a month instead of the previously set 30 billion transactions.
- Several banks are issuing contactless debit and credit cards that can be used for NFC payments without needing a mobile app. Users can tap their cards on contactless payment terminals to complete transactions. As technology evolves, banks are improving their services. Biometrics, such as fingerprint scanning, are added to NFC payments, enhancing security and streamlining the user experience.
- South Korea has seen a surge in the adoption of mobile payment systems in the past few years, with many consumers opting for contactless payment options over traditional credit cards. Apple recently launched Apple Pay in South Korea, signaling a seismic shift to contactless payment in the country’s primarily contact-based payment infrastructure. These factors are expected to increase the demand for NFC chips in the region.
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