Near Field Communication Chips Market Size 2024-2028

The near-field communication chips market is forecast to increase by USD 3.71 billion, at a CAGR of 13.64% between 2023 and 2028. The market's growth hinges on several pivotal factors. Increased smartphone penetration globally has expanded access to digital payment platforms, facilitating convenient and secure transactions. Simultaneously, the widespread adoption of contactless payments enhances consumer convenience, particularly in retail and service sectors. Government initiatives promoting digital payments further accelerate market expansion, fostering a conducive regulatory environment and increasing public trust in electronic transactions. These trends collectively drive innovation in fintech, promoting the development of robust payment ecosystems that cater to diverse consumer needs. As digital payment methods continue to evolve, businesses and consumers alike benefit from improved efficiency, transparency, and financial inclusivity, solidifying the market's role in shaping the future of financial transactions worldwide.

What will be the size of the Market During the Forecast Period?

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Market Dynamics

The market is witnessing significant growth due to the increasing adoption of NFC technology in various applications, particularly in IoT devices and wearables. The Global System for Mobile Communications Association (GSMA) is promoting NFC technology for mobile commerce and wearable technology. Companies like STMicroelectronics and NXP Semiconductors are major players in the market, providing solutions for short-range communication in smartphones, PoS systems, and mobile applications. NFC technology enables data transfer and transmission frequency up to 424 kbps. It is used in various applications such as mobile payment, ticketing scenarios, and data exchange. NFC-enabled jewelry and wearables are gaining popularity in the market. Android Pay and Android Beam are popular mobile payment solutions that use near-field communication technology. RFID infrastructure is another area where near-field communication chips are used in contactless smart cards and RFID tags. The mobile industry is expected to drive the growth of the market, with Ericsson and other players investing in NFC technology for mobile payment and ticketing scenarios. The market is expected to grow in Peer-to-Peer mode for money transfer and data exchange.

Key Market Driver

The increased adoption of contactless payments is notably driving market growth. Contactless payment is a method through which consumers can purchase products using their credit cards, debit cards, or smartphones with this technology. Contactless payment is fast, convenient, and secure. It also helps the merchants in improving their in-store payment experience for the customers. The technology can reduce the customer time taken to make the payment and eventually the waiting time in a queue.

Moreover, the increasing use of mobile wallets such as Apple Pay and Samsung Pay has contributed to the growth of contactless payments. These mobile wallets use this technology to wirelessly transmit payment data to payment terminals with this reader. The rising prevalence of contactless payments and the increasing use of contactless cards and mobile payments are expected to drive the demand for this technology card readers across POS terminals. 

Significant Market Trend

Increasing demand for smart parking is the primary trend in the market. NFC-enabled identification and payment solutions are expected to play significant roles in smart parking during the forecast period. This technology will be an integral technology for smart parking. The rising number of smart city initiatives has accelerated the demand for smart parking solutions, which integrate access control readers or this reader to read and fetch the database.

For instance, 91springboard, a global provider of co-working office spaces on rent. There are over 2,000 start-ups that work out of its properties. The facility provides access control of any type such as near-field communication, QR code, BLE, Wi-Fi, and others. The access controls present in the entry points are integrated with chips such as NFC ICs, Bluetooth ICs, and wireless ICs. Such developments in the market are likely to drive market growth and trends during the forecast period.

Major Market Challenge

Low awareness of NFC technology is the major challenge impeding market growth. The majority of the countries, such as China and India, in the region, use QR codes more often. This is primarily because of the increasing awareness of payment services such as Alipay and Paytm. Also, most of the customers in these regions are price-sensitive and prefer buying low-priced and medium-priced smartphones. As a result, smartphone manufacturers such as OPPO, LG Electronics, Xiaomi, and others are trying to reduce the use of NFC chips in their devices. The removal of near-field communication chips from their devices is expected to bring down the cost of their products by a few dollars.

Moreover, the cost of near-field communication chips that are integrated into smartphones ranges from USD 1.7 to USD 5.56 per unit. Smartphones are one of the large-volume application segments for chips. The smartphone market segment has a high influence on the volume growth of the market. With the reduced adoption of near-field communication chips in key market segments, the barriers to market growth will increase. This will affect the unit shipment of NFC chips during the forecast period.

Customer Landscape

The market analysis and report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market research report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.

Global Market Customer Landscape

Who are the Major Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Verimatrix Inc. - The company offers near field communication chips which are being designed to replace traditional ticketing systems with smart tickets for airlines, train, and bus tickets. The company offers various software solutions for protecting digital content. 

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Infineon Technologies AG
• Intel Corp.
• MagTek Inc.
• Marvell Technology Inc.
• MediaTek Inc.
• Murata Manufacturing Co. Ltd.
• Nordic Semiconductor ASA
• NXP Semiconductors NV
• Qualcomm Inc.
• Renesas Electronics Corp.
• Samsung Electronics Co. Ltd.
• STMicroelectronics NV
• Texas Instruments Inc.
• Sony Group Corp.

Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.

What is the Fastest-Growing Segment in the Market?

The market share growth of the non-auxiliary segment will be significant during the forecast period. Non-auxiliary NFC products primarily include internal NFC-enabled accessories, such as NFC IC/Chips built for smartphones to perform contactless payments, access control, and secure data sharing with other devices. While passive near-field communication tags are typically read by NFC readers, near-field communication readers are frequently integrated into contactless POS terminals and access gateways for public transportation. Thus, the growing demand for contactless POS terminals across the retail sector is majorly driving the growth of the non-auxiliary segment in the global NFC chips market during the forecast period.

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The non-auxiliary segment was valued at USD 1.72 billion in 2018. It is anticipated that the demand for near-field communication chips will be driven by the rising demand for smartphones. Peer-to-peer communication, read/write mode, and card emulator applications are all supported by NFC-enabled smartphones. This, in turn, is anticipated to drive the growth of the non-auxiliary segment in the market during the forecast period.

Which are the Key Regions for the Market?

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APAC is estimated to contribute 65% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional market trends and analysis and drivers that shape the market during the forecast period. The buyers of NFC ICs in APAC are mostly OEMs. APAC has a high concentration of OEMs across end-user industries. This substantiates the dominance of APAC in the global NFC chips market. Some of the major OEMs, incorporating near-field communication ICs in their product offerings, from different end-user industries are Huawei Technologies, Lenovo, LG Electronics, Newland Payment Technology, OPPO, OnePlus, Pax, Sony, and Samsung Electronics. These smartphone manufacturers have established their production sites across APAC due to the low costs of raw materials and labor in the region. China, Taiwan, South Korea, and Japan are considered home to smartphone manufacturers that have a strong presence in the global market.

Segment Overview

The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.

• Type Outlook  
  • Non-auxiliary
  • Auxiliary

• Product Outlook 
  • Smartphones
  • Smart wearables
  • POS terminals
  • Others

• Region Outlook  
  • APAC
    • China
    • India
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • South America
    • Brazil
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

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Market Analyst Overview

Near Field Communication (NFC) chips have revolutionized short-range communication, enabling seamless interaction between various IoT devices and wearables. The market is driven by the GSMA's promotion of NFC technology in mobile devices and wearables. Companies like STMicroelectronics and NXP Semiconductors are major contributors to the market, providing NFC ICs for NDEF data transfer in mobile commerce applications. NFC technology is widely used in wearable technology, including NFC-enabled jewelry and smart wearables, for contactless payments and authentication. Mobile commerce and PoS systems have embraced NFC technology, allowing mobile application developers to create innovative solutions for mobile wallets and retail applications. In addition, NFC chips operate at a transmission frequency of 13.56 MHz and support reader emulation, enabling NFC-enabled mobile phones to function as NFC readers for various applications.

Further, NFC-based mobile wallets like Android Pay and TouchBase offer secure data transfer for banking & finance transactions. The NFC market is also expanding into non-auxiliary products and NFC-enabled accessories, providing opportunities for growth in home healthcare and other industries. The integration of NFC technology with the Android OS and Android Beam has further boosted its popularity, making it a viable alternative to RFID infrastructure and contactless smart cards. The market is expanding rapidly with applications in healthcare, leveraging smart sensors for patient monitoring and personalized treatment. NFC technology, supported by SIM cards and NFC terminals, enhances medical applications and reduces medication errors and adverse drug events. Integrated with Internet of Things (IoT) technologies, NFC chips enable secure data transfer in online channels, making them pivotal in the healthcare industry and beyond.

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What are the Key Data Covered in this Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the near field communication (NFC) chips market between 2023 and 2027
• Precise estimation of the near field communication (NFC) chips market size and its contribution to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the industry across APAC, North America, Europe, South America, and Middle East and Africa
• Thorough analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive analysis of factors that will challenge the growth of near-field communication (NFC) chips market vendors

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