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Electronic ID card to strengthen smart card market

Posted: 04 Aug 2008 ?? ?Print Version ?Bookmark and Share

Keywords:electronic ID? card module? smart card?

The German federal government has said it will be introducing an electronic ID card similar to the widely used electronic passport. In contrast to the passport, the ID card will optionally carry an electronic signature that will enable it to be used as an internet authentication device, potentially replacing PIN- and TAN-based transaction procedures. For the industry, this will be an additional significant enterprise.

The ID card, which is scheduled for rollout in 2010, triggered different opinions from data privacy advocates and from the industry. The Greens in the Berlin parliament criticized that an official document will be coupled with arrangements aiming at private commerce. At the same time, data security experts expressed concerns that the fingerprint marks stored voluntarily on the chip may be abused.

Ease in online transaction
The industry, represented by Berlin-based Bitkom trade organization, hailed the planned launching. "The electronic ID card will improve user security in the Internet and thus will strengthen confidence of consumers when shopping online," said Dieter Kempf, steering committee member, Bitkom. The organization said online banking, internet shopping, electronic citizen services and e-government services benefit from the combination of electronic ID card and electronic signature.

For Detlef Houdeau, senior director, business development chip cards and security, Infineon Technologies, the enhanced Internet utilization options are the most important aspect of the government decision. The company was involved in the definition of the specification set which form the basis for the electronic passport as well as the new ID card.

Similarity to smart card
Technically, the ID card electronic content is identical to the smart card chip in the electronic passport being used in some countries. The current design goes back to specifications made in 2004, where similar approaches are discussed in the UK, Spain, France and Italy.

"Like its passport's features, the electronic circuit in the new ID card communicates contactlessly with the outside world. It also has the same microcontroller and provides the same data structures and access methods," explained Houdeau.

"Both smart card chips can store the same biometric data," he said. This includes fingerprint data which in the case of the German ID card will be voluntary (as opposed to the electronic passport). Memory size and data processing hardware as well as basic algorithms are also similar. The specifications are defined in the European CEN TC224 standard, which covers protocols and security mechanisms.

Storing two data sets
The ID card, however, stores two sets of data different from each other. The first set is the same as used in the e-passport. The second set contains the electronic signature and the authentication routine. However, both sets are administered by the same microprocessor.

To use the digital signature for Internet or other business transactions, the business partner needs to have an electronic certification. Currently, it is not completely clear how these certificates will be distributed; data protection advocates and Internet security groups regard the distribution path as one of the weakest points in the system.

Better Internet security
Nevertheless, proponents like Infineon believe that the system will greatly improve internet security. For instance, it could replace PIN/TAN procedures being widely used for Internet financial transactions. "The security level achieved by the digital signature is so high that it is justified to say this is a completely new application class," Houdeau said.

The smart card chip industry including chip vendors hails the government decision. While the ID cards make up to only a relatively small percentage of the annual smart card chip output, the introduction of these devices still could have a significant business impact.

Gartner's opinion
According to market researcher Gartner, the worldwide market for smart cards and microcontroller-based cards in 2007 accounted to 3.3 billion units. Against this background, the additional business generated through the German ID card decision seems relatively small. "Infineon estimates the volume to about 7 million units per yearperhaps more since the government will create incentives to foster a quick introduction," Houdeau said. Since other EU countries are considering similar rollouts, Houdeau estimated that there will be a potential market opportunity to about 38 million units annually. Seventy-eight percent of the total volume is represented by simple, cheap subscriber identity module cards. Thus, the market for the more complex ID cards adds up to about 5 percent of the remaining total market volume. In terms of value, the ID card impact however would be significantly higher since they represent a higher value per piece.

In 2007, among the smart card vendors Gemalto was the dominating factor with a market share of 36 percent, followed by Giesecke & Devrient with 16 percent and Oberthur Card Systems with 9 percent, Gartner said. Top supplier of ICs for chip cards was Infineon with shipments accounting for 28 percent of the market, followed by Samsung, Atmel Corp. and STMicroelectronics.

- Christoph Hammerschmidt
EE Times Europe

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