NXP Semiconductors is one of the leading players when it comes to NFC and contactless smart card solutions. The Company is focusing more on High Performance Mixed Signal category because it is a more attractive market in terms of growth, pricing stability and has barriers to entry due to capital intensity. NXP Semiconductors provides high performance mixed signal and standard product solutions for radio frequency (RF), analog, power management, interface, security, and digital processing products worldwide. The Company is headquartered in Netherlands and operates across 25 countries.
It has research and development activities in Asia, Europe and the United States, and manufacturing facilities in Asia and Europe. The Company offers two categories of products: High Performance Mixed Signal product solutions and Standard Products. The High-Performance Mixed-Signal segment caters to: Automotive, Identification, Infrastructure & Industrial and Portable & Computing sectors. Products include wide range of ICs like, NFC and reader ICs, Smart card ICs, and Smart label and tag ICs. It also provides Mobile contactless solutions, combined with NFC to enable secure and convenient purchases with a mobile device. The high performance mixed signal segment accounted for 76% of its total product revenue in 2013. NFC products are a part of it.
The Standard product segment supplies a range of standard semiconductor components as well as application-specific standard products predominantly used in application areas such as mobile handsets, computing, consumer, and automotive. It accounted for 24% of total product revenue in 2013.
NXP’s major clients related to payments industry include Austria Card, Gemalto, Giesecke, Oberthur Technologies, SMARTRAC, Sony, and Samsung. There had been some reported trouble in revenue growth for its NFC business in 2013, mainly because of losing out on supplying the NFC chip in the Samsung Galaxy S4. The Company is focusing more on NFC technology with significant expansion in its product offerings. Recently, NXP and Ageto, a Germany based IT Company, combined developed NFC Solution for Identity cards that enables fast and convenient benefits. This will provide a solution to use the cards wirelessly with NFC-capable mobile devices to prove their own identity and gain quick access to services that government authorities offer.
Host Card Emulation
NXP also developed an NFC ecosystem that is integrated with Google’s latest version of the Android 4.4 operating system, ‘KitKat. Android 4.4 now offers new platform support for NFC-based transactions through host-card emulation (HCE). This enables Android smartphone owners to use their phones to initiate a wide range of mobile applications, including payments, loyalty programs, and other customized services. NXP as an example updated its PN547 NFC controller's firmware plus middleware to provide required support for transactions based on HCE.
NXP is also expanding its smart card solution portfolio. NXP and ALIOTH, a Russian based payment card solution, launched a contactless smart card solution product called SCOne. It enables the convenience of using a single smart card for everyday use. Key growth drivers will befurther adoption of security ICs in governmental documents and payment cards, adoption of new security standards and the need for multi-application solutions in existing smart card markets.