GEMENOS, France -- Gemplus S.A. and Mips Technologies Inc. today announced an alliance to jointly develop a new 32-bit RISC processor architecture for next-generation smart cards, which will serve a wide range of applications in cellular phones, wireless devices, Internet shopping, banking machines, and identification systems.
Under the alliance, the two companies said they intend to create a new instruction set processor, which will be tailored for smart card applications and use open operating systems, such as Sun Microsystems Inc.'s Java Card and Microsoft Corp-'s Smart Card for Windows.
Mountain View, Calif.-based Mips will eventually license the new 32-bit RISC core--to be called SmartMIPS--to chip suppliers serving the smart card industry. France's Gemplus will gain the advantage of providing input in the development of the core and will have a head start in using the new processor as part of the partnership.
Company officials declined to reveal details about the structure or financial aspects of partnership, but they said the aim is to create a new industry standard platform, based on 32-bit processing. Much of the work will take place in Mips Technologies' design center in Copenhagen. Gemplus, based in Gemenos, will provide expertise in smart card software and requirements for operating systems.
"For years this smart card industry has been using off-the-shelf, general purpose processors with small modifications," said Bertrand Cambou, chief operating officer at Gemplus, which claims to be the world's largest supplier of smart cards. "We have a set of great chip suppliers, who are working with us to help grow that business, but now that the smart card industry is growing at very high pace, and the technology is more demanding with open operating systems... There is an interest to be able to modify the general-purpose processor for smart card applications."
About 1.6 billion smart cards were shipped worldwide by suppliers in 1999, and about 300 million were microprocessor based, according to Cambou. The majority of cards today are based on memory chips, which have some lower levels of intelligence. These cards have been called "smart memory cards."
"Eventually most of the smart cards will become microprocessor based," said Cambou, who declined to issue a forecast. About 65% of Gemplus' cards are microprocessor based. The French smart card company posted revenues of 5.029 billion francs ($817 million) in 1999, and generated a net income of 218 million francs ($35 million).
"Every GSM cellular phone will they have a smart card. Next-generation wireless standards will use smart cards as well. Most Europe banks are using smart cards, and computing security for access to the Web will use microprocessor cards," said Cambou. "The compound growth is high."
Mips Technologies officials in Mountain View agree that the potential is huge. "The entire market for embedded processors, in this class of product, is in the neighborhood of 400-to-500 million units today excluding smart cards," said John Bourgoin, chief executive officer of Mips Technologies. "This smart card market is already 300 million units and we haven't touched it yet. You can see why we are excited about it because it opens up a whole new market for us that is about the same size as the general embedded processor marketplace today, which is fragmented," he added in an interview with SBN.
In entering this market, Mips Technologies will be running up against well-entrenched processor suppliers, including ARM Ltd. of the U.K., which has placed a great deal of emphasis on smart cards and European applications. In addition, development activities for Microsoft's Smart Card for Windows operating system are also underway at Infineon Technologies AG in Munich and Atmel Corp. of San Jose. And Europe's STMicroelectronics has also targeted high-performance smart cards as a key growth opportunity.
According to a market forecast from Dataquest Inc., about $3.4 billion in smart cards are expected to be shipped in 2001.
By J. Robert Lineback