NFC: Security at Hand

Near Field Communication, or NFC, is a short-range wireless communication technology. The “coolness” factor is very high, and the technology has been proven for years, yet it has failed to gain much traction. It may be on the verge of exploding, however. Semico Research has just released a report, NFC: Security at Hand, that covers what the technology is, what competitors it has, who the major players are in the market, and what the major target applications are.

NFC is somewhat unique in the wireless space, in that the two devices that need to communicate must be very close to each other, or even touching, in order to do so. It fulfills a niche in that it requires very little power and is ideally suited to “tap and act” applications, enabling hundreds of new use cases in the mobile arena.

There are two pieces to an NFC solution: a reader and a tag. A tag simply contains information (like a phone number or website) or an instruction set (launch this app and turn the volume up). A tag’s information is written onto it when it is created, and then the content is usually locked so that it can be only read thereafter. A reader can read the information on the tag and then carry out the action called for by the tag, such as launching a web site or storing a phone number in the contacts list.

NFC is currently offered as either a system-in-package (SiP) or embedded into wireless combo chips. Major players include NXP, Inside Secure, and Infineon. NFC solution providers with a smaller market share include MStar, Renesas, Samsung and STM.

“Mobile payments are the biggest growth driver for NFC,” said Semico senior analyst Adrienne Downey. “The adoption rate for high end phones in 2013 is almost 30%, and NFC enabled phones will grow from just over 50 million this year to over 2 billion by 2016.” Moreover, the TAM for the NFC market will grow to almost 14 billion units by 2016.

Tables in NFC: Security at Hand detail the TAM for selected NFC-enabled products, as well as the adoption rates and the market size for these devices.