Samsung makes a smart move

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Samsung Electronics has begun mass production of its 16bit multi-application smartcard chip, which the firm hopes will help it to become market leader by 2005.

The chip is designed for data storage, computation or security applications in wireless communications, financial transactions, transportation, and ecommerce.

The Korean giant already produces smartcard chips with 8- and 32bit CPUs, and claimed this would complete its portfolio.

Samsung predicts the smartcard chip market will grow in value from $1.3bn (£880bn) this year to $3.2bn by 2004, and intends to be the market leader in the sector.

However, Duncan Brown, consulting director at analyst Ovum, expressed caution.

"I doubt that this rate is sustainable because the industry is dominated by the mobile phone industry, which is suffering a slowdown," he said.

"Other industries are adopting these cards, but they have been slow to take off. The electronic point-of-sale devices have a life expectancy of about seven years, so firms are slow to migrate."

As core technologies the new device has Multos (Multi-application Operation System) that can accept electronic currency from any country, as well as the Java open platform.

Clive Longbottom, an analyst at Quo circa, said: "The Multos addition is significant, because the main use is with electronic point-of-sale devices. However, they are increasingly being used as a security level for computers, to prevent unauthorised access."

Security fears concerning these cards are a major consideration, and the Data Encryption Standard (DES) exists within the hardware to encode the data sent between the smartcard and the reader.

The company claims that this is 10,000 times faster than using DES software, which makes it ideal for use in encryption systems.