Chip makers betting big on security technology

Chip makers betting big on security technology
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First Published: Fri, Dec 18 2009. 01 15 AM IST
Updated: Tue, Dec 22 2009. 12 14 PM IST
Bangalore: Even in a country where the campuses of several technology firms are high-security areas, the revolving, turnstile door at the entrance to NXP Semiconductors bears testimony to the company’s claim that it takes security seriously.
The company says this is in the interest of the security solutions it develops, including chips for a variety of secured cards.
The revolving door, for instance, prevents tailgating, the first step towards monitoring unauthorized access.
Claiming to be the first Western company to have set up military-grade security at its India campus, NXP, says Neeraj Paliwal, vice-president and India managing director, doesn’t just supply chips to some Indian security programmes but is also developing India-specific standards in security and banking given the unique safety threats that the country faces. Even though the company boasts having supplied chips to 80% of the 100 million e-passports issued globally, it has set aside an architecture team for the Indian e-passport project, the rollout of which is slated for early next year.
However, it’s the near field communication, or NFC, technology that NXP and Sony co-invented in 2002 that the company is now looking to deploy in devices to spur a range of services, including contactless financial transactions.
NFC is a short-range wireless connectivity technology that allows secure and intuitive interaction between electronic devices, such as mobile phones, computers and digital cameras.
The Dutch semiconductor firm, which posted $5.4 billion in revenue in 2008, says this technology can be used for branchless banking and microfinance solutions in rural India.
Currently, only Nokia has rolled out mass market NFC-enabled phones, but market research company ABI Research estimates that by 2012, 292 million NFC-enabled phones will be shipped annually. NXP is now piloting a few programmes with some public sector banks in Karnataka and says it will announce the alliance in the first quarter.
NFC has good potential but it requires secure implementation, says Rajiv Jain, vice-president and managing director of Infineon Technologies India Pvt. Ltd, the Indian arm of the German semiconductor firm, which has been actively involved in the development of NFC specifications for the modular architecture and interoperability parameters.
Its potential notwithstanding, analysts say that before NFC becomes a mainstream technology, several business and infrastructure challenges need to be addressed. “For NFC to work well an entire ecosystem needs to be established with buy in from mobile operators, handset makers, financial institutions and other organizations,” says Jagdish Rebello, senior director and principal analyst, communications, consumer eectronics and India research, iSuppli Corp.
Rebello says all this might not be feasible in a phone system if it is tied to a limited number of services and subscribers need to choose an operator or phone for the services supported. “If a large carrier in India (or better still, several of the large carriers in India) decide to work together to develop an NFC ecosystem, then there is a chance.”
Paliwal agrees that “a demand pull is needed for this to take off.” Yet, he is hopeful about the overall semiconductor market in India once various e-governance programmes that could ultimately converge on the identification-secured card system gather speed and acceptance.
That’s true for NXP’s competitors as well. Infineon, which is supplying contactless security microcontrollers for the pilot launch of e-passport, says India has emerged as a “strategically important market for secured card products.”
So far, there was no way to ensure whether a ‘card’, even a mobile phone SIM card, was issued to the right person, says Paliwal. Now, with a structured approach in the Unique Identification Development Authority of India, he thinks a lot of these technologies can find their feet. “But it’s not easy as there are many who don’t want this to succeed”.
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First Published: Fri, Dec 18 2009. 01 15 AM IST