Smart Cards Get Smarter

Electronic News, July 31, 2000 by Steven Fyffe, Paul Kallender

Smart cards have been stupid for too long.

For years, smart cards have relied on low-intelligence 8- and 16-bit technology.

Now processor design house MIPS Technologies Inc. has joined the growing list of companies promising to smarten up smart cards. MIPS revealed last week it had forged an alliance with France-based multinational Gemplus, the world's largest supplier of smart cards, to adapt its 32-bit processor core to smart card applications.

Right now, the smart card business is worth about $1.5 billion globally, said John Bourgoin, chief executive officer of MIPS. But most so-called smart cards are just made of memory chips with smart features, he said.

The Mountain View, Calif.-based company would like to change that by leveraging the "engineering muscle" of Gemplus' 1,000-odd software engineers to create smart card chips for Sun Microsystems Inc.'s Java Card and Microsoft Corp.'s Smart Card for Windows.

The two companies will share R&D resources in an effort to create a new standard architecture for next-generation smart card chips, dubbed SmartMIPS. When the architecture is finished, MIPS plans to offer it up for open licensing.

A low-power, embedded 32-bit processor core will implement the SmartMIPS architecture.

MIPS' move into the high-volume smart card market was not surprising, said Steve Leibson, chief analyst at MicroDesign Resources, Sunnyvale, Calif. "It's a tempting morsel and a design win for any processor company," said Leibson. "It is surprising to me that we have moved so quickly to a 32-bit orientation for smart cards."

Forecasts from research firm Dataquest, a San Jose-based unit of GartnerGroup Inc., show the global market for smart cards growing to 1.7 billion this year. Last year Gemplus shipped 495 million smart cards, staying 10 million units ahead of its nearest rival, Schlumberger Ltd., according to figures from Dataquest. Munich, Germany-based Infineon Technologies AG was the big boy in smart card microprocessor chips last year, shipping 196 million chips.

The joint development project was a smart move for both parties, said Seth Dickson, vice president of Lehman Brothers global investment bank. "The key here is that now with this strategic alliance, it expands the MIPS architecture into the high-volume, low-power market that was traditionally the domain of ARM," Dickson said. "The move to 32-bit really plays to MIPS' architecture's strengths. Gemplus gets access to the MIPS architecture. They get more than just the instruction set architecture. This is going to be something tailored specifically to the smart card market. Gemplus will clearly have first-mover advantage."

Dickson's sentiments were echoed in statements from Bertrand Cambou, chief operating officer of Gemplus. "We have taken a license for the MIPS architecture that enables us to develop optimized processor cores," Cambou said. "These cores, in addition to providing a high level of performances and security, will be highly tailored to the operating systems we will develop for the next generation of products"

Calls for more sophisticated smart cards were driving demand for bigger processors, according to Cambou. "The increasing sophistication of new smart card applications will require substantially greater functionality and processing power than is available with current technology."

Micro Design's Leibson said he could not think of any smart card applications that needed such a high-performance processor. Third-generation cell phones with Web-browsing capabilities would be the main target for high-end smart cards, according to Joerg Borchert, vice president of security and chip card ICs at Infineon Technology North America Corp.