Semiconductor IP News and Trends Blog

Target Breach Highlights IP Indifference

The good news is that large amounts of IP go into the design of smart-card chips and RFID tags. The bad news is that the general public isn’t really interested.

Yesterday, I received a phone call from a producer at CBS Evening News. The producer was working on a story about smart-card chips and RFID tags – one that seemed to be related to the recent Target security breach. In (hopefully) answering her questions, I discovered a surprising bit of disagreement as to the difference between these two technologies.

Before I could talk about these differing technologies, I had to explain that the companies that produce the chips – e.g., TSMC, Globalfoundries, etc. – would not be the best contact points for her story. Instead, she should talk to the product manufacturers or, even better, the fabless intellectual-property (IP) vendors like Inside Secure, ARM, NXP, STMicro, and CAST – just to name a few. At that point, I realized that I was losing my audience and that a discussion about IP wouldn’t help. Instead, I focused on the higher-level issues. In so doing, I realized that smart cards and RFID tags were not complementary, but really in competition. Here’s why:

Different smart-card (SIM) contact pad layouts. (Courtesy Wikipedia)

Each plastic, e-commerce, smart-card system-on-a-chip (SoC) contains an embedded (often 8-bit) computer chip with memory and interface technology. Smart-card systems have proven to be more reliable than other machine-readable cards, like magnetic stripe and barcode (still used in the US). The most prominent application of smart-card technology is in SIM, which is required for all GSM phone systems.

What about radio-frequency-identification (RFID) tags? This wireless non-contact technology is used to automatically transfer ID and tracking data. RFID tags are attached to objects and can be active or passive (no batteries).

How are smart cards and RFID tags related? More succinctly, what are the differences between contactless smart cards and RFID tags?

• At the heart of contactless smart cards is an SoC technology that uses IP hardware and software. The cards contain a microprocessor for data calculations and security encryption/decryption.
• RFID tags typically have a read-only chip that stores a unique number, but lacks any processing capabilities.

While the differences seem fairly straightforward, the organizations representing each technology challenge those differences. For example, the RFID folks feel that they compete with smart-card systems. But that’s a blog for another time. [Here’s a dated but related article: RFID Vs. Contactless Smart Cards – An Unending Debate.]

Why is smart-card technology of interest to those of us living in the US? Consider this recent quote from a “System Design Engineering” article by Gabe Moretti (EDA Industry Predictions for 2014 – Part 2):

“Although common for many years in Europe, this technology has been delayed in the US for lack of infrastructure and security concerns. Now check out businesses near you with new card readers. Chances are they have a slot at the bottom as well as one at the side. That bottom slot is for smart cards. Slated for widespread introduction in 2015, smart-card technologies will explode due to high demand.” –Bernard Murphy, Atrenta

Smart-card technology is coming to the US. That’s good news for IP vendors in the SoC connectivity and security spaces. Unfortunately, like most other chip-related technologies, nobody aside from engineers and lawyers will really care.