According to global technology intelligence firm ABI Research, worldwide shipments of smart government ID credentials increased from 502.6 million in 2020 to 585.4 million in 2021, as the market recovered after the shortfall driven by the COVID-19 pandemic. Although the passport market is forecast to take a few years to recover to pre-COVID levels, possibly 2024, the overall market has seen an upturn after the woes of 2020.
“The markets for National ID and Passport will see increases from the 2020 shortfall,” says Sam Gazeley, Digital Security Analyst at ABI Research. “While many countries are still in various states of travel restrictions, rising vaccination rates have seen some borders reopen. This has injected some impetus back into the Government ID market. Projects that had been postponed from last year or had issuance levels vastly reduced have begun to spin-up, contributing to the year-on-year shipment growth of 17.7% achieved in 2021.”
Between 2020 and 2021, smart National ID issuance grew 17.7% Year over Year (YoY), climbing to 314.7 million units. Projects such as Turkey, Italy, and Bangladesh will continue to issue, while new programs will see postponement of enrolment and issuance until 2022 and beyond, such as the Philippines, Kenya, and Nigeria. There are questions around the possible impact the chipset shortage will have on the Government ID market, if at all, despite a focus from IC vendors to supply the government ID market as a priority. While this will not lead to a YoY decline, the shortage will see shipments increase in 2022 to a marginal YoY growth of 2%.
The COVID-19 pandemic, growing demand, underinvestment, and geopolitical trade tensions have contributed to the global chipset shortage. The worst of the chipset shortage is expected this year, despite the shortage having already had a strong effect on other smart card markets. Chip shortage recovery is anticipated from 2023, and 2025 is likely when extra manufacturing capacity comes online to ease supply stress. The effects of the chip shortage have not been mirrored across all affected end markets.
The government ID market has been less impacted than other smart card verticals. The nature of the government ID market being contract-based has ensured that supply obligations have been fulfilled, with the price fixed, alongside priority of IDs for other reasons such as monitoring and dispensing healthcare through the COVID-19 pandemic, which have served to reduce supply implications. “Net new opportunities and renewals of existing contracts are where shortage impacts will be most felt within the ID market,” concludes Gazeley.
These findings are from ABI Research’s Government and Healthcare ID Cards market data report. This report is part of the company’s Citizen Digital Identity research service, which includes research, data, and analyst insights. Market Data spreadsheets are composed of deep data, market share analysis, and highly segmented, service-specific forecasts to provide detailed insight where opportunities lie.
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