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New trends in identification systemsCloud Identification Platform to be realized through a strong alliance between NXP and NEC

New trends in identification systems: Cloud Identification Platform to be realized through a strong alliance between NXP and NEC

Sights set on cloud solutions, next strategy in the identification industry

NXP Semiconductors (NXP), known as a global semiconductor company that has rolled out businesses in some 25 countries world-wide, has a reputation as a pioneer in semiconductor components that include RF, Analog, Power Management, Interface, Security and Digital Processing.

Headquartered in The Netherlands, NXP is a spin off from Phillips. The split occurred 5 years ago when they inherited patents and technical expertise, and have made even further strides since. Their innovations are used in a wide range of automotive, identification, wireless infrastructure, lighting, industrial, mobile phone, consumer and computing applications.

The identification business is one of its core fields and NXP has demonstrated its industry leadership, mainly in RFID solutions (LSIs for IC cards and IC tags). Their LSI products for IC cards and IC tags are used globally in transport systems, libraries, banks and financial institutions, and their identification business unit's 2010 global turnover places NXP as a leader in this market, with top ranking in the world ID and semi-conductor markets.

Now NXP devotes its technical expertise to the area of NFC (Near Field Communication) which has been accredited/approved/certified by the International Organization for Standardization (ISO) as the next generation RFID standard. Over the past few months the company has announced a succession of tie-ups with major names such as Google, China Mobile Communications Corp., Sony Ericsson and Microsoft. Against this background, NXP has selected NEC as its partner for development and realization of Cloud Identification.

We asked Heinze Elzinga, Director, Authentication Segment, Product Line Tagging & Authentication at NXP about market trends, the company's positioning and why they chose NEC as a partner.

NXP's authentication business boasts the No.1 global share.

Speaking about NXP's Authentication Segment Mr Elzinga notes, “What we have pursued has been the provision of a multi-application environment with uncompromising security. This means solutions that offer a totally new level of secure transactions, secure identity and tag identification.

Mr Elzinga's statement is backed by numerous achievements posted by NXP. Their contactless IC card LSI “MIFARE” has a track record of utilization in more than 70% of the world's mass transit systems which places them at No. 1 in the field. NXP supplies LSIs for more than 500 million bank cards to 35 countries globally and occupies the top ranking for contactless EMV banking solutions. It is also involved in more than 85% of the world's e-passport schemes, notably the US, France, Germany and Singapore, which have adopted NXP's SmartMX contactless micro-controller chip family as their electronic passport chip.

Mr Elzinga explains the importance of ID systems and NXP's superior position. “ID systems have become an indispensable part of our daily lives. They are used to access devices, for access between devices and when accessing digital content or services. NXP possesses secure element technology specifically for smart cards that is compatible with a range of service portfolio applications, and government and financial institutions globally have acknowledged its high level of security.”

NFC technology, jointly developed by NXP, has been accredited/approved/certified by the International Organization for Standardization (ISO) and is expected to be adopted in a variety of devices as the next generation standard for RFID technology. Mr Elzinga's analyses the market noting that, “NXP is the joint founder of the ‘NFC Forum’ which aims to standardize NFC. As a leader in this segment we have made an effort to achieve standardization while promoting collaboration with related organizations and companies. NFC will certainly be at the forefront of future identification tools and the pace will surely accelerate.”
"Picture : Heinze Elzinga

NXP Semiconductors

Authentication Segment

Product Line Tagging & Authentication


Heinze Elzinga

The mobile market with NFC functions moving to the mainstream

NFC is a short-range wireless connectivity standard that operates at 13.56MHz. It enables contactless communication between wireless devices. It is expected to find application in various segments and with forecasts that it will become the prevailing technology in mobile devices, the industry is gearing up.

Google has taken the lead, forming a strategic partnership with NXP. In December 2010 a complete open-source software stack for Near Field Communications (NFC) was integrated in Android OS 2.3., easing access to NFC for developers and device manufacturers.. In May, Google together with its partners, Mastercard, Citibank, First Data and Sprint announced the Google Wallet application. This app is enabled by NXP`s PN65 NFC solution for mobile transactions that includes a secure element using advanced cryptography for a high level of security.

He forecasts future market movements saying, “The reason players like Google who are associated with the mobile industry are turning towards and investing in NFC is purely because they are convinced that NFC is a superior “Identification” technology. The enhancement of its security features over RFID has attracted a lot of attention in the mobile payments segment but that's not the whole story. Unlike conventional contactless IC cards this is capable of two-way data transmission which enables the provision of new services that were previously unachievable. I would expect the emergence of numerous services that link to various smart phone applications and location data services.”

This technology also raises the potential for business card exchange or social networking services using two-way communication between mobile terminals, data provision services linked with RFID tags and the like, and use with coupons or tickets. In terms of the devices in which it can be incorporated, Mr. Elzinga comments that it will start with tablet PCs and other mobile devices and probably will end up in household appliances like TVs.

Confident of building a powerful alliance to realize the cloud identification with NFC

Mr. Elzinga gave some background to the formation of the recent alliance with NEC. He said it started with empathy for NEC's approach to cloud computing.

“Currently in the ICT industry, everyone know about the changes in business environment, including cloud computing. For this cloud computing we must ensure a totally new and higher level of security without compromising user convenience. I firmly believe that that NEC and NXP share a common belief and approach to this technology.”

He also makes a strong case for cloud computing business potential. “NEC has pushed ahead with the cloud business having assessed the future direction of the ICT industry and its targets and believes that cloud solutions play a vital role in the industry. The partnership between our companies will most likely provide the market with a powerful solution, not just in secure device identification and user ID but even as far as two-way communication applications via RFID technology.”

In terms of the roles to be played by each company using the Cloud ID platform with NFC, NXP will provide an embedded secure element consisting of an NFC controller and SmartMX, while NEC will be in charge of Security Identification on the system side using their own high-security, cloud platform “BitGate”. The two companies are also working together to embed NXP SmartMX in a card, reader/writer and terminal to build cloud identification that is identifiable at all layers.

“Best of all, the advantage of NEC's cloud business is their total coverage of platform, security system and interaction between the object and device. We have had similar approaches from other companies with an interest in NFC but at this stage they do not measure up to the quality of NEC's cloud business. Combining our respective strengths will enable NXP and NEC to offer our customers total solutions. I am confident that for NXP it will mean that we can round out our portfolio and help to place corporate customers like Google in a superior position.” [H. Elzinga]

ID system usages and handling changing markets and threats

Heinze Elzinga goes on to explain that the market for identification systems using a contactless micro-controller chip such as SmartMX will probably change in future. “The biggest change in the ID system market is the trend towards using one chip for multiple applications. For example, this would mean using a National ID Card for other uses like accessing public transport or financial services. New applications have already appeared, like mobile payments, cloud ID, M2M (machine-to-machine) identification, authentication of objects in logistics, anti-counterfeiting and so on. And these will most likely be applied to new services, marketing and branding that leverage interactivity” he conjectured.

Then he raises the vicious cycle of threats related to cyber-security as an issue in the market and explains the greatest advantage of applying NFC technology to this. “Linking the NEC solution with our NFC technology enables new types of usage capable of device and user identification at once with a cloud system protected by powerful security. ID can be effected without cumbersome password input and inconveniencing the user but the biggest advantage for the user lies in the ability to ensure data security. It guarantees device identification for approved specific end users only and access rights to services and content for approved users only, giving users a greater level of confidence. For service providers too, this guarantees access to content by legitimate users with a signature. And naturally it brings the same level of convenience to business in general as well”.

Towards new brands and new markets

Asked about future developments, Mr Elzinga responded, “Market needs for data security present a big opportunity for identification applications. NXP is pushing ahead with development of a wide range of ID product lines, starting with investment in high security technology with the new brand name of IDONIC, from high end items like multi-functional key solutions in the automotive industry right through to identification used frequently in everyday life. We perceive that needs in the automotive market in particular are likely expand and are focusing on that.”

Mr. Elzinga sees the growth markets as the US, the Asia region including China, Taiwan and Korea, Russia and Europe. He expresses his expectation for the Japan market, “We believe that our partnership with NEC with its superior position as an RFID vendor will lead to success for both out companies in the Japan market.”

And finally, Heinze Elzinga emphasizes their intention to pioneer new Identification markets in solid partnership with NEC. “The integration of NEC's cloud ID solutions and NXP's authentication solution is currently in the adjustment phase but I believe that NXP and NEC will combine to form a strong alliance and go on to product development and marketing.”

(Mar. 5, 2012)

Corporate Profile

Address Eindhoven, The Netherlands Photo
Established 2006 (Formerly a division of Philips) 50+ years of experience in the semiconductors
Employees 28,000
Main Business NXP Semiconductors N.V.(Nasdaq: NXPI)provides High Performance Mixed Signal and Standard Product Solutions that leverage its leading RF Analog, Power Management, Interface, Security and Digital Processing expertise. These innovations are used in a wide range of automotive, identification, wireless infrastructure, lighting, industrial, mobile, consumer and computing applications. A global semiconductor company with operations in more than 25 countries, NXP posted revenue of $4.4 billion in 2010.
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