Fingerprint sensors are one of the most popular identification and access control solutions based on biometrics. Optical fingerprint sensors, which were early entrants in this market, shed a bright light on a fingerprint and capture a digital photograph of it. The light-sensitive microchip analyses the digital image on the basis of ridges and valleys found on the fingerprint and creates the user’s unique code by turning the ridges and valleys into a series of 0’s and 1’s. Next time a user places his/her finger on the scanner, it analyses the fingerprint and matches its ridges and valleys to the ones already stored in the database in order to identify the user based on the unique code. Although this type of fingerprint sensors once used to be very popular, these are losing traction on account of their being prone to huge security risks. Capacitive fingerprint sensors are relatively new in the market but have managed to gain immense traction among end users. Unlike optical fingerprint sensors, this type of fingerprint scanning leverages small capacitor array circuits that analyse fingerprints.
The working of this technology is based on the change in charge stored in a capacitor when ridges on a finger come in contact with the conductive plate. At points where ridges on a finger touch the conductive plate, charge stored in the capacitor changes while at points where there are valleys on the finger, the charge in the capacitor does not change. An analog-to-digital converter records the changes in the form of 0’s and 1’s after they are tracked by an amplifier integrator circuit. High reliability of this type of fingerprint sensors has made them very popular among end users which manufacture solutions like smartphones and other devices. The growth of the global fingerprint sensors market is majorly attributed to rapid growth of smartphones market in many countries across the globe. Although many developed economies are witnessing a flattening in the demand for smartphones as penetration of these devices is already high in such countries, many developing and under-developed economies seem lucrative to smartphone manufacturers and are thus witnessing a heavy flow of investments by such manufacturers. For instance, Samsung, one of the biggest smartphones manufacturers in the world, inaugurated its largest smartphone manufacturing facility in Noida, India on July 9, 2018. As part of the company’s ‘Make for the World’ initiative, Samsung announced this phase-wise expansion in Noida which was expected to get completed in 2020. With an investment of around INR 4,915 crore in the facility, Samsung plans to double the smartphone manufacturing capacity in Noida from 68 million units per year to 120 million units per year. Recently in 2020, the government of India removed a clause from its Production-Linked Incentive (PLI) as part of which the plant and machinery, manufacturers of smartphones brought into India, used to be valued at 40% of its value.
This clause had witnessed criticism from big smartphone manufacturers like Apple. With dropping of this clause by the government of India, in order to promote smartphone manufacturing in the country when the economy is taking the blows of COVID-19 pandemic, and announcement of financial incentives of around $6.6 billion (INR 500 billion) for smartphone manufacturers, the government expects to see an impressive increase in the inflow of capital investments into this sector. Similarly, many other countries with business environment favourable enough for smartphone manufacturers are witnessing an increase in flow of investments into facility expansion. This is increasing the manufacturing of smartphones in such region. On another front, growth in smartphone manufacturing is also being driven by increasing penetration of internet across the globe. The figure given below shows the trend:
Global Internet Penetration, % of Population, 2012 to 2017
Source: The World Bank Group
As internet penetration continues to increase in all key regions, smartphones manufacturers are witnessing an increase in devices which allow people to tap the potential of the internet connectivity. As this continues, smartphone manufacturing is increasing in all key regions. With this increase, the demand for components including fingerprint sensors is also poised to surge till 2025, thus boosting the growth of global fingerprint sensors market.
The market growth is also being driven by continuous advancements in global hospitality landscape. Smart hospitality solutions are continuously gaining traction in many parts of the globe. The figure given below shows the growth we are expecting the global smart hospitality market would witness till 2025:
Global Internet Penetration, % of Population, 2012 to 2017
Source: Knowledge Sourcing Intelligence Estimates
Rising competition in the hospitality industry is pushing many hospitality providers to increase the adoption of smart solutions as the quality of services provided by them directly impacts their reputation thus positively impacting their business. For instance, in April 2018, Huawei and Intercontinental Shenzhen, China, entered into a strategic agreement. As part of the agreement Huawei will create the world’s first smart hotel using 5G technology with a view to digitally transform the Intercontinental Shenzhen’s luxury experience. Growing travel and tourism industry globally is also contributing to the increase in flow of investments into this practice on account rising revenues and increasing budgets of hospitality providers for the improvement of infrastructure and technology. For example, in November 2018, Hotel Julian, Chicago, one of the prime luxury properties of the Oxford Capital Group, purchased OPERA, a complete bundle of hospitality solutions from Oracle, in order to deliver world-class services to the guests and improve the operational efficiency of the property. Since security is a key component of a smart hospitality infrastructure, fingerprint sensors are witnessing an increase in adoption in this segment, thus propelling the market growth.
Geographically, Asia Pacific holds a significantly large share in the global fingerprint sensors market and the market growth in this region is majorly attributed to proliferation of smartphones in many countries. North America and Europe also hold a significant share in the market. State-of-the-art infrastructure in these regions is favourable for the growth of digital technologies. Since practices like smart hospitality and others which rely on digital technologies hold significant traction in these countries, and security remains at the forefront of nearly all businesses’ growth strategies, fingerprint sensors are witnessing a continuous increase in adoption, thus boosting the market growth.