Counterfeiting has spread from credit cards to microchips to circuit boards and entire networking appliances, prompting semiconductor makers worldwide to pioneer a new billion dollar market for smart authentication microchips.
Smart cards have pioneered in the anti-counterfeiting market by perfecting authentication microchips, which ensure that credit and security cards are genuine and authorized. Now major microchip makers are diversifying into authentication chips for a variety of markets rife with counterfeiting. The chips can be used in everything from computer circuit boards to networking devices that connect to cloud computers.
The authentication microchip market is small today, but will grow rapidly in a diverse anti-counterfeiting market expected to be worth $6 billion by 2016.
Authentication chips cast into hardware the identity-based cryptography protocols that exchange secure keys to guarantee that the manufacturer who claims to have made a device is genuine. Encryption is usually also employed to prevent the kind of eavesdropping on the secure key exchange that counterfeiters can use to fake identity-based protocols. The exact algorithms used are often kept a closely guarded trade secret by the authentication microchip manufacturers, which include the makers of smartcard microchips, such as NXP, STMicroelectronics, Infineon, Inside Secure, Maxim and Renesas.
Today, microchip-based security solutions amount to one of the most profitable segments. The firm predicts that authentication microchips will be the fastest-growing segment of the market for the next five years.
Secure memory chips have been used for several years in many anti-counterfeiting applications, but authentication microchips have only been widely available for about a year and a half, permitting almost any type of electronic device to employ smart algorithms that guarantee that they are genuine. Authentication microchips typically add less than a dollar to the cost of manufacturing an electronic device and are usually mounted on printed-circuit boards alongside other components. Prices are dropping too, which will permit even cost-sensitive devices like radio-frequency identification tags to include authentication protocols in the near future.
