Hitachi Ltd., a leading maker of chips for smart cards, announced development and licensing deals that indicate a growing commitment to the contactless variation of the technology.
The agreements-with Philips Semiconductors of the Netherlands and with two Colorado-based companies-were not directly related, said Hitachi official Thomas Horton. But they significantly strengthen Hitachi's arsenal for attacking one of the biggest areas of anticipated growth in electronic transactions: high-volume operations such as mass-transit entry points where it becomes impractical to insert cards into terminal slots and wait for acknowledgements.
Given the Japanese electronics company's relationships on both sides of the bank card association divide-users of the MasterCard-Mondex Multos operating system and the Java Card standard that Visa endorsed-its contactless capabilities could make it easier for mass transit and similar applications to be added to bank-issued cards.
Hitachi is preparing to meet demand for combination cards, usable in both conventional and contactless situations.
Several chip card vendors have been demonstrating contactless and combination products, but Mr. Horton said that "the market is in its infancy."
"Most all cards today are contact, but contactless is where the real growth opportunity is," said Mr. Horton, Hitachi security and applications manager, based in Maidenhead, England.
He said Hitachi has a three-pronged chip production strategy. The company offers what it calls the Standard Series of smart cards with on- board microprocessors; the Co-processor Series that includes the standard features plus cryptographic security functions; and the RF (radio frequency) or Contactless Series.
One type of cryptographic chip, the H8/3109, was custom-developed to Mondex's multicurrency specifications. A contactless memory card, utilizing Philips Semiconductors' Mifare technology, was developed for NTT, the Japanese phone company.
Hitachi and Philips announced an agreement to cooperate on systems based on the Mifare architecture. Philips has touted Mifare as a worldwide contactless standard, and it claims a 90% market share covering such uses as public transit, tolls, airline ticketing, and identification cards.
Hitachi senior executive managing director Tsugio Makimoto called Mifare "the leading proven and reliable contactless smart card technology on a global scale"-a ringing endorsement on top of a previous one from Siemens of Germany.
Separately, Hitachi obtained licenses from Racom Systems Inc. of Greenwood Village, Colo., which has contactless patents, and Ramtron International Corp. of Colorado Springs, owner of FRAM-ferroelectric random access memory.
Hitachi sees FRAM as a way to bridge the technical gaps between dissimilar memory technologies on chip cards. Hitachi had a FRAM license not relating to smart cards dating back to 1994. Racom and Ramtron offerings will enhance its RF series, Mr. Horton said.
The gambit won praise from two points of view.
Multos was designed "to enable smart card issuers and users to freely choose their applications irrespective of proprietary hardware," said Noel Stephens, head of technical development, Mondex International. "The integration of FRAM with smart card microprocessors reinforces a wider commitment to this principle."
Seeing FRAM as "virtual memory" within hardware, Patrice Peyret of Sun Microsystems Inc.'s JavaSoft division said, "Java Card could benefit greatly from this feature."
