Motorola Inc. and Matsushita Electronics Corp. are joining forces to develop a new smart card chip.
The two electronics giants said their efforts will lead to semiconductors that have 10 times the memory capacity and 20 times the speed of the chips in today's smart cards.
The Ferroelectric Random Access Memory, or Feram, chips are slated to be available in the second half of 1999.
Industry experts said the research and development alliance will make smart card microprocessors cheaper and more plentiful while stepping up global competition among smart card makers.
The project promises to "take any chip and convert it into a nonvolatile memory," said Jerome Svigals, a consultant and smart card advocate based in Redwood City, Calif. Chip cards require nonvolatile memories, which do not get erased when they lose contact with a terminal or power source, but not all chips meet the specifications.
Feram chips, in effect, will "open up the whole chip inventory for use in smart cards," Mr. Svigals said.
Schaumburg, Ill.-based Motorola entered the smart card market last year. The Feram plan may enable the company to catch up in a field pioneered and dominated by French-based suppliers Gemplus, Schlumberger, and Bull.
Mr. Svigals said the link with Matsushita of Tokyo gives Motorola access to a potentially huge market for smart card chips.
Matsushita competes with Hitachi Ltd. in the Japanese smart card market. Hitachi is closely aligned with Mondex International, while Motorola has been associated with Visa Cash and its Java-based programming strategy.
Motorola supplied chips for Schlumberger cards that are being used in the Visa Cash portion of a pilot program in New York. The program will test Visa Cash's interoperability with MasterCard and its Mondex affiliate.
"Feram as a technology has been talked about in the smart card industry for some time," said John A. Letham, marketing manager of Motorola Semiconductor. "It seems like Asia is where the first programs will be rolled out."
The United States, he added, "is tending to lead the trend in looking at multiapplication cards." Bankers are looking to such "value-added" cards to yield enough income to justify the conversion from much cheaper magnetic stripe encoding systems.
Motorola said Feram chips would increase memory capacity to as much as 128 kilobytes from the 8K to 16K available on current EEPROM, or electronically erasable programmable read only memory, chips.
Motorola said Feram chips will be an antidote to the inevitable slowdowns that would result from putting more and more demands on current technology.
"We are doing this to prevent smart card users of the future from suffering the 'world wide wait' syndrome that now frustrates Internet users," said Mike Inglis, general manager of the Motorola smart information transfer division.
Smart card users will refuse to "stand at an ATM for three minutes waiting for their information to download," Mr. Inglis said. The Feram project, he said, is "another example of our commitment to meeting the future requirements of our customers.
"The smart card industry is developing at such a rate that only companies prepared to make investments now will be able to provide the technologies needed to support the applications of the future."
Expanded memory will be important as companies develop applications and services for which they hope customers will be willing to pay.
Karen Epper Hoffman, an analyst at Forrester Research, Cambridge, Mass., said Motorola is well suited to promote applications of smart cards and bring them to the masses.
The smart card industry needs "the backing of software developers who will make standard applications but also hardware makers like Motorola who can manufacture low-cost technology for chip cards and make it as accessible as cell phones and pagers," she said.
"Their tack on this is, 'We are a leader in wireless and cell phone technology, and this is a new platform we will dominate.'"