May 19, 2011 / 2:45 PM / in 8 years

NXP says demand for NFC chips to soar

PARIS (Reuters) - NXP Semiconductors NXP.O expects to ship around 70 million short-range wireless communication (NFC) chips this year and more than double that amount in 2012 as growth in smartphones enables the decade-old technology to take off.

Richard Clemmer, Chief Executive of NXP Semiconductors, attends a Reuters Global Technology Summit in Paris May 19, 2011. REUTERS/Charles Platiau

Every NFC shipment of any significance so far has contained chip sets made by the Dutch company, NXP Chief Executive Richard Clemmer told the Reuters Global Technology Summit on Thursday.

Along with Sony (6758.T) (SNE.N), NXP is the co-inventor of NFC, which enables data to be exchanged wirelessly over distances of a few centimeters, meaning mobile phones can be used to pay for goods, store electronic tickets, download music and swap photos and business cards.

“We’re working with Google (GOOG.O), Microsoft MS.O, all the handset providers, the carriers, all the banks and credit card companies, and every time we talk to Google, they tell us to double our production,” Clemmer said.

The technology has existed for a decade and is already used in swipe cards for public transport, electronic passports and a few NFC-enabled smartphones but it is expected to see a mass roll-out in the second half of the year with the latest wave of smartphones.

Clemmer forecast that between two-thirds and three-quarters of smartphones would feature NFC (near-field-communication) by 2015, adding that NXP had a 70 percent market share in NFC technology.

Google is including the ability to make mobile payments in its Android operating system, the world’s most popular smartphone software, while Nokia NOK1V.HE has said all of its phones will be NFC-enabled by the end of 2011.

Research in Motion RIM.TO has also said its latest Blackberry, due out this summer, will include NFC.

Clemmer did not expect the technology to be available on the next version of the iPhone, however.

“I’d be surprised if Apple’s APPL.O iPhone5 has NFC,” he said, adding that he expected Apple’s iPhone6 to come out next spring.

Although Clemmer would not speculate on Apple’s NFC plans, he said every smartphone manufacturer was working on adding it.

The CEO also said he expected the technology to be integrated into more traditional phones, including those made by Chinese handset maker ZTE (000063.SZ), which is strong in developing markets in Asia and Africa.

Editing by James Regan

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