The Smart Payments Association ( Smart Payment Association , SPA ) warns that the escalating tensions in the global supply chain are putting increasing pressure on the global supply of payment cards.
This position paper points out that there are two interwoven forces reshaping the payment card supply chain: semiconductor wafer factories are increasingly prioritizing the allocation of production capacity to AI applications and data centers over mature manufacturing process nodes; at the same time, geopolitical instability continues to affect the supply of key components and materials used in payment cards, especially precious metals and PVC.
Payment card chips rely on mature manufacturing processes of 28 nanometers and above. SPA indicates that AI itself is not expected to change the technical roadmap for such chips, but the surge in demand related to AI is putting increasing pressure on the manufacturing capacity that these chips depend on. Gold and other precious metals used for EMV chip components and electrical contacts are also facing continuous supply pressures due to geopolitical tensions, and the capacity limitations of trade routes have further exacerbated this situation.
Given the interconnection of global supply chains, payment card manufacturers have already taken measures to avoid the chip shortages that occurred after the COVID-19 pandemic. However, as semiconductor wafer factories report increasing capacity constraints, manufacturers are increasingly required to certify the production of payment card chips and switch to alternative supply sources, a process that requires significant time, resources, and technical investment.
To help mitigate these risks, SPA urges card-issuing institutions to share accurate demand forecasts with manufacturers as soon as possible, to communicate in a timely manner about expected sales volumes or changes in product portfolios, and to reach an agreement on framework orders and long-term planning at an early stage. SPA states that this will enable manufacturers to lock in production capacity and to cooperate more effectively with semiconductor suppliers.
As stated by SPA, they will continue to monitor market trends and provide timely updates as circumstances change.
The complete position paper can be found at www.smartpaymentassociation.com.
About the Smart Payment Association ( SPA )
The Smart Payments Association (SPA) is a trade organization in the card and mobile payments industry, dedicated to promoting innovation, security, and interoperability of payment tools, and represents its members in cooperation with regulatory agencies and standardization organizations.
