The Smart Payments Association ( Smart Payment Association , abbreviated as SPA ) warns that the escalating tensions in the global supply chain are putting increasing pressure on the supply of payment cards worldwide.
This position paper was released on Tuesday by SPA, a trade organization in the card and mobile payment industry. The document points out that there are two interwoven forces reshaping the payment card supply chain: firstly, semiconductor wafer factories are increasingly prioritizing the allocation of production capacity to AI applications and data centers over mature manufacturing processes; secondly, ongoing geopolitical instability has affected the supply of key components and materials used in payment cards, particularly 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 exacerbating the shortage of 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 capacity limitations on trade routes are further aggravating this issue.
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 forced to seek and switch to alternative supply sources for payment card chip production, 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 standard-setting organizations.
