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  • Thierry Spanjaard

2022: shortages will keep on hindering new developments

While making predictions for 2022, there is no prize to be won for anticipating 5G deployment will continue, cybersecurity will always be an issue and we will keep on adjusting to the evolution of the Covid crisis.

However, in this situation, there are aspects that will affect positively and negatively the secure transactions industry.

In the telecom segment, besides 5G deployment and IoT expansion, the migration to eSIM is probably to most important factor. There is no longer any debate about eSIM adoption in the IoT segment. On the consumer market, eSIM has rapidly moved from being a taboo to becoming mainstream, when many handset vendors are supporting both removeable SIMs and eSIMs. The next step is already in sight as rumor has it that the Apple iPhone 14, expected by the end of 2022, will no longer include a SIM slot and rely only on an eSIM.

Shortages and sovereignty issues will play hand in hand in forcing the whole industry to redefine its supply chains.

The semiconductor shortage crisis is affecting the secure transactions industry as well as many others in our environment: handsets, computers, POS terminals, ID readers, data centers, etc. At the same time, those familiar with the semiconductor industry cycles, already know shortage crises happened in the past, and the Covid-19 just added to the situation. They also know that shortage crises never last forever. According to Deloitte Insights, the largest semiconductor manufacturers already invested US$ 60 billion (EUR 52.8 billion) in 2021 in capacity increases at existing fabs as well as at new foundries. However, this crisis has waken up the world on sovereignty issues, from masks and basic medicines to more elaborate items. While in 2020, more than 80% of semiconductor contract manufacturing was based in Taiwan or South Korea, led by TSMC and Samsung, also according to Deloitte Insights, now the European Union and the US are setting up large programs to rebuild their semiconductor industry. The EU plans to increase its production to represent at least 20% of the world chips by 2030, while the US administration is considering the "CHIPS for America Act," that would bring US$ 52 billion (EUR 45.7 billion) to its domestic semiconductor industry.

Sovereignty issues are not limited to semiconductors! Sovereignty concerns around data are always more significant with the uncertainty of the international situation. The EU has set up a framework to protect its own data with GDPR, but the need to go further remains. Unfortunately, even if the need for data protection is understood in Europe, this does not translate into significant investments in European data protection infrastructure and major cloud services are still American, or Chinese.

More generally, people, regardless whether they are considered as consumers or citizens, are always more reluctant to see their data captured to induce profits for the Big Tech and a few others and, at the same time, find these services enjoyable and increasingly disclose their own life to these service providers. Governments are caught between a rock and a hard place and abandon part of their sovereignty to these service providers while trying to regulate them simultaneously.

The development of AI is going into the same direction: the US and China are in a strong leadership position while Europeans still need to get their acts together.

Undoubtedly, the pandemic that affected all of us in 2020 and 2021, will continue to remodel the word in 2022. Stay tuned for more insights about how this will transform our secure transaction industry!

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