Shanghai Hua Hong NEC Electronics Co will this year start producing integrated circuits for use in China's national identity cards, said Nikkei Business Daily. The joint venture will supply chips for the new smart cards and has already begun working with the Chinese authorities on encryption technology. As a security measure, the company will be the sole supplier of the chips.
By the end of this year, China will start issuing 20m smart cards a month, which will replace the many identity cards that Chinese nationals already have to carry, including personal identity and national health insurance cards. This will require a chip output equivalent to 8,000 eight-inch wafers a month.