Axalto First to Set up Full-Scale Smart Card Production in the U.S.

March 31, 2005 — In a vote of confidence for smart card technology in North America, a leading producer of chip-embedded plastic cards has achieved full production of the technologies necessary for smart cards at a plant outside Baltimore. Axalto Holding NV, a France-based card manufacturer, says this is the first time such full-scale smart card production has come on stream in the U.S. The new production line at the plant, which has been producing cards since 1964, will manufacture as part of one process smart card modules, which include a microprocessor, memory, and other software and security technologies incorporated in chip-based cards. Such advanced card technology, while increasingly common in other parts of the world, including Europe, has lagged in the U.S. as card issuers and merchants have struggled to build a business case for it. One of the most promising U.S. applications for such cards, a Visa-branded program operated by Target Stores Inc. that included loyalty features, was shut down by the chain a year ago. Axalto, which produces smart cards worldwide for government as well as banking and mobile-phone applications, sees an expanding market opportunity in the Americas region, if not specifically in the U.S. The company says the Americas region is generating 29% annualized revenue growth, the strongest performance of all of its regions. “Axalto needs to make the investments in innovation and production technology necessary to meet the rapidly expanding smart card market requirements in the region,” said Paul Beverly, president of the Americas for Axalto, in a statement. “This state-of-the-art facility is the embodiment of our commitment to high-volume, leading-edge production capacity.” The clean room at the Baltimore plant is operational, producing modules for clients in North and South America, and the company says it plans to build production to full capacity by the middle of the year. Chip card capacity figures were not released, though the plant has produced 60 million cards annually. The company, which has customers in 100 countries, has produced 3 billion smart cards over its history. Until last year, the smart card and point-of-sale terminal business of Axalto was part of Schlumberger Ltd.

About Axalto

Axalto is the world’s leading provider of microprocessor cards (Gartner Dataquest 2004)–the key to digital networks–and a major supplier of point-of-sale terminals. Its 4500 employees come from 70 nationalities and serve customers in more than 100 countries, with worldwide sales reaching 3 billion smart cards to date. The company has 25 years’ experience in smart card innovation and leads its industry in security technology and open systems.

Axalto continuously creates new generations of products for use in a variety of applications in the telecommunications, finance, retail, transport, entertainment, healthcare, personal identification, information technology and public sector markets. Microprocessor cards provide convenience, security and privacy to public and private services operators, their customers and end users. For more information, visit us at http://www.axalto.com/