Pentagon To Buy Super-Safe ‘Smart Card’ Chips From Eastern Germany

Traditional passports, easy-to-forge Social Security cards and the classic American driver’s license all may soon become relics of past era, as “smart card” technology takes center stage.

The Pentagon in October contracted German chipmaker Infineon Technologies AG to produce a new generation of special chips called "secure microcontroller chips" that will be used on newly designed "smart cards" -- cards specially designed to ensure that only a card's owner is able to use its features.

Infineon’s chip plant near Dresden, the capital of the Germany's eastern Saxony state, pioneered the development of the previous generation of smart-card chips and it is there that the new smart chips are expected to be made.

In addition to the microcontroller chip, the new smart cards will contain a magnetic strip, a linear bar code, a two-dimensional bar code, a photograph, and several anti-counterfeit security features. The microcontroller chips themselves will have advanced, built-in security capabilities, including "Public Key Infrastructure" and "digital signature technology," which protect their stored data from tampering.

Smart-card technology may soon be available for civilian security applications to minimize the risk of identity theft, credit fraud, restricted area access and even airline hijackings.

Infineon already makes the secure microcontroller chips already used in smart cards provided to the Pentagon -- by Electronic Data Systems Corporation, as part of the Defense Department's Common Access Card (CAC) program of the Defense Manpower Data Center. The CAC program is being rolled out as the single, standard means of physical identification, building access and computer network access for approximately four million US civilian and military employees and outside contractors.

Infineon's technology is currently the only technology available that meets the stringent security requirements of the DOD.

The company is a spin-off of the European electronics giant Siemens AG, and has become the world’s leading supplier of integrated circuits for security and chip cards, with 43% of global market share in 1999. One of its facilities is located in Richmond, VA.

Chief Executive Ulrich Schumacher, seeing a growing market for smart card technology, four years ago established a business group within the company to focus exclusively on this expanding market segment.

Though the company's Dresden facility is gearing up to produce the new chips, its main focus remains its manufacture of 200 millimeter and 300 millimeter chip “wafers.” Semiconductor chips are mass-produced onto large circular plates called wafers that allow many computer chips to be made simultaneously and therefore more cheaply. The larger the wafer, the lower the unit cost of each chip.

Infineon, based in Munich, is the eighth-largest semiconductor company in the world. It built its chip-production plant in Dresden in 1993 together with Japanese and American partners.

The company was attracted to the region in large part because Dresden already had a large pool of highly skilled people trained in microprocessing technology, Dresden having been an important center for microprocessing research in the former East Germany. The state of Saxony as a whole has traditionally put considerable emphasis on research in electrical engineering and its universities and technical institutes are particularly strong in the fields of microelectronics and materials science.

“Dresden is a great place to work,” says Dr. Johann Harter, Managing Director and Senior VP at Infineon Technologies Dresden. “The number of companies in the area is large enough that there is development activity and synergies between R&D and manufacturing. I would compare the Dresden high-tech cluster, called Silicon Saxony, to other high tech clusters such as Austin, Texas, or Silicon Glen, the cluster near Edinburgh, Scotland.”

Today, Infineon’s Dresden facility employs 3,400 people and turns out 13,000 chip wafers per week for applications that range from automotive computers, communications, and smart cards to wireless devices and memory chips. Another major activity of the facility is to test the components of its memory modules to improve chip performance.

For further information, see www.infineon.com—