Payment card chips rely on mature manufacturing nodes of 28nm and above, which are currently being sidelined by semiconductor foundries prioritizing high-growth AI applications and data center hardware. This shift leaves card manufacturers struggling to secure the production capacity needed to maintain existing output levels. Beyond silicon, the industry is grappling with supply volatility for precious metals used in EMV chip contacts and PVC, as trade route constraints and regional conflicts complicate the procurement of raw materials.

To prevent a repeat of the widespread shortages seen during the pandemic, the industry is shifting toward alternative production sources. However, qualifying new suppliers requires substantial time and technical investment. The Smart Payment Association is now urging card issuers to provide long-term demand forecasts and align on frame orders earlier in the planning cycle. By sharing accurate volume projections, issuers can help manufacturers lock in necessary capacity before foundries reach full utilization.