About IDEX Biometrics ASA

IDEX Biometrics ASA, together its wholly-owned subsidiaries, engages in the design, development, and sale of fingerprint authentication solutions. The company's fingerprint authentication solutions are used primarily in contactless smart cards, including financial payment cards, access control cards, and card-based devices for the storage of digital currencies. The company develops and markets differentiated fingerprint authentication solutions optimized for use in smart cards, based on patented and proprietary sensor technologies, integrated circuit designs, and highly-specialized firmware and software. It primarily targets fingerprint authentication applications involving standardized smart cards without batteries, although its products also are applicable to battery-powered devices in different form factors. The company provides project-oriented engineering or design services to customers. It also licenses its intellectual property and software to third parties. The company's product portfolio consists of fingerprint authentication modules, related software, and cardholder enrolment solutions. Its latest generation of fingerprint authentication device, introduced in 2020, the TrustedBio family of modules, is a single package solution, including its most advanced fingerprint imaging sensor and a proprietary application specific integrated circuit (ASIC), which is a multi-purpose microprocessor executing image processing, biometric processing, and power management functions. Its cardholder enrolment solutions are based on a reusable sleeve, which provides secure, convenient smart card enrolment. The company's product portfolio is targeted at three applications, which it refers to as 'market segments', within the smart card market: financial payments (i.e., credit, debit, and stored value transaction cards), cyber authentication (i.e., devices for identification and authorization of users for access to high-value electronic networks or sensitive physical facilities), and digital currency storage (i.e., devices for highly-secure authorized access to cryptocurrency trading platforms and the secure storage of digital currencies, both private and government-sponsored). The financial payments market segment is the largest of the three it targets, and it is the most developed. The cyber authentication and digital currency storage segments are far smaller, and application-specific form factors, performance requirements, and standards are evolving. The company's customer focus primarily is on manufacturers of smart cards. Other customers include the integrators of authentication technologies and developers and vendors of security systems, across a broad market for identification-based authorization solutions. The company also has individual corporate customers that design authentication solutions for their own consumption. Its products are not limited to use in smart cards, but also are applicable to a range of applications across varying form factors. Because a critical element of demand for the company's solutions originates with these manufacturers' own customers, it also directs its marketing and demand creation efforts toward the education of customers of smart card manufacturers, as well as other influential participants in the smart card industry. The company utilizes a direct sales force and has customers around the world. The company relies on Taiwan Semiconductor Manufacturing Company, Limited (TSMC), the leading producer of semiconductor wafers, as the sole source of wafers for its proprietary application specific integrated circuit (ASIC) designs. It also relies on a limited number of providers of outsourced semiconductor packaging, design, and test services, including Amkor Technology, Inc., and Silicon Precision Industries Limited, both of which are leaders in outsourced semiconductor assembly and test services. Solutions The company's solutions consist of integrated fingerprint authentication modules, which its customers use in their end-products, and its enrollment device, with which a user can securely and easily store his or her fingerprint on a smart card, thereby activating the smart card's fingerprint authentication capabilities. In 2021, the company announced its intention to market and complete solutions for the manufacture of fully functioning biometric smart cards, including fingerprint sensors, card inlay, antennae, EMV module with an SE released by Infineon Technologies AG, and proprietary software, including its card operating system, special purpose applets, and biometric algorithms. TrustedBio Product Family In 2020, the company announced the latest generation of this architecture, the TrustedBio family of modules which began shipping to customers and released an enhanced version, the TrustedBio Max. The capacitive sensor in a TrustedBio module covered by a robust, protective coating, allowing for years of usage. The company's flexible sensor is relatively inexpensive to manufacture and allows for an approximately 90 square millimeter sensor surface area, more than twice the size of competitive silicon sensors. The capacitive sensor in a TrustedBio module produces a larger image, yielding more data, which enables superior scanning, feature extraction, and matching performance. Additionally, the flexibility of the polymer substrate, into which the wire mesh array is embedded, allows the TrustedBio module to easily meet industry specifications for torsion of plastic smart cards. The ASIC used in a TrustedBio module is mounted on the reverse side of the polymer substrate in which the company's sensor array is embedded. The ASIC includes a proprietary microprocessor executing its third generation scanning and template-creation (i.e., image processing and feature extraction) algorithms, its patented anti-spoofing algorithm, NFC power harvesting and voltage management, and data encryption. Depending on a customer's design or application requirements, the company's ASIC also can store and execute its proprietary matching algorithms. The ASIC in the company's latest TrustedBio Max module provides a high level of single-device functionality for fingerprint authentication in a smart card. The capabilities of the TrustedBio Max module reflect the company's strategy of creating competitive differentiation for its customers, while reducing TCO. The TrustedBio Max enables smart cards with fingerprint authentication that are secure, accurate, and power efficient, while providing a differentiated user experience characterized by fast transaction speed. The company's advanced algorithms and other proven software elements of its solution minimize software development by its customers, as well as reducing associated risks and delays. The TrustedBio Max solution is targeted at smart card manufacturers seeking faster time-to-market with a comprehensive fingerprint authentication design that maximizes performance. Also in 2021, the company announced a reference design based on integration of the SLC38 security controller, the latest SE released by Infineon Technologies AG, and the latest version of its TrustedBio module. Applicable to implementation of fingerprint authentication in smart card applications across all three of the company's targeted market segments, the high level of integration of this reference design enables differentiated authentication performance. Complete Biometric Smart Card Solutions In 2021, the company began the development of complete solution for the manufacture of fully functional biometric smart cards. The complete solution adds elements of proprietary software, including the company's JavaCard operating system, special-purpose Java applets, biometric algorithms, and enrolment solutions. Idex Pay Complete Solution for Card Manufacturers In 2017, the company introduced a patented enrolment solution, addressing another significant barrier to adoption of fingerprint authentication, particularly within the financial payments market segment: user enrolment (i.e., the process of imaging and storing a user's fingerprint, in the form of a template, within the memory of the smart card, thereby enabling its use). IDEX was the first to release such an innovative device, incorporating proprietary hardware and software, which it developed in partnership with Mastercard Inc. The company has continued to work together with leaders in the industry to further improve the enrolment process. In addition to the enrolment sleeve, the company expects to soon be able to offer several options, including enrolment via mobile phone, assisted enrolment (in-branch enrolment), and ultimately, enrolment at Point of Sale (PoS). Using one of the company's proprietary solutions, a user can complete the enrolment process in less than a minute, following simple instructions. Enrollment is completed entirely within the biometric smart card and, importantly, the encrypted fingerprint template is immediately stored only on the card, never in the cloud or on any connected device such as a smart phone or PC. Strategy The company's strategy emphasizes demonstrable solution advantages that address evolving customer and end-user requirements, leading to a sustainable competitive position and the avoidance of commoditizing pressures. Marketing and Sales The company's customer focus primarily is on the manufacturers of smart cards. Other customers include the integrators of authentication technologies and developers and the vendors of security systems, across a broad market for identification-based authorization solutions. It also has individual corporate customers that design authentication solutions for their own consumption. The company's products are not limited to use in smart cards, but also are applicable to a range of applications across varying form factors. Because a critical element of demand for the company's solutions originates with these manufacturers' own customers (e.g., the demand for financial payment cards with fingerprint authentication originates with a bank issuer interested in offering such cards), it also directs its marketing and sales efforts toward the customers of smart card manufacturers, as well as other influential participants in the smart card industry. Within the digital currency storage market segment, which is less structured than the company's other targeted market segments, its customers have ranged from large smart card manufacturers addressing emerging digital currency applications to small technology innovators developing devices for secure access to proprietary cryptocurrency exchanges. The company utilizes a direct sales force and has customers around the world. Given the early-stages of the market segments, the company is targeting, including the extended and unpredictable sales cycles frequently associated with marketing new and innovative technology-based products, it expanded its sales and marketing staff in 2022 and increased its marketing activities in 2022. Research and Development For the year ended December 31, 2022, the company's research and development expenses were $3.2 million. Intellectual Property The company's intellectual property rights cover individual inventions and complete biometric systems ranging from measurement principles, algorithms, sensor design, and system solutions. Its intellectual property portfolio, leveraging 175 patents awarded and 62 patents pending, across applicable jurisdictions worldwide (as of December 31, 2022), is a critical enabler of its strategy and competitive positioning. The wordmark 'IDEX,' the IDEX logo, and the brand name TrustedBio are registered trademarks of, and owned by, IDEX Biometrics ASA. Competition The company competes directly with other companies providing biometric sensors and solutions, including its principal competitors, Fingerprint Cards AB and NEXT Biometrics ASA. History The company was founded in 1996. It was incorporated as a public limited company under the laws of Kingdom of Norway in 1996. The company was formerly known as Idex ASA and changed its name to IDEX Biometrics ASA in 2019.