Florida Today

AuthenTec sells record millionth microchip

August 4, 2003
By Brian Monroe

MELBOURNE, FL -- Big or small, local fingerprint-sensor maker AuthenTec Inc. will find a way to put an access-restricting chip in it: buildings, homes, doors, computers, laptops, personal digital assistants and cellular phones.

With so many markets, and partners with names like IBM, Microsoft and Texas Instruments, it's no wonder the Melbourne-based company, which employs 54 people, has shipped its millionth semiconductor-based chip -- a record for the biometrics industry, company officials said.

Founded in 1998, it took AuthenTec more than four years to get to 1 million chips sold, and it is expecting to sell more than 1 million chips in fiscal 2003 alone.

Those sales have allowed AuthenTec to hire two more people and open positions for three others.

AuthenTec is not showing any signs of slowing. Experts say the company is poised for growth in a number of fields -- including health and education -- after a maker of tablet personal computers, which give users the ability to write on the screen with a special pen, chose to integrate its products with AuthenTec chips.

Tatung, a Taiwan-based, $7 billion-a-year company specializing in advanced research, product development, fast prototyping and manufacturing, is using AuthenTec's award-winning AES3500 fingerprint-sensor in its first biometrically enabled tablet PC, the Tangy 910.

"Business is very good -- clearly, the best it has been in the history of the company," said AuthenTec President and Chief Executive Scott Moody. "Things are really taking off. We will ship more than a million chips this year. That gives an indication of our growth. We are busy and working exceedingly hard -- all for a good cause."

Biometrics uses technologies for measuring and analyzing the unique characteristics of a person's body such as fingerprints, eye retinas, irises, voice patterns and facial patterns, mostly for authentication purposes.

For the Tangy, AuthenTec's sensor is featured directly on the tablet and allows users to more securely transport sensitive data stored on the device's operating system by requiring fingerprint identification to gain access to files.

The Tangy boasts the capabilities of a laptop PC, but uses a digital pen to record handwriting, save drawings and point to depictions on a graphical keyboard. A button on the pen allows it to mimic the click of a mouse-pad. The Tangy is also the first biometrically enabled tablet PC to run Microsoft Windows XP for Tablet PC Edition, as well as all current Windows-based applications.

"Our goal was to provide our customers with a tablet PC that can be used by anyone at any time in a simplified manner," said Joe Chen, deputy general manager of Tatung's computer research-and-development division.

"Protecting a personal computing device of such convenience meant that we had to find an equally convenient security solution, and AuthenTec's fingerprint sensor was the stand-alone answer."

The Tablet PC has been deployed in the United States to physicians and technicians within the health-care market, as well as abroad to teachers throughout the United Kingdom's educational system.

Tablet PCs equipped with biometric devices could have strong sales in health care because of recent legislative measures to ensure more-secure patient records, which could mean additional revenue opportunities for AuthenTec, said Trevor Prout, a spokesman for International Biometric Group, a biometric consulting, integration and research firm based in New York.

A measure in the Health Insurance Portability and Accountability Act of 1996, enacted to protect health-insurance coverage for workers and their families when they change or lose their jobs, recommends biometrically enabled devices over standard passwords for added security.

The date to have these newer, more-secure electronic methods in place is Oct. 16.

"Health care is an intriguing market where a specific piece of legislation is helping to drive adoption," Prout said, adding that revenues from biometric devices in health care is expected to grow nearly 10 times what it was last year by 2007 -- from roughly $40 million to nearly $400 million.

"AuthenTec is positioned to capitalize on the emergence of any vertical market, whether its physical access, logical access or imbedded systems, like the tablet PC," Prout said. "They are at the forefront of having their chips imbedded in ever-smaller form factors, including cellular phones and personal digital assistants."

AuthenTec's production of chips and gaining of new devices to implement its products shows a "growing acceptance of biometrics technologies for use in a variety of applications," Prout said.

The company's sensors also are embedded within the first biometrically enabled production mobile phone, recently launched in Asia.

AuthenTec's fingerprint sensors are deployed in a multitude of countries worldwide, including the United States, China, France, Germany, Japan, Singapore, South Africa and Taiwan, among others.

Moody said his chips -- which sell for $6 to $23 apiece -- can read below the surface of the skin to the "live layer," and aren't affected by dry, worn, callused, dirty or oily skin.

The company doesn't release revenue figures for its chips, but is hoping to be profitable by the end of 2004.

On the horizon, Moody said he is excited about sales of his chips in Asia's cellular-phone market, noting that the technology has myriad applications. A fingerprint can be used to turn the phone on, protect contact lists, photographs and even stroke a virtual pet.