AI Demand and Geopolitical Tensions Threaten Global Payment Card Supply Chain

The Smart Payment Association (SPA) has issued a critical warning regarding the global availability of payment cards as semiconductor foundries shift manufacturing capacity toward AI-enabled applications. For fintech professionals, this signal of supply chain fragility suggests that the cost and lead times for physical card issuance may soon face significant pressure from competing high-growth technology sectors.

What was announced

The SPA released a position paper identifying two primary forces currently destabilizing the payment card supply chain. First, semiconductor foundries are increasingly prioritizing manufacturing capacity for AI-enabled applications and data centers over the mature manufacturing nodes required for payment card chips. Specifically, these chips rely on nodes of 28nm and above. While the technology roadmap for payment cards is not expected to change, the sheer volume of AI-related demand is intensifying competition for the manufacturing capacity these legacy components depend on.

Second, the report highlights sustained geopolitical instability affecting the supply of essential raw materials. This includes precious metals like gold, used in EMV chip components and electrical contacts, as well as PVC. These pressures are further exacerbated by capacity constraints on global trading routes, which complicate the logistics of card production. To help mitigate these risks, the SPA is urging card issuers to share accurate demand forecasts with their manufacturers as early as possible and communicate anticipated changes in volume or product mix promptly. Aligning early on frame orders and long-term planning is presented as a necessary step to allow manufacturers to secure foundry capacity and work more effectively with semiconductor suppliers. Transitioning to alternative chip sources is possible but remains a resource-intensive process requiring significant time and technical effort.

"Given the interconnected nature of global supply chains, payment card manufacturers are already taking steps on an individual basis to avoid the kind of chip shortages experienced after the Covid-19 pandemic. However, as semiconductor foundries report growing capacity constraints, manufacturers are increasingly required to qualify and transition to alternative sources for the production of payment card chips - a process that demands significant time, resources and technical effort."

The Smart Payment Association (SPA).

The companies involved

The Smart Payment Association (SPA) serves as the primary trade body for the global cards and mobile payment industry. Based in Munich, the organization represents the interests of major card manufacturers and technology providers, focusing on the promotion of innovation, security, and interoperability across payment instruments. The SPA plays a central role in the industry by collaborating with international regulators and standardization bodies to ensure that payment technologies remain robust and compatible across different jurisdictions.

As a non-profit entity, the association monitors market dynamics and provides technical guidance to its members, who are responsible for the vast majority of the world’s smart card production. Its influence extends across the entire payment ecosystem, from the physical manufacturing of EMV chips to the development of mobile payment standards. By acting as a collective voice for the industry, the SPA addresses systemic risks—such as the current supply chain tensions—that individual manufacturers or issuers might struggle to navigate alone. Its membership includes the key players who manage the transition from traditional plastic to more advanced, secure, and sustainable payment form factors.

What FF News has reported before

FF News has closely followed the trajectory of the physical card market through the SPA’s data. In July 2026, we reported that Global Payment Card Shipments Hit 2.47 Billion as Contactless and Eco-Cards Go Mainstream. That report underscored the massive scale of the industry, noting that contactless technology and environmentally friendly card materials had become the standard for the billions of cards shipped annually. The current warning from the SPA suggests that maintaining these high shipment volumes may become increasingly difficult if the supply of mature semiconductor nodes continues to be diverted toward the burgeoning artificial intelligence sector.

What this means

This announcement signals a significant shift in the power dynamics of the semiconductor market, where the essential hardware of the financial world is being sidelined by the AI gold rush. For the fintech sector, the era of cheap, on-demand physical card issuance may be coming to an end. Banks and neobanks that rely on rapid card replacement as a customer service tool are under the most pressure; they must now choose between absorbing higher manufacturing costs or risking inventory stockouts. This friction could accelerate the industry’s pivot toward digital-first issuance, as the physical card becomes a premium, supply-constrained commodity rather than a default utility.