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01 Jun 2005
A spin-off of Europe-based American giant STMicroelectronics, the now-independent UPEK, Inc is charting its own success in the biometrics industry.
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Biometrics uses mathematical algorithms to capture such data as fingerprints, face and voice, which are unique to each individual, for identification purposes
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UPEK, Inc. (US, www.upek.com), a biometrics solutions provider, first started as an STMicroelectronics product group, and backed by S$33.4 million (US$20 million) in investments, had 17 patents to its name within its first 10 years with the company.
Biometrics uses mathematical algorithms to capture such data as fingerprints, face and voice, which are unique to each individual, for identification purposes. A complex but rapidly growing industry, biometrics has a projected market of S$7.6 billion (US$4.6 billion) by 2008. With the combined investments of the US-based lead investors Sofinnova Ventures, its sister company, the Paris-based Sofinnova Partners and Diamondhead Ventures, also from the US, the German Earlybird Venture Capital and the Singapore-based EDBV Management and Green Dot Capital, UPEK ceased being STMicroelectronics' subsidiary in 2004. Taking the lead of its former parent company, which first ventured into Singapore in 1969, UPEK decided on the Republic as a prime location for its operations; hence the opening of its new office in Singapore.
UPEK will leverage the Republic's position as a technological hub, its well-educated labour force and the nation's economy to develop their technology's ability to fuel m-commerce. More importantly, as a product-driven company, Singapore's solid intellectual property and patent protection laws proved a major pull factor for UPEK as well. This move further solidifies UPEK's position as a "fully baked" - which is what the word "upek" means in Czech - leader in the biometrics industry.
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The IBM T42 Notebooks feature UPEK's biometric sensor
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Security solutions
Already a success, UPEK's sensors have been integrated into a variety of products, from IBM's T42 notebooks and Fujitsu's mobile phones to SanDisk's drives. These silicon sensors, which capture an image of the fingerprint as it slides over the sensor's surface, are upping the levels of security and network access everywhere.
According to Mr Philip Smith, Chief Financial Officer, UPEK, the company's technology is set to replace passwords, digital identifiers and personal identification numbers. With a Universal Serial Bus reader, users can ensure that their data remains locked, unless access is granted with the correct fingerprint.
The growing popularity of portable storage devices has also made data increasingly vulnerable. "I met a venture capitalist who lost his thumb drive - which contained personal data and credit card information - on the plane," said Mr Smith. "If you apply our technology to a thumb drive or a flash memory device, you can secure the data that is on the device by making it inaccessible to anyone else."
Locally, Trek Technologies has applied UPEK's technology to its products, while in Japan, Fujitsu has not only harnessed the technology to secure its mobile phones, but also to provide entertainment in a mobile phone golf game.
While there are many consumer applications for UPEK's technology, providing security remains the company's main thrust. "Most people now have e-commerce accounts, Internet accounts or accounts with their banks and credit card companies," said Mr Alan Kramer, President, UPEK.
"You generally have two classes of people," he elaborated, "the people who know about security concerns, and the people who are totally unaware of security risks." The former group creates different passwords for each account, which may complicate their lives, while the latter group remains extremely vulnerable. As passwords and password management become more complex, the password replacement function of UPEK's technology provides an attractive solution.
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Mr Alan Kramer, President, UPEK
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"[With our technology,] any password you have for any Internet account or personal computer application can be stored by our software and tied to your fingerprint. Now, your passwords can be different and you do not need to remember them. You can have a high level of security as well as a high level of convenience," added Mr Kramer.
Corporate networks stand to benefit from the technology as well. "Information technology management becomes a lot easier," said Mr Smith. "Instead of changing the passwords every month to ensure that it is still the same person who has access to the right systems, users just have to register once."
As more people turn to the Internet and even their mobile phones to conduct transactions, revealed Mr Smith, UPEK's technology could also be applied to secure - as well as support - the growth of mobile commerce (m-commerce).
Bringing Singapore to the forefront
It was Singapore's reputation as an international centre for technology that attracted UPEK to the Republic. "In terms of marketplace and our vision of what this technology can offer to the future, we see Singapore as a very attractive ecosystem," said Mr Kramer.
Singapore's high technology orientation, he added, and the nation's drive to be a leader in technology, made it the ideal environment for research and development (R&D). Hoping to further develop the concept of m-commerce, UPEK's Singapore laboratory will focus on mobile phones and mobile transactions.
"We hope to see Singapore at the forefront of having m-commerce work in a way that is secure and convenient for the user," he said.
The UPEK edge
Reputed to be the only biometrics company with the ability to integrate its technology into a wide range of products, UPEK stands out from the rest of the industry. "We are a combination of a fully industrialised product and a full solution offering," said Mr Kramer. A definite advantage in a fledgling market in which most players are not yet offering complete solutions.
"Our solution has been very well tested, so we take away the risk to our customers when they put together a combination of technologies," he added.
Having a global staff also helps. According to Mr Smith, UPEK has staff engineers around the world to help its customers integrate their fingerprint-matching functions into their products.
Spinning off from the European semiconductor giant has also proven to be another advantage for UPEK. "I spent 10 years with STMicroelectronics, and really grew as an executive in a company where worldwide operations are part of everyday life," said Mr Kramer.
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UPEK is reputed to be the only biometrics company with the ability to integrate its technology into a wide range of products
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The next leap
Just a year after its break from STMicroelectronics, UPEK is already surging forward in its plans to grow in the region and globally.
Now in its second year, the company is set to expand its operations. To kick start its Singapore operations, the company has based some of its top-level management in the country. "We are [also] in the process of having all our manufacturing operations set up and based in Singapore," said Mr Kramer.
Over the course of the current year, the company expects to have a third of its personnel stationed in the Republic. "We expect Singapore to be our hub for application R&D on advanced concepts like m-commerce," said Mr Kramer. "We hope that over the course of this year, we will get some pilot applications running."
The company is also looking to grow rapidly and drive the business to higher levels of success. "In our first year of operations, we more than doubled our sales," revealed Mr Kramer, who is confident that UPEK will continue to grow and sustain the overall value of its solutions in the age of portable data.
Looking ahead, Mr Kramer said: "We are at a level now where the next milestone would be to bring the business to a point of consistent profitability, which looks like something we might achieve over the next 12 to 18 months."
Young as it may be, UPEK has certainly made its mark on the biometrics industry, and looks likely to continue doing so in the years to come.
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