Okay, thank you. Welcome to this Q4 report. My name is Ulf Ritsvall, heading up NEXT Biometrics. I will present the agenda for you quickly. If you take the next slide, please, for today's earnings call. Next slide, please. Next slide. So we'll start with the Q4 presentation, and if you stay online, there will be a small gap, five minutes, and we'll continue with the capital markets day online and in this room. Speakers for the first session, you can swap to the next slide, please. Oh, yeah, I can do it here. Sorry. Now. Now it's more automatic than, yeah. So yeah, it's me, Ulf Ritsvall, and it's Eirik Underthun that will present the Q4 earnings. And we'll start, of course, with the business update on the key parts that happened during Q4. We will do Q4 highlights, Outlook, and Q&A as pretty standard. `
We'll have quite a bit of shorter highlight and walkthrough of all the activities because we will have the majority of the speech this lunch afternoon in the capital market. So in summary, I'm proud to present that we increased the revenue with 19% from Q4 2022 to Q4 2023. We ended up at NOK 14.3 million. We continue, of course, bringing in more orders. We continue bringing in new customers. And we increased the number of design wins, which we have talked about a lot, with two. We're now at 47. We're at six, sorry. And what also I'm proud of is the increased gross margin compared to previous Q4, which is actually up, where we have seen that we will be in the future as well. We have continued strong efforts and business development in progress in both India and China.
I will talk slightly a bit more about that, but I'm happy to see we received a few new purchase orders. India is progressing well, as we have seen, as well as China. If we see the significant progress we had. ACPL, our first Indian customer, they picked up the first batch, which means actually they actually are on the market, which is fantastic news. We have been waiting so long for the L1. The first batch is actually out on the market, which is great. The distributor placed another NOK 12 million order on the FAP20 for the ACPL. We will continue seeing these orders throughout the quarters. It's a good base for us for ACPL. Of course, there will be additional OEMs in India, as we have announced, picking up additional orders. This is a good baseline.
As you have seen in the news, we have another OEM in India making an L1 Bluetooth-enabled device. We have a few examples actually out for the ones that are here, that is outside the room here, for this, and we can demonstrate the use case. Also, I'm very happy to announce that we actually had the first stocking order. As you remember, we had a breakthrough agreement in June last year. The same distributor, Asian distributor, placed the first stocking order with us and for the FAP20, which is fantastic. It's according to the contract, and it's according to the plan. Actually, what I'm most proud of is actually the China ID certification, which is a prerequisite for the Chinese market.
This stocking order, the small initial stocking order from the Asian distributor, would not have happened if we wouldn't have the China ID certificate. This is the mandatory part for China. Now we are there. Happy to see that the team, the technology team, and all teams involved managed to pull this off. We also, after the quarter, announced an exclusive healthcare agreement, where we will go through that later in more detail because Joshua, who is my sales representative in China, he will go through it in more detail. But it's actually a very, very good agreement with the healthcare business. This healthcare company, they are serving 22 different regions in China. They are now replacing, same as the Asian distributor, they are replacing optical sensors for the NEXT sensors. It's starting now. So that's one.
But the best part of the agreement is actually, technology-wise, we have a feature that we call anti-spoofing. So basically, it's hard to have another person logging into your own device. This feature, this company will recommend for the Chinese Ministry of Healthcare to bring into the specification, into the healthcare organization, which then means that it will be mandated for all healthcare devices to actually have anti-spoofing. And we are a strong player in that field. I think that's actually the biggest part of this agreement. I will hand over to Eirik for the next slide on the financials.
Thank you, Ulf. Good morning to everyone. Q4 revenue was NOK 14.3 million, which is up from NOK 12 million in Q4 2022. The revenues were concentrated towards the end of the quarter and also affected by the strengthening of the NOK to the U.S. dollar exchange rate. We ended a little bit lower than we expected when we announced the Q3 guiding. The growth in revenues was mainly resulting from increased FAP20 shipments. The gross margin in Q4 was 45%, which is up from 24% in quarter four 2022. This is mainly resulting from the improved product mix with a higher percentage of FAP20 sensors, which is kind of proving what we are looking for in the future. OpEx was NOK 14.8 million, which is around the expected level that we have seen this year.
The Adjusted EBITDA was NOK -8.3 million, which is an improvement both relative to quarter three and quarter four last year. The Q4 operational cash flow was NOK -18.5 million. This can be explained by the higher sales we had in the quarter and the concentration of the revenues in December. So we haven't collected on the account receivables yet, and this was representing a NOK -9 million of increased account receivables during the quarter. And we also paid the share issue costs that was related to the share issue we completed in quarter three. So with this, I will hand over to Ulf to provide a more detailed overview of the Outlook and the general status of the company. Thank you.
Thank you, Eirik. So I would say with this slide, with a bit different colors, I try to highlight what's actually happened in 2023. We have set the foundation for this company. We have set the foundation of India and China revenues. It's happening now. As I've said, India is ramping up. We are progressing very well. We have the L1. We have the ACPL. We have a few other contracts. We have a $300 million contract value over the next three years' period. That's starting now. For China, as we said previously, we have secured the contract for the Asian distributor. He's been waiting for the China ID. It's now in place. Placed the first order. This will then be integrated into the different devices he has. He has five to six different OEMs that he's working with.
All of these will then now start implementing the NEXT Biometrics FAP20 sensors. So why is it happening now, you can ask? I would say there's a big demand in the mature biometric market, like India and China. Everybody's using biometrics in these countries. DJ will talk later on how India is set up and why you use Aadhaar and how important it is for India. Same is actually in China. A lot of people are used to biometrics. But there's also a lot of spoofs. There's fraud in the systems. So governments, other partners see that, okay, we need to do something about maybe the not-so-secure biometric devices. We need to take one more step in the security. That means you need slightly larger sensors, which NEXT Biometrics have. And you need to have increased spoofing.
So what we call spoofing, spoofing attempts, so you cannot log into another person's device. We need to verify that you actually are a live person, for example. These are the key fundamentals in the market. And that is happening now because India has been going on for quite some time, China quite some time. And they have realized, okay, we need to do something about security. That's why NEXT is on the pole position in China. And India is already ramping. We also have discussions. One year ago, we signed a contract with a go-to-market partner in China. They are now proving themselves and helping NEXT Biometrics to actually not only sell the sensor only, but we take one more step in the value chain, selling one solution. That means the component itself, but maybe there's a flex cable.
Maybe there's a small other gadget, a PCB and an MCU. That solution is, of course, a lot higher value and price, what we sell at. Revenue will increase. Margin will be going up even further on this specific solution. China, we do direct sales with the solution. We do distribution sales through the Asian distributor when we sell the standalone sensors. Since we have the China ID certificate, the ramp is starting Q1. The mass production will start in Q1. The Asian distributor already picked up a few sensors Q4. He will pick up additional in Q1. We will see more orders coming very, very soon. Then, of course, in the healthcare market. The Asian distributor serves mainly in police, banking area. Now we have a healthcare ministry that we are a company that we're working with.
So we're addressing the healthcare market and medical insurance. We are also targeting the e-lock, not saying the smart door locks, because that's a market which has very small and very competitive pricing. We are targeting the e-locks, like turnstiles, like border control areas when entering into China and other countries. Those are the ones with high security and higher price for NEXT Biometrics. We are expecting to have atl east three OEMs. We have one today. We have ACPL that we have announced. You've seen that we have a few others in the pipe. We are expecting three out of the certified L1-enabled Indian OEMs. We will expect three to have certification in 2024. We expect at least 30% market share on the Indian market selling sensors. On top of that, we see Aadhaar is actually increasing. There's a demand for having external third-party companies accessing the Aadhaar database.
It's 1.4 billion people in the database. You have certain surroundings, certain services around it. Today, it's locked for the government, like applying for a SIM card, applying for a bank account, applying for if you have social welfare, you need some rice, that type of services. But of course, there are so many other services around this that can use this database. So Aadhaar is actually looking into opening up the system during 2024. That will increase our total addressable with at least 20%. So that's what's happening in India. And we believe will happen this year. So if you take the outlook, we believe we have set the foundation. We had a low Q3, slightly higher Q4. And of course, Q1 2024 will be, of course, even higher. So we are on the right path in revenue right now. We have set the foundation.
We will scale this company. We can do so because we are fabless. We can scale our production very easily. We have all the technology parameters are in place. Again, we are expecting EBITDA break-even at the end of Q2 2024 with the traction we have today. I wouldn't say that if I didn't believe it. Of course, potential in this and grow beyond this 2025, 2026 is enormous. We will talk more about that in the next coming hours here. Again, we're expecting gross margin at least at 50% when the and continue the low OpEx run rate. By this, I would like to open up for questions, if there's any questions in the room or in the chat, maybe.
Yeah, we have some questions in the chat. Maybe we start in the room here if there are anyone that have some questions here.
Thank you. Just a question regarding the Indian market. You mentioned that ACPL has substantial market share. But can you just explain? You said there are 32 OEMs. But isn't it fair to say that the top five OEMs control the market? And how much of the market have the top five? And we have one of them. And what's your comments regarding getting two or three of the top five?
So yeah, the top four or five, yeah, they have probably 90% of the Indian market, yes. And ACPL is so IDEMIA has historically been number one, Mantra number two, and ACPL number three, if you take it percentage-wise.
Historically, what's the percentage that ACPL has today?
They historically have been between 25% and 30%, depending on which tenders they handle.
Isn't it fair to say if you get one more OEM that you'll be way beyond 30%?
That's fair to say, yes. Yes, yes, yes.
You think you're confident that you'll get one more of the top five?
Yes.
OK. Thank you.
Anyone? Okay. Then we will do a few questions from the chat. And then we will have a short break after that. There is a question here. You have 46 design wins. How many will be active in 2024? And then tech giant deal in 2021. What's the status on that one?
So some of the 46 items, you remember the Indian, they have gone from L0 to L1 specification. Some of the 46 is actually based on L0 projects, which, of course, will be discontinued. So there's a portion that will be discontinued. But I would say that the majority of the 46 is actually recurring revenue that we actually work constantly with. And I see that going forward in 2024 as well. About the tech giant, it's a bit slow, I would say, in the collaboration. They are trying to get into, for example, India and other markets. It's not easy to get into India today being a non-Indian OEM. Like the last tender, I think I talked about it in Q3. The last 200,000 tender, IDEMIA used to get 50% of the tenders. That time, they got 10% because they are non-Indian. So India is Make in India.
Modi would like to see more Indian companies. He's investing in semiconductor fabs. He's investing in everything. He wants to do everything in India. So importing a non-Indian device, which the tech giant is trying to do, is hard. That's why you need to produce it locally.
Okay. There's a question about FAP30. And I guess we will go more into that in the session later today. But if you compare FAP20 to FAP30, how large are the differences in market size between those two market segments?
Market size in FAP30 is significantly smaller than FAP20. However, the competition is less. I would say the average selling price of a FAP30 sensor, it's like 3-4 x higher than the FAP20. And our production cost, it's not constant. But it's not that significantly higher. It's not 4 x higher.
There's another question here. So please describe what markets you're aiming for in the coming years, 2024 to 2027, and what kind of revenues you're expecting from these markets. I guess maybe we cannot give that kind of detail, but.
No, but it's obvious. When you're in high-security sensors and governmental sensor market segments, Africa cannot be untouched. So same regulation as Aadhaar in India. There's an external body called MOSIP that basically helps developing countries setting up a similar type of system as Aadhaar. MOSIP countries are in the verge of actually starting this. They already today have hundreds of millions enrolled people in their system. And there's a lot of countries following in India, so Indonesia, Ethiopia, and so on. So we will definitely see. And of course, Africa, as well as America, is, of course, the target for us going forward.
Thank you, Ulf. That completes the Q&A session in this Q4 presentation. Then we will have a short break. We will reconvene here at 11:30 A.M., which is in five minutes. Thank you.
Thank you.
The first slide. Very good. Okay. Good morning, good afternoon, and wherever you are in the world. I would like to welcome you to NEXT Biometrics Capital Markets Day, February 14, 2024. I would like to start going through a little bit of the agenda and the context we have here. I will then present the speakers. Then I will go into the slide set here. You can take two slides down, please. So we are now at 11:30 A.M. Yeah, yeah, yeah, yeah. Of course. Now I remember. I can do this again. Yeah, yeah, yeah. It's here. But I don't see it. Yeah. So I'm starting with some opening remarks, a little bit of history, a little bit where we're coming from, and where we're heading. We will have the company overview, brief outlook, similar to what we saw in the Q4 presentation. We'll have a quick lunch.
After that, I will introduce you to a few members in the management team. I will have Marcus. He will be heading up, or he will present the product technology and product innovation roadmap. We will then go into what I see a little bit more deeper on the market analysis, where I will present the different why we have selected the different market segments. We will then have Joshua, who is heading up China, present the China business online. After that, we will have Digvijay, heading up India and the remaining of the world for going through the Indian market. I will be finishing off with closing and remarks. We'll be finishing off with a Q&A. Q&A session for company overview and closing remarks. After Josh and DJ's session, we will have a short Q&A, especially about India and especially about China.
So if you have, just prepare a few questions for them. So NEXT Biometrics, we're a true global company. We're everywhere where the customers are. So the dots are representing where we have people today. So of course, there's a lot of people in this region because we're talking a lot about India. We're talking about China. So we have people in Delhi. We have people in Chennai. We have people in Shenzhen, Taipei, as you know, Shanghai, Tokyo. So we are close to where we see where we have our customers. And that's mandatory in this industry. You need to be very, very close to the customers. You need to support them very well. And that's why we are here. We also, of course, have our hardware development team in Seattle. And we have a salesperson in Houston for the Americas. I will move over and present today's speakers.
So five dots or circles. So Ulf Ritsvall, CEO. I think most of you know me. I would like to, and I think Eirik, you know. You can just stand up for the audience, I think, online. And then we have a person that maybe is a new introduction to all of you. It's Marcus. Maybe you can say a few words.
Hi. Marcus Laurén again. I'm from Sweden. I have stepped into this company now in October. Should I come? Now you can see me. So I started in October and have been working here. It's been really super great. I've been working with biometrics before. So I have a little bit of experience of what the biometric world looks like and how it works and the hurdles and the challenges and everything. When I came here, I really understood that this is some really great technology. So we got some really good products. Also in the phase that we're in, wow, it's looking super great. So I'm super excited to be here. Real great. I'm going to talk more about the products later on after lunch.
Also just a reminder that outside we have a table with just a few samples, just so you can look and feel at the products we actually have. It's not only numbers, but it's actually things you can look and feel. All right. Thanks a lot.
Thank you. Do we have DJ online? Yeah, we have. Yes. DJ, why don't you go ahead?
Hello. How are you, NEXT investors? Hello from sunny India. I thought I'd just come across and say hi to you guys. I've been listening to this great presentation by Ulf. I've been in this industry for quite some time now, I think so. Semiconductor has been +10 years. I've been working within the biometric space and technology space for quite some time. I'm really happy to be here with this team. We've got exciting products as well as new markets to overtake and conquer. That's a quick hello from my side. Hope you have a great day ahead.
Thank you, DJ. We move over to Josh. Joshua.
Hello. Are we on right now?
Yep.
Yep. Hello, guys. I'm Josh. I'm heading the sales of South and East Asia. I'm actually based in Taiwan. I travel to China and Japan frequently to take care of my market. I had actually been in the fingerprint market for like 10 years. So I have known Ulf, known DJ, known Marcus for quite a long time, for over 10 years. So I know on the first day when I joined this company on November 1st, it is a great team and great product. We have a fantastic product. So I believe that we will work great together. We will achieve some great achievements together. Thank you. That's it.
Thank you, Josh. Thank you.
Thank you.
So you will hear more about them speaking later on for their respective regions, so. Yes, yes, yes. So I mean, we believe to enable the best biometric technology, protecting data, very important in today's society, protecting information, protecting people in this digital society. That's our vision. And that's where we work every day when we make the highest security sensors out there. Of course, our mission is to provide these advanced fingerprint sensors with uncompromised security to enable user-friendly. You still need to be able to use them. And still need to be able to authenticate yourself, verify yourself. But it's also very important that it actually works together with a system so you can actually protect your data and information. That's what the company is aiming for. And that's why we are in, for example, India, for example, China. That's why we are in biometrics.
So we actually secure that. I think many of you know the history better than I do. I've been in the company two years. But I think if we look at where we're coming from, I think the company was founded in the year 2000. And of course, there was a product R&D. And there's a product definition and making the product. But I would say between 2010 and 2019, you actually were in an R&D and product phase. So very important steps in making a great company and a great product. There were product and prototype development being made. It was engineered in Seattle with the software attached to it. The revenue growth was there in the beginning because NEXT Biometrics, we had a laptop manufacturer called Dell where we delivered very good products to. And this taught us to actually get a product that can be manufactured.
It can have a high yield so we don't waste and optimized in cost. So we actually, and during this phase, I believe the products were sold in millions of units, which actually helps and is a prerequisite to actually take the next step, which is more a turnaround phase, I would say. So the FAP20 were launched. Fantastic product. And that's where we're based our most sales of today. We looked at being a bit more customer-focused. And we start measuring the design wins, as you see. We are now at 46. We are taking one customer every month, every month. We don't stand still. All the sales, even if we have a good base, they don't stay still. It's very important. During this phase, we reduced the OpEx. And we believe that we see that we have a stable OpEx today.
We don't see, with the pipeline and the contracts we have today, we don't need to increase OpEx. So very good fundamental in the beginning in this turnaround phase. The company also focused on fingerprint sensors only, not doing end-user products, not doing payment cards or smart cards that is low margin, very, very low revenue. We revised the go-to-market to India and China, which has been playing out quite successful. We see the foundation right now. So where are we now? We are in a scale-up phase in 2024 and ongoing. We have the disruptive FAP20 sensor. It's totally different from anything out there. Marcus will explain a bit more. But it's in between an optical sensor and a capacitive sensor. It has some unique features, which is very, very key for the success of this company. We have those parameters.
We'll go through that a bit more. Now it's time to realize the revenue potential we have in the contract. Now it's time to start delivering on those contracts. That's where we are on the verge of that. That's the scale-up. We will, of course, see increased revenue from the others. We have 46 design wins. Some of them, even more, will actually start taking up more orders. Then, of course, it's mandatory to have the first step. I mean, if we can't produce it at the high yield, if we can't produce it with low power consumption, with the best coating material, I mean, the scale-up phase will not work. We have all the technical parameters that we can scale up this company.
It's starting, I would say, it's starting last quarter because actually we saw the first orders coming in from both India and China in that area. That's where we are. So just a little bit how I see it. Now I'd like to turn over to Eirik going. Yeah, you can do the green. Yes.
Very good. Thank you, Ulf. Good morning to everyone if you didn't follow the first Q4 presentation. Ulf mentioned that from the period in 2010 to 2019, there was a lot of activities going on, product development. As the OpEx spending was very high, it was difficult to see a clear path to break even or profitability. Also, Dell, late in the period towards 2019, they announced their decision to reduce the spending on NEXT sensors, which brought revenues down during that year. That's when I came in in December 2019. Then we really needed to see a strong reduction in the OpEx . If you see this graph, which represents the last 12 months' OpEx spending from 2018 to 2020, the average level per 12-month period was around NOK 155 million. Obviously, this is unsustainable. We saw that.
We needed to cut the OpEx . We did that. We did it in a big way. The smart card R&D was reduced and also the number of employees and also kinds of business and service costs. So now we have this OpEx level, which had been ranging around below NOK 60 million per year on the last 12-month basis. And now we're going to bring it slightly up to NOK 65 million. That's the target. But if you look back in that period, there was another problem. The gross margin was too low. And in fact, the average gross margin during that period was slightly above 20%. And as you can see in this last quarter, we have brought it to 45%. And we already explained in the quarter four call how important the FAP20 product is for us.
Now we're also looking into the FAP30 product. This, obviously, is very important from the financial perspective. With this, we turned to EBITDA or Adjusted EBITDA, Earnings Before Depreciation, Interest, and Taxes. During that period, there was large spending on product development. As you can see, both bringing down the OpEx and improving the gross margin has brought the EBITDA from more than NOK 30 million per quarter to now at NOK 8.3 million. So there has been a substantial improvement. But as we will talk about more in this presentation, it's actually the revenues. We haven't had that large improvement in revenues yet. That's to follow now.
Then you really see the effect also on the EBITDA because we're not going to increase our OpEx . Maybe it's going to be up to the NOK 65 million on the last 12 months. We're a little bit below that right now. But then every revenue dollar coming in, you just multiply it by 0.5. And then that's adding to the bottom line and the Adjusted EBITDA. And also, if you look at the depreciation and the other costs down below the EBITDA, then we don't have a lot of cost. There is not a lot of depreciation in our company. And we don't need to invest. We have the capacity we need. So I think what we're seeing in this graph is really the analysis of the past.
Obviously, the future is the most important for NEXT and, of course, for you investors as well to look at the possible scenarios that could develop, and particularly the market segments, the potential and the market position of our product in the different markets. That's what's going to form the basis for the future revenue, gross margin, and EBITDA. This is what we will present today going forward. I think really the investors saw our progress. There was a totally different sentiment from in the. You can see it in this share price graph from, let's say, December 2020. That's when things turned. We have had some quarters where we didn't progress a lot on the revenues. But I think that's both on the revenues and the gross margin. That's where you need to follow going forward.
Then I think that will be a very interesting topic also on the contracts and the new announcement that we do. With this, I will turn back to Ulf.
Thank you, Eirik. So yeah, where are we? I think we are in a biometric market with double-digit growth. I've been enjoying the biometric market the last 10 years. I continue to enjoy this growth. That's why I'm here. Today, it's dominated by a few major players if you look at total biometric market and many midsize, where we are one player of that. We, of course, are looking at the high-end segment of the biometric. There's a lot of 1 billion sensors sold to the mobile phones. Very convenient, not so high security. We are in the opposite scale of the security part. We have a high security. We are competing with sort of the IRIS part of the security. Maybe just a small recap. The most secure part of your body is the DNA.
If you have 9 billion people in a row, there's one person that has similar DNA to yourself. With iris, if you have 1 billion people in a row, one of that 1 billion will have the same iris as you. With fingerprint, if you put 1 million people in a row, there will be one representing the same fingerprint as you with the minutiae points that we're looking at. If you take voice, it's 100,000 maybe. If you take face, even less. That's the security level you have in biometrics. Even your walking style or the heartbeat is unique for you. It's biometrics. Everything is biometrics. It's just a matter of measuring and calculate. Of course, it takes a bit of time to present your DNA to enter the door, right? So that's why it's more convenient with the fingerprint.
Where we are competing is with the iris because it's a high security part of the scale. It's used for high security, like in India. When you enroll an Indian person into the Aadhaar System, you present 10 fingers, 2 eyes, the iris of the eyes, not face, not voice, no nothing else. 10 fingers, 2 eyes in the database. Highest security. That's where we are in the market. Of course, the global trend in security is always increased security, no matter if you go to the airport or whatever. Increase the security all the time. Spending will increase. That's why it's a double-digit market growth. There are alternative technologies like optical. It's a higher cost, slightly lower security.
If you compare to in this market where we are, compared to the consumer segment like your mobile phone or so, you have an 18 to 24-month cycle where your replacement cycle. That's not possible in a border control system. They will not replace that for three years, five years, same as the Aadhaar System. I mean, they will not replace this sensor in this kiosk. They will not replace it after 18 months. They will replace it if it's broken or if it's actually tampered with. Then they will increase it or replace it. But once you're there in our high-security industry, the stickiness is far better compared to the other technologies and the other consumer electronic markets. That's the market dynamics we are acting in. I think the Q4 was just announced. We are growing, as we see, in quarterly revenue.
We're still at the negative EBITDA, yes. But gross margin and revenue is growing. And OPEX is on track. And with the outlook, we see India is ramping up. We have the first orders. We have China ramping up in Q1 and continuation of adding design wins. With high-end security means high gross margin. Those are the customers we're targeting. We are not targeting a door lock manufacturer in China who is buying a sensor for $1.50. That's not us. We are looking and targeting high-end market. And repeating, we are targeting EBITDA positive 2024 and break even Q2 this year. If you look more okay, we're here and now. Where are we heading? Of course, my job was to since I was heading up the sales and marketing, I set the foundation. Now the foundation is set.
I have sales guys out in the regions bringing in orders because we have the contracts. Strategic direction, of course, we would like to establish ourselves in China even more. We would like to increase not only healthcare, police, e-locks. I think Josh will explain more about the different use cases that are available in China. Of course, I had got a question in the Q4 call. Where are we heading? Africa, for sure, and Southeast Asia, where we have Indonesia. It's the fourth largest populated country in the world. They are looking at implementing an Aadhaar-like system. That would be quite a few sensors. Nigeria, they have a few sensors. They have a specification called NIBSS. We are compliant to that. We are, of course, targeting to enter Nigeria. It's a large population. We have a partnership with a face company called Paravision.
Of course, we would like to extend that because there is multimodality biometrics. Once you go from selling a sensor to a solution, which we do in China, maybe like in border control, last time I entered Japan, yeah, you present your face as a picture. They're verifying that against the passport. You're presenting five fingers. That's it. But if we could be the provider of both those systems, of course, our ASP will increase. Of course, that's one direction. I also see other business models. Today, we sell sensor only. But there's, of course, room to sell solution. We can collaborate with another partner doing a bit more integration. So we're actually going to the table to a customer with a higher ASP. We take a bigger part of the margin, and of course, into other segments. And we will present the product roadmap later on.
We can explain a bit more on new segments and so on. This is the baseline. We're ready to expand from here. I think yes, let's go out and grab a snack. 15 minutes, I think. 20?
Yeah. So we will reconvene in this room in 15 minutes, which is slightly yeah, 12:17 or so. Yeah. Thank you.
Yeah. All right. Okay, let's go. We got the green light. I hope the ones online still are online. There's a Q&A in the end, and the ones that are online, you can type in your questions and answer questions so we can answer them after the part. I would now introduce Marcus Laurén. He has a lot of gadgets with him. He is a Chief Product Officer, so he is responsible for the product, as we said before. So he will start the presentation with whatever. I don't know how to. With the green button. Yeah, exactly. With his introduction. I don't know. Let's see. Where do we start? Here do we start.
Hello. Marcus Laurén. That's me. I'm working with the products. To make it a little bit more fun, you might be tired now after the lunch, let's have something to look and feel on. I want to remind you again, if you want to look and feel more, we have a table just outside here. So if you want to ask some questions, hopefully I can answer them. In the meanwhile, you can, it's Valentine's Day, and this is my present to you. So if you want to, you can bring one of these sensors home. It's very difficult to pick them up, so I'll use this cool vacuum tool. So then it's easy to just pick it up like that. So this is our sensors. You don't have to take one if you don't want them, but take them if you want.
So you have something to remember from our little press, the vacuum. Yeah, and then you get it up. This is what it looks like. Now you can see how small, delicate, and brittle they are. I want to just pass them around and you can ask questions anytime. Just interrupt me. I just want to tell you a little bit about some things that are so obvious for us that work with it every time, every day. But I realize that that's not the normal world. This is my normal world, and this is the world that I'm living in. Basically, I want to talk about three different kinds of technologies that you can use for fingerprint sensors. If we start from the left, we have the capacitive. Those you've probably seen in cell phones.
Like before Apple had Face ID, they had a capacitive sensor, and most other cell phones had the capacitive sensor. They are very small. You can make them super small, and you can also make them pretty cheap. At least if they are small, you can make them cheap. They are pretty good. And you can, they're good enough. They're secure enough for opening up a phone. It's not too much secret on that phone. And it's a lot of high competition in that area. There are a lot of people that are making these capacitive fingerprint sensors. So it's a tough area. Very difficult to get any margins at all. Then we have the optical ones. They are typically big and bulky, but they're also very good. Those are the ones that Ulf talked about when he was traveling to Japan, or if you travel to the U.S.. Really big. They're big like palms. You can take all your fingers.
You can take four fingers or five fingers, or some can even take the whole palm of yours. Because also, not only the fingerprint, but the whole palm has kind of fingerprints, so it can be even more secure. They can be really good. They can be really good, and they can be really expensive. And since they are big and bulky, they're not really—you can't carry them around. So they have pros and cons in everything. You see them in border control. They don't change them very often. They're very expensive. High margin business, but not very big volume. That's traditionally. Then we have Active Thermal, and that's what we are having at NEXT. So of course, now I'm boosting that, but it doesn't mean it's not true. So we have a unique technology. We're not looking for a picture like the optical.
We're not looking for how different the capacitance is in the fingerprint, ridges and valleys, stuff like that. We are basically measuring temperature. So it has its pros and cons, and we see it very much pros because it's very stable. If you compare to capacitive, there's a lot of signal-to-noise ratio, basically what you want to see and the floods of signals you see. So it can be difficult to see anything from the capacity. We didn't have that problem with active thermal. We have a really good price level. So you can make them, we cannot make them super cheap. So even if we make them super small, we can't stand a chance to capacitive. So that's not where we want to be. But if we make them a little bit bigger, then ours are really good in price.
If we make them even bigger, they're still good in price. If we make them even bigger than that, they are really good in price compared to even optical. That's where we try to be. Where can we be really good in price? How much does it cost to make them, and how much can we get the margin when we sell them? That's what I mean with high margin and with mid volume. We can also have even super high margin for small and low volume where we fight with the big guys, with the big optical guys. I was about to say next slide, but then I remembered. Just to see, cost-related to size. Bigger is better. That is true in the fingerprint technology. That basically means that the bigger picture you take of the finger, the more security.
If you want to recognize me, maybe if you only see one eye, maybe someone can recognize me. If you see half of the face, more people even see the whole face. It's even better. It's the same analogy with the fingerprint. The bigger fingerprint sensor you have, the better, because the bigger part of the finger you can compare is really the enrolled finger. Is it the right one? Just start with bigger is better. We see also that bigger is more expensive. Material cost. That's also, we can't really go away from that. If you make it bigger, it will cost more to produce it. How the cost grows is a little bit different. If we start with, I compared with the silicon-based, they are the capacitive. They can be really cheap if they're really small.
But if they are getting bigger, they are getting expensive. So that's why you never see any big capacitive sensors. If you look at the optical, they can never be really cheap because just to make it super small would make it really expensive because you need a camera. So even if you only take a small picture, you will still need the camera. So they are not competitive in price until you get them really big. But then they don't grow very much in price because the camera is there. And then we have our LTPS. That's a nerdy name. I should have written Active Thermals. This is Low-Temperature Polycrystalline Silicon. This is what we are working with. So we're trying to look, where are we competitive? Here, it's cheaper with the capacitive. Let's not go there. And somewhere here, it will be more cheap with optical.
So let's not go there. So our products are typically here and here. And of course, that's the next step we should be. But I will come to that. So just trying to tell you about how does the cost grow with size and how can we charge? Because people are more interested in paying more for bigger ones because they are better. Just how the arrows go. This is a simplified version. It's not super true. There are things with yield, so there are, it's not a super straight line. But to make it simplified, and it's close to the truth. So why is it so good with our Active Thermal? And who else is doing Active Thermal? As far as I know, no one is. We are doing Active Thermal. So that's why we say we have a disruptive technology. It's only we doing it.
It's super great, and it works like a charm. If we look at other, for example, the capacitive sensors, if you had wet fingers on your iPhone, you couldn't open it. You had to, "Oh, I'm a little bit sweaty now. Now I can open my iPhone." We don't have that problem with Active Thermal. Works pretty good. Sunlight, the optical ones, since it's taking a picture, if it's outside in sunlight, it will not work very good either. We're not affected at all by sunlight. It doesn't matter. Liveness or anti-spoofing. And we also have different security levels, so to speak. So we can add and we can remove depending on what the customer wants and how convenient you want it. But even to start the fingerprint sensor, there has to be a finger-like thing on top of it.
I say finger-like because a finger works in a special way, and it reacts to temperature and capacitance and so on. So if you put something else like a spoof or a fake finger, it will not even look and start and look for your fingerprint. So those kind of different security levels we have. Then we also, if you compare to optical, the big ones in the border control, they take a picture. And the picture is basically as if you had ink on your fingers. You've probably seen it in movies and probably not experienced it yourself. But when you dip the finger in ink and then you take it on the police station, they have the fingerprint, and it's either black or white. No grayscales in that ink. And it's the same thing with the optical. You get either black or white.
There's a fingerprint, and there's not the fingerprint. With our Active Thermal, we can measure the ridge and valley. It's not like this, either black or white. The ridge and valley in the fingerprint, it grows, and it gets bigger and smaller. So we can get all the values in between, not only 1 0. We can get between 99, 98, 76. So then you can really see that it's 3D. It's not a 2D picture. It's a 3D, which also makes it more difficult to spoof. Then, of course, you can add on top of that different algorithms to really see, "Okay, does this look like a finger? Can that be a spoof? Can we see some anomalies that are not normal in a real fingerprint? Can we see the sweat pores?
Can we see the sweat pores growing or something like that?" So you can really see that this is liveness. This is a live finger. So it's all depending on how you configure the software. Then low power consumption. That's also very good if you want to have something with battery. Then you don't want to have it plugged in. Then it can't be moved. And our fingerprint sensor has a very low power consumption. So it works. There's a portable machine outside there, and it's hardly even portable because it's very heavy. But it provides electricity via battery, and it works like a charm. So some of the advantages. How does it work then? Active Thermal, the area you're seeing on that small, the giveaway for me. It's super small. Yes, it is. And it's super dense and packed with small sensors.
It's so packed that we call it 500 dpi, dots per inch. So every inch, 500 dots where you actually measure to get a real good picture. And if you convert that to centimeters or millimeters, you get almost 20 pixels per millimeter. So in every millimeter, you measure 20 x. So I mean, what I'm saying is it's a lot. So it can be a really good picture. And that's a standard, a high standard. And to some of these certifications, I will show you them later. They have standards. We have to have 200, 300, 400, 500. And we have 500, so we can cope with those high-set standards. And of course, the more you have, the more expensive, the more advanced. So we want to be at that high-level area. And then what happens is basically that different materials conduct heat differently.
So in those 500 dots or 500 measurement points per inch, we can measure the temperature. And we can see how if we send out some heat and then they measure how much is coming back, then we can see the difference out. Oh, it's probably air in the between there. That's probably where the finger grows like this. Then it's air. Or no, now I have really close to the finger because it reflects the temperature just like skin usually does. So from that figures, we can figure out how to make like a value for each of those 500 dots per inch. And then we take the values, and we digitize it and make a picture. So that is a little bit how it works. You measure in a lot of dots how it reflects heat, and then you get the picture. Does it make sense?
A little bit? Okay. So this is nerdy, I know. But it's also kind of interesting, and it's a big part of what we do. I said that we are doing active thermal. No one else is. Why is that? Is it good? Is it even good then? Why is it just you? Because it's very difficult. It's very difficult not to do it, but to do it good. That's difficult. So what you typically want to do, you want to have this sensor really close to the finger. The closer it is, the better picture you get. So in a perfect world, I would just be touching to the semiconductor layers. That would be the easiest. That would be a super good picture. But they are fragile. So you want some kind of protective coating on top of that. But you don't want a thick coating.
You want a super thin. So we can still have it very close to the finger. It still should transfer heat as expected. So we can't put anything on top of that. We have a really great team in Seattle that are working with this. They've made this fantastic recipe, which we have patents on, that is super good. It works like a charm. It's also super thin. If I tell you the numbers, it doesn't say very much. At least it didn't to me. I asked, "How thin is it?" It's super thin. This is a human hair, the big circle. This is a human Swedish hair. That means thin hair. Not Asian are maybe this thick. They're much thicker, better hair quality. This is, yeah, my hair, my thin hair. This is how small things you can see.
After that, you cannot see it. I'm talking about 20-year-olds. I can hardly even see a hair. Then white blood cell, pretty small. Red blood cell, even smaller. Average bacteria, this small. And this is the thickness of our coating. So it's very thin. But it really works. We have something that we call the DLC, Diamond-Like Carbon. And just as a sound, it's super hard. The atoms are, it's just carbon. So that's not very hard. But if you have carbon in a special organized way, then it becomes a diamond, and then it's super hard. And it's very close to what it's in a diamond. So it's super hard. And you can make it super thin and still be super hard. So that's really good protection. And this is something we're working on. These kind of, it's so thin.
It's like, "Is it even worth talking about?" Yes, because it makes a big difference. To be honest, we've had a problem with that a couple of years ago. We didn't have that good coating, and it didn't work very well. They were not so robust. That is the small improvement that makes a big difference in the end. We get the better name. We get better robustness. We don't get any field return. It works really good. That's why I want to show you these super small things, so small you can't see in, but it makes a big difference for us. Of course, is this the only thing you got? No, we got other things too, which are even cooler. The patents are not ready. The experiments are not completely ready.
So let's see when I come back with something even better, even thinner, even better protection. The lineup, the products, maybe you've seen them outside. But basically, it's different sizes. It's the same technology in all of them. We have Active Thermal in these different products. We have different sizes. We have a small size. And then we have actually an even smaller size because there were customers that wanted, "Can we make it smaller? Can we retrofit in something we already have?" Yeah, okay, we can make it smaller. But we prefer to make them bigger. So then we did the FAP20. This product has many names. And we say FAP20 because it's easy to remember and it's easy to say. And if we look in the detail, it's called something completely different, which is more difficult to say. But the FAP20, it's not our invention.
FAP20 is a standard size. Like you have A4, A3, and those kind of standard sizes on paper. You have the same here in fingerprint sensors. So this is a standard size that is required if you have a certain level of security. Okay, we have this level of security. We want to do it for the bank. Then we need a FAP20. Then there can be other standards. Okay, we need higher security. Then we need a FAP30 or 50 or 60. There are different standards. And the big ones with the four fingers, I think they're FAP60. So we adapt to the standards that exist and make something in that segment. This is also. We can see it outside. This is a done deal. It's an out-of-the-box product we actually sell.
You can buy it online if you want to, plug it into your laptop, and use it for opening the laptop with the Windows Biometric Framework. It just works like a charm. But as Ulf said, we are moving a little bit away from selling, I mean, directly to customer. We are trying more to sell this and then make a manufacturer to put it into a box and then sell it to customers. So that's where we are now. We think it's more profitable, actually. A little bit about the lineup. And these are our products. And outside, you see both our products in different stages, all from you see outside here what I showed you, and also from final products from customers that made a final product of our modules. Different certifications. Ulf talked about it earlier also. It's not only a door opener.
It's like the door is completely closed if you don't have these certifications to some rooms. They won't even talk to you. "Do you have this certificate?" "No, we don't." "Okay, then talk to someone else." So a very big one and very important one is Aadhaar System in India. They have different levels. They started with L0, the level zero. Then they go on level one, the L1, and there's coming an L2 for next level of—and every level, it increases the level of security. The current version is L1. That's the best, latest and greatest, and the best one that is out there. And we have the L1 certificate, which means that even for the most high-end users in India, they can use our products. So we are super happy for that.
I don't think we have very much in Europe on the certificate that's like a global one, but at least they have in America. So FBI made the PIV certification, which also has a level of security. And we have that certificate too. So we are okay in the U.S.. And then as we talked in Africa, the market in Africa is getting bigger. Africa as such is not getting bigger maybe, but the market is getting bigger. So Nigeria has this NIBSS, also cooperation between banks. So that's also a certificate that we have achieved that we're super happy for. And of course, what I'm—this is the current one, the newest one, the China ID. I can't read very much, but I can read the date at least. I promised Ulf I would get this certificate in 2023 before Christmas. I didn't really manage.
We were kind of done, but we didn't get the papers until the 12th of January. So I failed there a little bit, but I also succeeded at least getting it. So we're super happy. And the customers were also very happy. We actually got customers on this product even before we got the certificate because they knew that, "I know it's just a paperwork. It takes time in China. We know if you pass this, you pass it. You will get the paperwork." So now we're super happy that we have yet another certificate, which is a door opener to not a new world, but a new segment in China. We have been big in China even before, but now we can be even bigger. So yeah, I'm very happy. Okay, product development. You remember the picture I showed before, how the price rises with size.
This is where we have the products we have now, the gray ones. There's a gap here. This is a new one. That's a new one coming, the FAP30. It's also a standardized product. There is already a market for FAP30. It's a little bit more high-end market. It's a little bit more expensive products. If we look now, what we're competing to is basically optical sensors. The optical sensors are, as you see, they are more expensive. They are bigger, but they are also more expensive. So if we can make this cheaper, then we think we can sell them cheaper than maybe that they make them for. It looks very good. It looks like that is the place to be. What we're doing is we've been working actually on FAP30 for quite some time.
We have been using the same basic kind of technology as we have before with Active Thermal. It doesn't cost very much more than the smaller ones. Our curve here is pretty good. We think we're going to do it very, very competitive price when we make it and with good margins. If we look at how it looks, this is the FAP20 you've seen. This is the black. This is the total size. If you look at outside with the green PCB, this is the total size. This is the size you actually touch. This is where you put your finger. Then the FAP30, it doesn't look very much bigger, but it is. It is much bigger. The black area here is actually much bigger. If you look, I just turned it like this.
You don't see it that it's bigger, but if you turn it like this, you can see that it's a lot bigger. It's 67% bigger. But if you look at what we pay for, this is the area we pay for, the red also, then it's only 50% bigger. So we pay 50% more in material. Yes?
So just a quick question. Is it so FAP20 costs a certain amount of dollars and it's increased by 50% FAP30. Is that the direct correlation between the cost producing the 30? I mean, not direct, but it's.
Yes and no. To this cost, to the cost for the red material, yes, that's a direct correlation. But to the total cost, no, it isn't because we also pay for the components around it and they are the same.
Okay, so let's ask it a different way. If FAP20 costs X, what's the FAP30 cost? Is it X plus 50%, 60, 70, or 2X?
Much lower.
Okay, thank you. And as far as I can remember, the outprice for FAP20 in the Western market is like $20-$23.
Yep.
But if I just saw some figures on FAP30, it's about 65-95. Is that the part, right?
Yep. Yep.
Okay, thank you.
So it's a big deal. We think it's not going to be that much more expensive. I don't know if I should reveal exact figures, but it's not going to be very much more expensive. But we think we can sell it for much more expensive. That's a good combination. So we think it's profitable. So that's where we think we want to be. This is a good place to be. So new market for us. We haven't been in this big size before. That's a new market. We have the connections. We're talking to the customers. The customers we are working with already now are also working with FAP30 but haven't been able to work with us on FAP30. So we already have the connections. So it's not that we're starting from the beginning.
The difference in applications? [audio distortion]
The difference, it's for even higher security. It can be, for example, if you want to enroll your finger, maybe they want you to do it on a FAP30. And if you only want to identify yourself, then you can do it on a FAP20. It can be those kind of differences. But it's also governmental, bank, those kind of high-end. So it's not going to be on a door lock or something like that. So it's high-end, where they are more used to pay for higher where they are willing to pay for higher security, basically.
So it's not for 50% triggered fingers? [audio distortion]
No, no, no. Not that. Not for fat fingers. But it will work for fat fingers too. All right. So just to summarize the technology, what I wanted to share a little bit. There's a disruptive sensor technology. We are doing it. We are doing it really good. And that's why it's unique. We're doing something really unique that really works good. We have a cost competitiveness. You remember the curves. If you see it in different segments, we are very cost competitive. And that's always a good thing. We have mature manufacturing. We have millions. We have mass-produced. We've seen them. We've sold them in big volumes. We've seen them work in big volumes. And they have been working now for a couple of years. I mean, it really pushed the boundaries, for example, in India and China. So we know that it works. We do big size.
Big is better. The bigger, the more secure. So addressing that market, that segment where you want it to be more secure. We have a really good protection for liveness and anti-spoofing due to our technology, the 3D print, how it works with the finger and the finger-like way of working and how the mechanics work. We have the major certificates. When we did China ID, I thought, "Okay, what more certificate? There are no more certificates? Okay, good. Then let's improve our product more. There will be more certificates. So we are prepared for more." But now we have all the certificates we want to. So I have no more certificates on my to-do list yet. They will come. I'm sure Ulf will find some more. But until now, we haven't found any new certificates for us to fix. We are well-positioned. We have a good reputation.
We have products that people want to buy. So that's also really happy. We see the sales team. You're going to hear from Josh and DJ. And they have met the customers and they are really happy with us. So that's super. And even for newer products, we already now have customers asking, "That FAP50, is it now?" No, no, no. It's not ready yet. We just started. It's ongoing. It's coming. So they're really eager to get the first samples of even the coming products. All right. That was short from me. And of course, any questions, you can bring them up now or later. And I will be out by the table also if you want to see any details or ask me some tricky questions. Yes?
Could you please tell us something about the IP situation? The IP of the company? [audio distortion]
The IP situation? Yes. We are working a lot with patents, of course. We have patents already. We are filing patents. I actually approved, not approved a patent, but I approved the continuation of sending in the patent requirement this morning. So yes, it's ongoing and it's important. So we have a growing patent portfolio.
Which part is protected? [audio distortion]
Different parts. For example, now this one this morning is not granted yet, but it's on the coating. It's super thin. Doesn't look very much for the world, but it's super important. So we are patenting in that. So it's widespread.
And the active thermal principle, is it protected? Not the active thermal. [audio distortion]
We have to come back on that one.
Yeah. It depends on how you interpret the use of the silicons. I will dig deeper. But I mean, a lot of the part is that it's difficult to do. So no one has managed to do it. Even if we're telling what we do, we have managed to do it. I will look into it deeper. Yeah.
Okay. Thank you.
Thank you. Pause picture.
No, it's me.
Okay. Thanks a lot. And please don't hesitate to ask anything out by the table.
Yeah. Okay. I would like to just we touched upon it before this lunch on where the market dynamics are. But I would like to show you a bit more detail on that and why we have selected the four different segments that we're in because they require different technologies, different requirements in each area. So I mean, this is a graph stolen with pride from Straits Research. So we have a base here. And you see the double-digit growth over the year. And this is for the fingerprint sensor market, which is then a big number and growing. So it's $3.8 billion in this. Then, of course, it's calculated in certain ways. But it's growing. And with the security, as I said before, it's growing. And it's because of security threats.
People are trying to manipulate with the devices. It could be maybe not the border control, but it could be in a more public way. I mean, there's a reason in India why you move from L0 to L1. The differences between L0 and L1 is that it's hardware tamper-proof. So you cannot unscrew the device and manipulate with it. You cannot read out the or you cannot listen with the traffic between the sensor and the Aadhaar database. That's now encrypted and you cannot screw it. So that's rapid growing security threats everywhere in the industry. Same with China. They are now moving from a certain standard to the FAP20 standard size due to what Marcus says, the size, the security, the higher security. We see that in logical access. So the type of turnstiles, the border control, logical access such as log into their PC.
You have a USB token maybe that you actually need to have your fingerprint on to actually log into the system. You have a dual authentication system. All that is actually increasing in security. And biometric is a big part of that. It's actually the solution to many of the threats. Same as government. You see, as I explained before, you have dual biometrics, multimodality biometrics entering. Yeah, I think it's also U.S., but Japan, for example. I mean, face and fingers. You see these increases all the time. That's one of the reasons why it's improving or growing. But also you see additional biometrics in financial services. You see, take an example again from India, Indian banks. They are now actually mandated to have biometrics for the employee to actually be enrolled in the system, of course.
But when you do verification of a transaction, you actually need to place the finger on the fingerprint sensor. Same in China. If you go to the bank, there's a fingerprint sensor. And the personnel actually log into the system with the biometrics and authorize a transaction with the fingerprint sensor. That's where we are replacing today. If you go to a local branch bank in China, Josh can talk more about that. There's so much biometrics in both India and China. It's everywhere. And when we saw COVID, we see if you look at market trends, you see, okay, then you increase the number of contactless modalities. So you see also if you travel between borders, you see that you actually do facial scans both with temperature as well as the surveillance type of biometrics that is actually increasing. So that's a part of why it's growing like this.
So in these different market trends and market parts, where does NEXT fit? We have selected and pinpointed four different segments. I think you've seen on our website. Those are the four segments we are in. We have public security. So anything from governmental, we have how you walk into a certain area, restricted area. We have payment of fintech. What you see here is actually the device that a Belgian company is doing. It's a crypto wallet. It has our sensor in the back. But we also have a lot of point-of-sale terminals out there, both sold in India. There's a few sold in Ecuador. There's a few sold in Morocco. If you look at those design wins going backwards a bit. All these point-of-sale terminals actually then have a biometric fingerprint sensor and it's making the authorization for a transaction.
If you want to go on a train ride in India, you actually need to present your fingerprints by a ticket. And then you verify that it's you that's going onto the train. One way of controlling who's actually going where. Access control. We have a few. If you look at the historical design wins, we announced last year an access system for a Belgian jewelry shop. They actually have an access system for the safety vault or the, sorry, storage as well as for the manufacturing. So the personnel needs to log in with a biometric fingerprint to actually get into the premises and to handle the diamonds or whatever it's in the jewelry. And then we have the I think it's the first design win, recognized design win. It's the office and notebooks. So it's the laptop PCs. We have a few models.
We are still having a good basis on that segment. Still not competing with the consumer laptops and consumer convenient sensors, I would say. We're still in the high-end segment. For I take Japan as example again. The laptop sold or sold to the insurance company. It's mandatory to log into the security systems in the insurance company with a biometric fingerprint. You cannot do it with a password. You need to have your fingerprint. Same in the U.S. They have a FAP20 size sensor for the government logging into the system by biometrics, high security biometrics. Of course, then there's a lot of consumer electronics, maybe which have small convenient sensors. They are not allowed to be in the governmental area. So that's the four segments. So our products are tailored for the different ones. So I mean, there's different requirements in the different segments.
We have streamlined and made our sensors available for each and every segment. Starting, I'll just pinpoint a few. Presentation is online. You can read. I mean, for public security, I mean, for border control, it's extremely important to have very high security. There will be zero capacitive sensors in that area. Zero. Optical, yes. But then again, big and bulky. Liveness, of course, that gets more and more important that you actually see that it's a live person. If you look at the payment and of course, then it's very important that you actually have a low power consumption. We need to optimize the power consumption for the battery-enabled point-of-sale terminals. There's one device outside as well. It's a battery-enabled. It will not be able to contain an optical sensor because that consumes way too much power. Then we have access control.
Of course, then it's more important that it's immune for sunlight. It's very important that you actually get into your, like the diamond room or the storage in the Belgian jewelry store. I mean, you don't want to stand there trying to get in five minutes. I mean, it's mandatory to actually open the door immediately. Then special requirements for the office and notebooks. It's most likely that it's actually sleek and it's the right color. It's color matching with the actual design. Still, high security level on all the different segments. Now I would like to hand over to Joshua. No? Sorry? One more?
We will have now the 7-minute break before we will then, after this, have the presentation of the China market and India and the rest of the presentation.
Yeah.
There is some more lunch outside there in the case someone didn't get it.
Then I would like to—are we online? Yes. I would like to introduce to you Joshua. He's based in Taiwan, heading up the sales in Southeast Asia, including China, Japan, Korea, and so on. He will present a bit more detail than we have done previously on China.
Good morning, ladies and gentlemen. My name is Joshua. I'm the head of sales for South and East Asia at NEXT Biometrics. Today I'm going to introduce our progress in China and why China is so important for NEXT. We foresee that in the coming three to five years, China will provide the main source of revenue to NEXT. Now, why is that? From demographic points of view, there are 1.4 billion population in China. Biometrics is in their everyday life for all kinds of applications such as mobile device, banks, police station, asset control, and a lot of IoT applications. The market of biometrics is huge, and the demand is growing year by year. Due to the government regulations and policy, the demand of biometrics, specifically the high security demand, is increasing.
People in China embrace all kinds of new applications of biometrics, which leads to a stable growth of biometric demand even under the economic downturn. China is currently the global leader in biometrics, and every China company has a global agenda. In fact, almost all of our overseas customers outsource their production in China. So most importantly, we have identified a niche market for NEXT, which is high security and large sensors are needed. Next, please. So what have we done? In terms of market, we have identified the right market for NEXT where live finger verification and large-sized sensors are needed. And with the identified market, we prioritize the product development to make sure that our products are competitive for China ID customers. So there are two milestones we have recently achieved in China.
In after two years of hard work, NEXT finally awarded the China ID certification, which makes NEXT eligible for participating in the China ID market. With the entry ticket to the market, we have made a new market strategy focusing on the profitable niche market. We have built up a multiple strategy partnership and also signed several large contracts with the OEMs who will bring us the sustainable growth in the coming years. In terms of partner, we recently have started to work with the most experienced distribution partner in Asia in this industry. We believe that with the partnership, we will acquire a lot more opportunities together. In some selected areas, we will also improve our position in the value chain, which is to work directly with the end customers who will bring us higher margins and higher profitability.
Finally, we have decided to increase our local support to the customers. All of these efforts have made sure that NEXT is ready for the growth in China. Next, please. For applications acquiring high security, live finger verification, and large-sized sensors, it's mandatory. NEXT Active Thermal Technology, which requires live finger verification, is actually the perfect solution for this market and is the core technology that helps differentiate NEXT from the competitors. You can see from the comparison below, NEXT has the most competitive sensor produced based on the LTPS process. The market we have identified and focused on is the large-sized sensor market of China ID, banking, and police, where fewer vendors are in and profit margins are high. Next, please. With the core technology and correct market positions, we have made a right market entry strategy.
We used to work with the key distributors to have the business with the OEMs. But with the new market entry strategy, we have decided to work directly with the key OEMs and partners in some selected markets. With the approach, we will be able to communicate our most advanced technology with the customers directly and get an opportunity to sign in the early stage of the project. In that case, we will be able to build up the relationships with the OEMs and become a preferred partner for long-term business. So with the new approach, there will be several key benefits to NEXT. The first is that we will have access to the ongoing projects. Thus, we have better control over the business. And secondly, we will build up the partnership directly with the key ecosystem partners. And we will strengthen NEXT's brand recognition among the ecosystem.
And finally, with the stable business, we will further be able to build up a more cost-efficient supply chain in China. Next, please. So we have identified the niche market. What we have identified is that with high security needs where there is higher price and less competition, and most importantly, that NEXT products are ready for. Below, other markets we have identified. First is banking and fintech. NEXT's solution has been qualified by the key OEMs in the industry. They are the tier one vendors, and we expect the strategy partnership will enable the growth of NEXT's business in China. And secondly, social security and medical insurance. We have recently signed a strategy partnership with a tier one solution provider in China. And this provider has dominated the market in over 20 provinces in China.
With the partnership, we will expand the footprint of NEXT to a whole new market, and that will bring us additional revenue in the coming years. Finally, the access and border control. With the excellent performance of wet and dry finger and also the resistance of sunlight, NEXT has also developed a strategic partnership with the tier one vendors of access control and also the border control in China. We expect to obtain a volume PO within the second half of this year. Next, please. Let's talk about the partnership that we have recently signed with the biometric provider in Beijing. NEXT has recently signed an exclusive partnership agreement with the biometric vendor solution. The partner has, as mentioned, he has dominated in the medical insurance and healthcare industry over the 20 provinces in China.
With the agreement, we next expect that we will be able to expand the footprint to the whole new market. Why NEXT? Because the partner has seen the value of live finger verification of NEXT's technology. They will promote NEXT's live finger verification to the Ministry of Healthcare as a national standard. We see that the market potential for this corporation is that, for example, the 6 million devices to be implemented in the hospitals and also the pharma stores. Also the over 48 million retired military staff. They should be verified every year to enable us to receive the monthly allowance. There are a lot more applications here. We truly believe that the partnership will bring value to both of NEXT and also this company in Beijing. Next, please. A vision and strategy is not enough.
The long-term key to success is execution. So, we have actually made a plan to execute the market strategy in three phases. In phase one, we should obtain the certificate. We build up the partnership and prepare for the right product. And actually, this has been done in 2023 and early 2024. In the second phase, our goal is to supply reference samples to the key OEMs of banks and solution vendors of medical care and healthcare customers in Q1 2024 and also prepare for the ramping up in Q2 and Q3 this year. And then in the third phase, the ultimate goal is to get qualified directly by the banks, also by the governments, and we should become the preferred partner for long-term business. So in 2023, we have actually done a lot of good work.
In 2023, we have secured contracts with the estimated value of NOK 130 million-NOK 270 million over the three years from two Asian distributors. In the end of last year, we got the first stocking orders from one Asian distributor for the China ID market. More importantly, we have signed several key MOUs with the OEMs in the banking industry. We expanded our footprint to the medical and healthcare industry by initiating the commercial agreement with the tier one solution provider in China. Further, we also started the cooperation with the strategic partnership with top-tier companies for the assets control and border control. With all the good work done in 2023, we will have confidence that we will do better in 2024. Even though the macroeconomics in China in 2024 will still be challenging, but we believe that in China, the biometric market will grow compared with 2023.
The main reason is that the inventory in the channels has been consumed to a reasonable level, and the real demand will bounce in 2024. We are ready for the increased demand. In the first week of 2024, we have actually got the China ID certificate, and we expect more orders to be received in the coming quarters. With the introduction of NEXT to the new market, including China ID, medical insurance, healthcare industry, assets control, and e-lock, we expect to pass qualifications with these companies. This will contribute to a lot more revenue in 2024 for NEXT. Further, NEXT will improve the position in the value chain of the biometric industry from the sensor vendor to a solution provider, which enables NEXT to directly work with the end customers and become preferred partners in the ecosystem.
With all the opportunities, we will, of course, strengthen our local support to the key OEMs and partners by increasing our presence in China and get ready for the long-term growth. That's the end of my presentation. Thank you for your time, and I welcome any questions from you guys.
Okay, so do we have any questions from the audience here? Okay, and it's still possible to enter questions in the chat function on the web. We have some questions there, but so far not so many about China specifically, which we're going to cover now. And we had one question earlier about we got on the email. There's been some geopolitical tension between China and Taiwan. What does that development mean for NEXT manufacturing in Taiwan? Are you evaluating other production sites as well?
All right. Thanks, Eirik. Actually, a large part of the worst microchips and other crucial technology components are actually manufactured in Taiwan today and so are ours. So we are, of course, aware of this geopolitics connected to this area. But however, NEXT operations remain normal, and it is the business as usual. And actually, we are satisfied with our current setup and partners in the ecosystem. So we would be cautious about this situation, but the current setup is working very satisfactory from our side. Thanks.
Any more questions from here? No? Okay, then let's proceed. Thank you very much, Joshua.
Thank you.
Then we'll go to India.
Hello, NEXT investors. How are you doing? I am DJ or Digvijay Singh Kanwar, and I'm responsible for sales and marketing for U.S., Europe, Africa, and India. Welcome to this presentation. I hope you guys are ready. We'll be diving deep into India and the global sales market, and we'll be explaining how things are and what we see them in the future. Here we go. Now we start off with the first slide of ours. India, the role model for government ID development projects. Honestly, Aadhaar globally is always viewed as the most sophisticated ID program. It's considered the gold standard. Let me help you understand this region and this program a little bit better. Honestly, India is all about biometrics. We have about 1.4 billion people, and 100% of all the adults are already registered into Aadhaar. Biometrics is a part of life here.
It's used from anything to even a small transaction of buying a SIM card to a bigger transaction of buying or selling a house or a property for millions of dollars, right? So it's used across the segment. And more so, it's been used with a segment which we call the economically weak section, which is around about 400 million people. And they end up using a lot because a lot of government programs are dependent upon those things. The key benefit, obviously, which we have seen across, the government has been able to save a staggering $29 billion till 2022 by just spending barely $1.5 billion of investment, right? And before we go ahead, I will just narrate a story on my experience, actual personal experience of how biometrics for good can be used.
It's all this company, our partners, and investors like you who have actually brought this forward. The incident is of the biometric device which went for certification. Before you get your final certification, they actually invite you to a remote region where they will test the device in front of you and show how it works, right? Lo and behold, I went to a place in south of India. They invited us. The whole setup was already done. A very old couple from an economically weak section came in. They gave their biometrics. They put their fingerprint. There was an LED which lit up green. Their free ration or their subsidized ration was given to them. Both the husband and wife, they were overjoyous. They felt so surprised that they didn't have to pay anybody any money to get these free grains.
And honestly, till that date, I had never seen it in that sense. There was that this technology is actually doing good for the people. It is actually giving to those who need the most, right? And that has definitely been a cornerstone of me working here. And I feel that all of us are doing a great job in doing that. Earlier, there is a very infamous statistic in India that for every $100 spent, only 15 would make it to the end person who was in need. So it's not a 15% of loss, but it's a 15% of actual which was delivered. It's like 85% of loss right there. And with this whole mechanism in place, the government which had the money which wanted to give to the people, they were able to do it by using this mechanism. So it's a mechanism where everybody is enrolled.
Now, because everybody is enrolled, there's a lot of different kind of use cases which comes up. And the government is able to go and provide services to their citizens. Now, from whatever we are doing as of today, because the services are done so well, Aadhaar is doing so well, they want to increase it by almost 5x, right? So the transaction requirement is there. We are expecting as much as 20% of the market volume to increase. And another good thing about Aadhaar is that a lot of other countries, especially African nations and Southeast Asian nations, they look towards it and say, "You know what? This is where we want to end up at," right? And this is a program which is working for them, and we would love to use this. Which brings it now to me to the next slide right now.
The Indian biometric league. Again, where are we and what is set for us for 2024 and ahead? Like explained, Aadhaar is almost it was started in 2009, world's largest database. We did see a little bit slowdown from 2019 to 2023. That was mostly around COVID, and there were some political challenges that the whole system was going through. But that's not the case anymore, right? There is an incumbent initial L0 certified devices which were there. All 4.5-5 million of those devices are set to expire by June of this year, 2024. So a chunk of that will also get exchanged. And as explained, this government's ambition is to increase the AePS services, which is geared up towards financial payments, almost by 5x. Okay, going to the next slide. Where does that put NEXT Biometrics, right?
What are we doing, and how are we different from the others? It's very heartening to tell you, to all of us, that NEXT Biometrics is actually in a pole position. We did a few things right in the last year, and I think so we are reaping its dividends this year and going forward in the future. We have taken a slightly different approach than what we had earlier. We are now not going into Aadhaar for the L1 as an end-user company or an OEM, end-device company. We're actually going in as a fingerprint sensor company. How does that help us? That actually makes our key partners less scared of us. So this way, we are not cannibalizing the sector.
Earlier, when we were selling the sensor and providing the end device, which was a USB device, all the people in the ecosystem used to get worried and say, "Hey, these guys will be coming for my market share sooner or later." So what we have done is we've said, "All right, we're going to concentrate on something that we're good at. We are excellent at making the sensors. So we're going to make the world's best sensor. We're going to do great integrations." And then this way, we actually have access to a much larger audience or a much larger base. So that is one thing that we did. So we went from an OEM company to a sensor company. Second thing that we did, we also have positioned us as a more secure sensor company rather than a more economical one.
We played a lot around the security aspect of it. As you already know, thermal sensors, just by the way of physics and definitions, have better anti-spoofing capabilities. Or liveness check is already built in. When you compare it with other optical sensors which cannot catch the very obvious or basic spoofs, how does that help us? Well, all the financial or banking companies which are now coming on board, they obviously want to use a more secure sensor vis-à-vis a cheaper sensor, right? In their $800 device, they don't want to compromise over a couple of dollars, right? So we have seen a very strong pull from the fintech segment saying, "Okay, we want to work with guys which can give us a better and a more secure sensor." So that was the second thing that we did.
The third thing we did was we actually figured out which are the key partners, be it distributors or system integrators or value-added resellers, for different segments. So essentially, there are two to three major segments in this Aadhaar. One is your single fingerprint sensor. So we have tied up with ACPL there. And similarly, we have tied up with other players for POS and access control. And sooner or later, you'll hear about those also. Where are we right now? We've already received the first L1 certification from one of our OEMs, who happens to be one of the largest players in Aadhaar, right? And good news. Another good news is that we've got a couple of larger OEMs which have taken our sensors and gone for certification. We've also been able to secure more than NOK 300 million for the next two years.
This takes us to my next slide now. Really quickly, I wanted to touch upon the different target segments which exist for Aadhaar just to give you guys an idea. I try to take as authentic photographs as possible just to give you guys a little bit glimpse. So these are not from the stock market. But yeah. The first left-hand side top you see is the single fingerprint devices. These are these USB cable fingerprint devices which people use for smaller transactions, eKYC as they are called, anything from doing SIM verification. The reason why they do SIM verification is because every bank account is linked to a phone number. So if you were able to get a fake phone number, technically, you can get a fake bank account and do money laundering too. Curb that, they did biometric authentication for your phone numbers.
The one in the middle top is called the micro ATM or the POS terminal. That is where I actually saw that gentleman and lady getting their free rice, a bag of 5 kg rice at that point. So essentially, people queue up. They give their Aadhaar if they have and then they're able to buy subsidized, almost free grains from the government. The top right-hand side corner is an access control device. All the government agencies are mandated to use Aadhaar for their attendance, and they don't want to use something else. The bottom right is an ATM machine with an Aadhaar sensor. So the ATM machines in India are actually mandated to carry a fingerprint sensor from Aadhaar so that you are able to do Aadhaar verification and do financial transactions.
And left-hand side down is a tablet for child enrollment because essentially, children there is a concept that children probably cannot go to all the Aadhaar centers. So the government took the initiative of sending people in-house homes with these tablets. And so they would do Aadhaar verification of the kids. And the operator themselves would use their own biometrics to be authenticated. Now, why do POS or tablets use thermal sensors from NEXT? Because we've got excellent power consumption when it comes to POS terminals. So the number of transactions a person is able to do using a device which has fingerprint sensors from us is far more than an optical because optical sensors take more power. So it's a better solution. This takes me to my next slide. What is the India overview? Where are we, and what is the outlook for 2024? So 2023 highlights.
We've been able to secure large tenders and large orders of 300 million for the next two years. We've been able to partner with the right people. For example, ACPL, which has been able to secure an L1 certification. Aadhaar is already evolving from L0 to L1. The old is going out. The new is coming in. So that's creating a lot of pull in the market. And the same pull we have seen from large banks. Large banks have been placing orders and tenders onto our OEMs that we're working with. And we have been able to sign up with top OEMs of different verticals so that we are able to enter each one of them. So we'll have multiple L1 applications in the pipeline already. And what can we look forward? How does 2024 look like?
I think so, that's why all of us are here to just understand that aspect. So good news is we're going from one to three or even more OEMs. But I feel that we will have three OEMs by the end of this year who would have a certified L1 with them. This actually basically shows how good we are with different OEMs, right? Because it's very rare to see the same sensor being used with different OEMs because they want to essentially not do that. They lose their competitive edge. That's one thing. Second thing that we're seeing is that the largest banks in India is actually going to release its biometric tender. It can be almost like 20% of the whole market share this year which is going on that tender. So everybody's gearing up for that.
As explained earlier, the Aadhaar ecosystem is adding, I believe, almost 93,000 different banks, which would raise the total addressable market share by 20%, which is, again, good for us. We are expanding our market share. Another important point which completely resonates with our technology is anti-spoofing. More and more companies have started asking for anti-spoofing liveness detection. We fare considerably well when you compare us with the dominant fingerprint sensor which is there, which is an optical. So when you compare that with ours, ours looks new and swanky and more secure. So yeah. And keeping all of these things in mind, we are of a firm belief that we'll be able to target and achieve 30% in 2024. That brings us to the next slide. All right. Great.
I hope I was able to explain a lot around what's happening in India, how well we have executed our strategy for 2023, and what we're seeing in 2024. Similarly, we'll be going through now global demand and global markets. And going to my first slide here, across, we are trying to concentrate on these three different regions: the African continent, Europe, and the Americas. And in each one of them, I'll be going through what kind of market, the type of market that there is, the focus that we will be bringing into that market, and what channel or leverage that we'll be using. It's interesting to note, and again, it's good to see that the global market, biometric market, is actually on an upward trend. We are actually looking at a 14.5% annual growth, right? So the market is overall growing, but they are very different.
All of them are Africa, Europe, and Americas. India would be very different. I'm not saying that there are no similarities, but they are very different, and we have to approach them differently. Hence, we have got a different strategy for each one of them. NEXT is actually focusing on distributors to address all EMEA and Americas. Let me just take each one of them. Let's start with the Americas. The type of market that we're seeing there is a system integrator-driven market, which basically means the SIs are the big guys in it. They've got a couple of OEMs. They go in. They take bigger accounts. Then they place what they believe is a correct solution. We have to work with system integrators, hence work with the end user, which is also the OEMs in this.
Within this whole segment, what we have chosen is logistics and access control industries. That's what we are, that is, the two industries that we are targeting. How do we attack those? Through design houses or value-added resellers or system integrators. It's not kind of, we are picking the supply chain somewhere in the middle and saying, "Okay, design houses, we're going to be working with you because we see a big project with the system integrators." That's how we address the Americas market. Second is Europe. Europe actually is kind of like a replacement market that we see with the incumbent fatter, bigger, slower, more expensive sensors, which is kind of going through end-of-life. All of these guys are asking for replacement, and there are changes. Not so much new, but a lot of replacement market that we are seeing there.
That is one thing we see in Europe. The second thing we see is a lot of innovative, smaller companies which are coming out and saying, "Hey, I want to create something for, for example, hypothetically, for Bitcoin or a design which has not been used earlier." So we've been working with them as well. Our focus mainly in Europe, and what we have seen really working well for us is healthcare and logistics. So these are the two. Again, we are using the design houses and value-added resellers to enter these markets. Which brings us to my third market of attention is Africa's. Now, Africa, I'll spend a little bit more time. It actually looks towards India a lot. They're going through National ID projects, a lot of them. Different countries are in different phases. Most of them are in the enrollment phase.
Then the second part starts with the authenticating space. That's where we are. MOSIP is the body, just like how we have Aadhaar or, say, China has China ID. The African countries are tending towards MOSIP. MOSIP heavily relies on Aadhaar's ecosystem, right? They take a lot of, so the same players which are working in Aadhaar are actually working in MOSIP. What are the type of market? It's a MOSIP market. We are focusing mostly on national ID projects. Again, we leverage the value-added resellers and also the existing players in India which are also traveling there and selling there. It's kind of similar in that sense.
So it's one of my favorite sayings in NEXT Biometrics that I say that for every one minute of any $1 investment I do in India, I can find three coming back from Africa, from three different countries. So that way, we are lucky that we were able to crack into Aadhaar. And now we can replicate similarly in other places. Great. So that's all from my side. I hope I was able to address all these regions. And if you have any questions, please feel free to ask me. I'm more than happy to address them. Thank you so much.
Now we are available for the questions on India and the markets in Africa and Americas and Europe. Okay. We have some questions from the chat. Yeah. There's a question on how large is the Indian market in dollar terms for the coming years in terms of L1.
I can answer that, but I don't know if Ulf would want to take that. It's a fairly large market from L0 to L1. In dollar terms, because the only reason why we say this is because different agencies have pitched it differently, and they've got a different calculation around it. We have done similarly. That's a more company overview from NEXT. Maybe, Ulf, do you want to take this one?
Yeah. I think it's very hard to say because it depends on how you measure, right? I mean, if it's a we are acting in the sensor area. And I mean, completely L1 is including larger governmental projects. So it's kind of hard to get. I mean, as I said, as DJ said, there's a lot of different market analysts doing these estimations, but it's hard to get. Sorry.
Okay. Let's turn to the next question here then. For China, you mentioned you're taking value at the position in the value chain. Could you elaborate a bit more on what kind of role you expect NEXT to have in the value chain in India going forward?
No. That's a good one. See, I think so with last year's positioning that we did of taking a step back. Saying that we're going to be providing the sensor rather than the final OEM USB, it actually put us into a very good position. We're kind of neutral in the sense that we can work with a lot of players. What we want to come across is that the market thought leader in security. In the whole value chain, we look at ourselves as the market leader in security and providing that and bridging the gap between the government, the OEM, the banks, right? We're definitely going up in that sense in the value chain. Our positioning is more towards a whole sensor or secure solution providing with the sensor, not only the sensor and the algo, but also the know-how.
Because with this whole anti-spoofing coming in, and we are having a much better idea about how to solve these problems, so banks and the governments actually reach out to us saying that, "Okay. Tell us and explain us a better way of solving this problem." So how earlier we were just viewed as maybe a sensor company, and there are plenty. Now they invite us into smaller conversations, and we are able to explain to them how better to up the ecosystem's security, the whole security for the whole ecosystem. So I think so that's our role. We want to take that role, take that role, and we've got the expertise in it.
Okay. One more question now on the Americas. How far have you gotten in terms of implementing your market strategy in the Americas? And when do you think you will see some high revenue figures also from that market?
Serious, serious, serious, more serious. But Americas is a little bit different than I would say India and China, the globally rich places, mostly because of what is the incumbent service, right? I'm sure you guys already know. Every time you guys also must be traveling to the U.S., they're still signing things after they do credit card payments. So it's still some they have to go through a lot of process before they actually start implementing biometrics at the same space as China or India, right? A, that. B, there is an actual legislation issue around capturing the biometrics and using it by the government. They are far more their risk averseness towards the government having the biometrics is far higher. Hence, you don't actually see a National ID card project with biometrics rolling out in the United States, which is one of the major ones which gets captured.
Okay. That doesn't mean there aren't any other use cases. There are. They're in logistics, in healthcare. We are seeing a lot. We are seeing in Bitcoins and stuff. What I'm trying to say is that we are laying the foundation. We've been laying the foundation Q3 onward last year. I think so it'll take this year as well. And then you will start seeing these really unique cases which come out. And I think I've shared this with Ulf and Eirik also. Each one of those cases can be bigger than Aadhaar if you think about it because the potential is there. Because I've seen. I've worked there earlier. I've seen that if one of the ideas hits big, then it goes to all the Fortune 500 companies immediately.
The short answer, I think so, by this year's end, we should start seeing some good design wins which would help us ramp up mostly next year on next year Q2 onwards. That's my best estimate.
Okay. That concludes the Q&A for India and the other markets that you're responsible for. So now it's back to Ulf.
Thank you, guys.
Thank you, DJ. So yeah, before we wrap up, I think we have just a few minutes. So I think, yeah, you read the slides, and maybe there was a small typo on the Indian revenue, what we actually the contracts value we have. I mean, the NOK 300 million is over a certain time, right? I mean, the contracts are over years. It's not something that is delivering tomorrow, just to be super clear. We will correct that on the slides so it's more clear. Yes. So just some closing remarks. So I think I will yeah. I think we still have some time. But I think to summarize the Capital Markets Day, the takeaways, if you need to remember something out of this day, there's an enormous biometric market. Yes. We are extremely well-positioned with our disruptive technology and especially our FAP20 product.
We are now following up the turnaround phase, and we have entered the scale-up phase. We have now put the foundation, contracts in place, and moving on. And again, the design wins we have today and the contracts we have today will turn this company around. Not saying that the sales have stopped. We are continuing adding design wins every month. With that and with the fantastic, almost unheard-of gross margin, that's what you need to take away from today. So of course, we need to prove ourselves. Believe we have proved ourselves in the product segments we have gone through. We have the strong position we have, pole position in India, we hear DJ say. We have the financial margins, and we have the cost control. It's a base. Now it's time. Of course, we have not proven this. It grew in Q4? Yes.
But of course, we need to prove ourselves, and we will. This is my expectation. That's why I say Q2, we are break-even. So I think summarizing the outlook, it's similar to, of course, what we have in the Q4. But we expect strong growth in FAP20 revenue going forwards in the coming quarters, as you've heard. We have already secured contracts and design wins worth NOK 200 million. Now it's not something that starts January 1st. It's gradually starting to ramp up. Same as, I mean, the Asian distributor. It's a contract worth NOK 270 million. But that's not starting from day one. We see the first design now. And the distributor have six, seven different OEMs. So whenever they run out of the stock, they will replace to a next sensor. So it will gradually grow from this.
You need to understand the 200 is not something that is today. With the gross margin and OpEx said, this is the expectation of 2024. Again, I repeat, break-even Q2 2024 and positive result for 2024. Just final remarks. I think, yeah, you've all been waiting, and I appreciate that. It's been taking time. But I'm here standing confident that the market is taking off. I will not say I will repeat every quarter, but this is taking off finally. I've been here two years, and I see how we have built it up. Yes. With Marcus, we will add the FAP30. We'll be even better on the margin side. We have a question, maybe. You have a microphone.
Do I need that?
Yeah.
What's the cost of bringing FAP30 to the market, and when will it be market-ready?
It's actually already covered in the NOK 65 million per year. Yes. It's already covered in the OpEx. Yes. And we will see revenue out of the FAP30 at least in early 2025, I would say. It's a project that it's a continuation. We have already started it. It's on the map. And why I hesitate? It's because there's a fluctuation in the development. We need to make sure that the recipe of the outline of the FAP30 is correct. And you may need one try, two try, and God forbid, three. But most likely one. If we're lucky, it's earlier. Yeah. Yes. I will not repeat anymore. But if you want, of course, you can follow the progress. You can contact me, of course, Eirik and the others. But please subscribe and follow us on LinkedIn. And Euronext ticker is NEXT.
Do we have any final questions?
Any questions here in the audience?
Everything is crystal clear.
I have some more questions from the webcast. It's about the PC market. Do you see any developments there? Is it going to go bigger in the future?
In the high-end security market in laptops, yes, it's definitely something that we are targeting. We have two paying customers. Of course, I would like to have the third and the fourth in that segment. It's niche markets, but it's high-value markets. So definitely, we are targeting that market.
There is a question on the gross margin. What's the goal? I think we answered that. So that's 50% for 2024. On average, quarter-over-quarter will obviously fluctuate depending on the gross margin, but average 50%. And then for 2025, I don't know whether we want to provide any guidance. I guess not.
No, I think we have one bullet here. I think as we are actually changing the business model and maybe providing a biometric solution, of course, the average selling price will be higher. Therefore, the gross margin could be potentially higher. So yeah, be prepared for some surprises. But then, of course, it will fluctuate over the quarters. But again, 50% for the 2024 is the goal.
Thank you, Ulf. So that concludes the Q&A session. Thank you, everyone, for participating, and see you next quarter.
Thank you.