Fingerprint sensor prices have fallen below $5 recently, and are likely to drop further in 2016. The price drop is noticeable. You could normally get your hands on one for about $8 in early 2015.

The reason for the price drop has been an increase in the number of suppliers, which has dragged down the chip prices. Most of them are made in China and Taiwan.

Initially Chinese and Taiwan-based fingerprint sensor suppliers were far less competitive in terms of product quality and production yield than foreign outfits. But this year there have been considerable improvements in production yields and product features.

It is expected that this will result in a stronger global presence from now on. Movers and shakers include Egis which is supplying Samsung Electronics' mid-range smartphone series and Goodix Technology has grabbed new orders from China's brand-name handset vendors.

Fingerprint sensor prices will likely approach $3 in 2016 as the manufacturing cost for fingerprint sensors built using 8-inch, 0.18-micron process is less than US$2. This will make them almost compulsory on phones by next year.