Since June 23, 2003, the Immigration Department has introduced a new generation of identity cards for Hong Kong residents. The new identity card takes the form of a smart card and employs state-of-the-art technologies to make it more secure and fraud-resistant. While the personal particulars of the cardholder are engraved by laser on the card surface, the templates of the holder's two thumbprints and facial image are stored in the chip and protected by sophisticated cryptographic techniques. The smart identity cards enable the Immigration Department to use the fingerprint identification technology to quickly authenticate the cardholders' identity and enable the cardholders to enjoy the convenience of the Automated Passenger Clearance (APC) System and the Automated Vehicle Clearance System. On December 16, 2004, three APC channels (e-Channels) began to operate at the Lo Wu Control Point, which enabled permanent residents aged 11 or above who are holders of a smart identity card to enjoy automated immigration clearance.

The territory-wide replacement exercise has been making good progress since it was launched on August 18, 2003. People born in 1954 to 1969 have been arranged to apply for new identity cards within specified periods at any one of the nine Smart Identity Card Centres. From September 27, 2004 onwards, cross-boundary drivers could also apply for new identity cards before or within the periods specified for their age groups. This arrangement will enable them to enjoy the convenience of the Automated Vehicle Clearance System, which will be introduced at the vehicular control points in phases in the first half of 2005.

Taking into account the experience gained so far under the territory-wide replacement exercise and the actual turnout rates, the Immigration Department has advanced the completion date of the exercise by three months to March 2007.

As at the end of 2004, a cumulative total of 1 842 742 smart identity cards were issued under the replacement exercise.