Failure of the chip was certainly a concern of the ICAO New Technologies Working Group. The International Civil Aviation Organization is an organization of the United Nations which contributes to the regulation of international civil aviation. Most countries advise their citizens to care for their e-passports, not to unduly bend, twist, or puncture them. There was a question of the warranty that chip companies would give on their chips, given that there had been no experience of chips in passports before. The preliminary evidence is that the chips are reliable. Some countries have reported that after 3 or 4 years they have had no failures of chips, or minimal failures, in hundreds of thousands of issued e-passports. There is good reason therefore to believe that the chips will last for the 5 or 10 year life of the e-passport.
See also the Biometric Passport Tutorial.
Courtesy the Keesing Journal, 20090