Smart Card Authentication
A smart card is a small plastic card with an embedded integrated circuit chip. Many government agencies and large enterprises use smart cards, such as the US DoD Common Access Card (CAC), to increase the security of their systems and to comply with security regulations. A smart card is used in environments where each machine includes a smart card reader. Smart card hardware drivers that manage the smart card are typically preinstalled.
The VMware vSphere documentation contains guidance on configuring Smart Card Authentication in vSphere. Additionally, there is more guidance provided as a walkthrough with context and helpful information, below in the "Downloads" section.
As per the vSphere 7 Update 2 release notes:
Deprecation of SSPI, CAC and RSA: In a future major vSphere release, VMware plans to discontinue support for Windows Session Authentication (SSPI) used as part of the Enhanced Authentication Plug-in, Smart Card support, and RSA SecurID for vCenter Server. In place of SSPI, Smart Card, or RSA SecurID, users and administrators can configure and use Identity Federation with a supported Identity Provider to sign in to their vCenter Server system.
You can download the vSphere Smart Card Authentication Configuration Guides directly. Please select the one applicable to your vSphere version.