RFID tag market up for grabs

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16 June 2004 News

The RFID tag market based on electronic product code (EPC) shows potential for a dramatic revamp at the end of the year, according to the latest intelligence from ABI Research. Faced with meeting looming mandates from both commerce and government, the Hardware Action Group established by EPC global is trying to iron out differences in several proposals for a standardised Gen 2 UHF (868-956 MHz) EPC air-interface protocol, which determines how tags and readers communicate. The deadline for completing the standard is 4 October, 2004.

Proposals from three groups are under consideration. Each group includes different sets of IC and transponder manufacturers. The first, known as the Unified Group, consists of Philips, Texas Instruments and start-up Impinj. A second group, called the performance team, has EM Microelectronic Marin, Matrics, Atmel and a couple of smaller companies as its members. The final contender, the Q Proposal, is championed by Alien Technology.

Although all the proposals, based around ISO 18000-6A, are broadly similar in technical terms, ABI says there are enough differences to redraw the map of the RFID supply chain depending upon which one prevails. This has less to do with technology than with timing.

Matrics, with its UHF Class 0 chips and Alien Technologies with Class 1 chips, have been market leaders so far; all the tests being done to this point have used tags from one or the other. But according to ABI principal analyst Erik Michielsen, "Once the protocol is ratified, those chips will be phased out and replaced with Gen 2 chips. So all the advantages those companies have will become decreasingly significant by the end of this year."

With the playing field suddenly levelled, the first player to market in quantity will seize the high ground. Michielsen says that the backers of the winning proposal will be in an enviable position, as they will be able to set up their design and fabrication capabilities more quickly than the others.

"If TI and Philips win," he says, "they will have their designs and will be ready to have their fabs built, and they can immediately start producing hundreds of millions of these chips." The backers of the losing standards may suffer delays of a month or two, especially if they outsource their fabrication. Even such a short time lag could be critical in this market.

www.abiresearch.com

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RFID tag market up for grabs

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