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RFID Tag Market Up for Grabs
May 21, 2004
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The Electronic Product Code (EPC)-based RFID tag market shows potential for a dramatic revamp over the late-2004/early-2005 period, according to ABI Research (Oyster Bay, NY, U.S.).

Faced with meeting looming mandates from both commerce and government, the Hardware Action Group established by EPCglobal is trying to iron out differences in several proposals for a standardized Gen 2 UHF (868-956 MHz) EPC air-interface protocol, which determines how tags and readers communicate. The deadline for completing the standard is Oct. 4, 2004.

Proposals from three groups are under consideration, and ABI says each group includes different sets of integrated circuit and transponder manufacturers. The first, known as the Unified Group, consists of Philips, Texas Instruments, and startup 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, there are enough differences to redraw the map of the RFID supply chain, depending upon which one prevails. This, ABI says, 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, reports ABI. All the tests being done to this point have used tags from one or the other.

However, according to ABI Research 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 leveled, the first player to market in quantity will seize the high ground. Mr. 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'll 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. According to ABI, even such a short time lag could be critical in this market.

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