RFID is a powerful enabling technology with ever-expanding application. However, the largest potential applications of RFID, such as consumer packaged goods, postal items, drugs and books, can only be fully addressed if tag prices drop to less than 1¢, including fitting them in place. These applications offer potential sales of ten trillion tags per year, but silicon chips will always represent a small proportion of such tags due to cost. Even without the expense of a silicon chip, a fitted cost means that, like 95% of barcodes today, the majority of highest volume RFID tags must be applied directly to products and packaging to achieve a fitted cost of well under one cent. A new report based on new research by IDTechEx analyses the situation. Chipless RFID Forecasts, Technologies & Players 2006-2016 is the only report to assess all the technologies, barriers, players and forecasts for chipless RFID.
What is Chipless RFID?RFID tags that do not contain a silicon chip are called chipless tags. The primary potential benefit of the most promising chipless tags is that they could eventually be printed directly on products and packaging for 1¢, thus replacing ten trillion barcodes per year with something far more versatile and reliable.
The mainstream types of chipless tags are digitally encoded and work at a range of more than one-millimeter, like silicon chips. Their potential markets go beyond the lowest cost/highest volume potential markets because they have other benefits beyond cost. Today they are sometimes sold for a higher price than silicon chip tags, and at a lower price at other times; this will continue to be the case. Unique signature and analog artifacts, such as the magnetically encoded stripe in a banknote or microwave-reflecting fibers in security paper, can be sensed at one millimeter away and therefore fit into our definition of RFID, but they have little application beyond anti-counterfeiting. Therefore, we discuss them only briefly in this report and omit them from our statistics.
The next 10 years will see chipless tags gain market share rapidly. The numbers sold globally will rise from 5 million (0.4%) in 2006 to 267 billion (45%) in 2016. By value, chipless versions will rise from $1.2 million (0.1%) in 2006 to $1.39 billion - a more modest 13% of all income from RFID tags in 2016, because most of the increase in penetration will be due to price advantage. Including infrastructure, software and services, this represents a $2.8 billion market for chipless RFID systems in 2016. Thereafter, chipless tags will rapidly come to dominate the RFID market, though the most technically capable chips - such as financial cards containing microprocessors, 5.8 GHz tags for non-stop road tolling or ultra wide band tags for real time location systems - will continue to be made using silicon chips.
Many Chipless Technologies but Few WinnersThe first generation of chipless technologies did not meet open standards for use by many service providers, and no attempt was made to write such standards for them. Many chipless technologies were offered, including acoustomagnetic, swept RF inductor capacitor arrays and electromagnetic RF sputtered film - each a multi-bit version of one of the three types of anti-theft tag in common use. Others have come in the form of diode arrays, surface acoustic wave (SAW) devices and chemicals that emit high frequencies when moved. However, only acoustomagnetic tags for error prevention in healthcare and SAW tags for non-stop road tolling and manufacturing have achieved sales above one million tags. AstraZeneca’s acoustomagnetic tags sell to the tune of 4.5 million every year. However, this design is difficult to cost-reduce further, and it has performance limitations such as rigidity. The main characteristic of most of the first generation chipless technologies was that they were pursued by small, undercapitalized companies whose technical limitations were troublesome in the marketplace.
Second-Generation Chipless TagsIn contrast to first-generation chipless tags, SAW tags can be improved technically and cost-reduced a great deal. They also store plenty of data and operate at a popular frequency used by conventional chip RFID. This means they can be the basis of large closed and open systems. Indeed, initial work has been done by EPCglobal to incorporate SAW capability in the standards it develops within ISO.
Two other technologies are also very promising. New participants have created electromagnetic tags based on nothing more than printed stripes of conductive ink on paper or low cost plastic film. In addition, about 40 companies are working on thin film transistor circuits (TFTCs) - most of them capable of being printed at high speed on low-cost plastic film. TFTCs can have the same electronic circuit as that in the silicon RFID chip, so, subject to limitations of the materials used, they can use the same frequencies and standards as chip-based RFID. The ability to operate at 13.56MHz is extremely important, as 55% of tags ever made have operated at this frequency and the figure will be over 70% in 2016. It is the preferred frequency for cards, tickets, library, laundry, pharmaceutical and postal items.
The main business characteristics of second-generation chipless technologies are that they are being backed by some of the world’s largest companies and some well-capitalized small ones. Many of them are in a position to be both sellers and users, including IBM, Hewlett Packard, Xerox, 3M, Toshiba, Dai Nippon Printing, Toppan Printing, and Samsung. Packaging and paper giants such as Mreal, MeadWestvaco and International Paper are also involved.
Best for Specific ApplicationsThe most promising chipless technologies will be geared toward certain applications. Even then, they are not suitable for many opportunities within these sectors, and in some - such as air baggage and animals - the standards are already against them. The best sectors for chipless are nevertheless items (books at manufacture, library, laundry, pharmaceutical, consumer goods, archives, postal); smart tickets/banknotes/ other high-volume secure documents; air baggage; animals; and people, such as prisoners, parolees, invalids, and visitors to leisure facilities.
For more information, contact Corinne Jennings at email@example.com; call + 44 (0)1223 813703; or visit www.idtechex.com.
SIDEBAR: RFID Events
- September 20-21: Active RFID Summit Europe and RFID Smart Labels Europe, London; www.smartlabelseurope.com
- November 14-15: Active RFID Summit USA, Atlanta; www.activerfidsummit.com
- December 6-9: Printed Electronics USA, Phoenix; www.printelec.com