The 5c RFD tag coming soon

by Nigel Lewis on 2010-07-04

The laws of physics and of economics don’t change. But the utility and cost of RFID sure do – and for the better!

RFID, radio frequency identification, is the coming technology for item tracking and tracing, and for huge advances in supply chain management. But coming when?

Over the years, RFID has been dogged by questions over its technical viability in cluttered or harsh environments, and over the cost of the microchip-bearing tags at the heart of any application.

Developing this technology has, to some extent, been a struggle against those laws of physics which constrain the behavior of radio waves in and around water and metal. And developing its economic value has largely been a struggle for the production and supply of cheaper tags, especially tags for use in the broadest (and potentially most useful) applications of RFID at the mass market level.

While RFID is being used today by some of the world’s biggest retailers – Wal*Mart is the leader – and logistics organisations, it has yet to reach a tipping point of mass acceptance and accelerating take-up for the vast array of applications that are the ultimate promise of this technology.
But that tipping point may actually be near at hand, when we consider the positive changes now coming through in tag design and pricing.
Here are just two recently-reported technical developments. First, international tag manufacturer, Omni-ID has unveiled a tag that receives and transmits radio waves under water and in close proximity to metal. This passive UHF tag – it transmits at ultra high frequency when activated by signals from an RFID reader – has what Omni-ID calls a “plasmonic structure”. The design involves intricate layering of folded metal which means the tag will comply with the laws of physics and function with a high degree of reliability under extraordinary circumstances.

Omni-ID already has a solid track record in RFID tag development, having brought to market the Prox tag which is increasingly used in the United States for the tracking of small high-value assets that include electronic devices, network cards and servers.

The second development has given the RFID world a range of thin isolator materials that enable tags to work when attached to, or placed near, metal objects. That was previously a very doubtful proposition unless space was created between the tag and nearby metal surfaces (frequently at extra cost and inconvenience). Now, US company, Emerson & Cuming Microwave Products says its ECCOPAD® isolators enable UHF and HF tags to be directly attached without the detuning effect of metal on their antennae. The company has a new read-on-metal tag now on the market.

These developments break through what were previously seen as physics-imposed limits on the working of RFID in the tracking of many types of items, and in many industrial and infrastructural settings. And the development work by these two firms and others will not stop there!
Changes occurring in RFID economics are just as dramatic. It has been a consensus view in the RFID world that the technology won’t really achieve mass take-up until the price of tags falls to near US 5 cents. Back five years ago – when the average US price for passive UHF tags was 57c – an authoritative forecasting group said prices would be down to 16c in 2008 and take some years thereafter to reach the target 5c level.

Well, guess what? A well-established Chinese tag maker recently hit the US market with a tag priced at 5.8c (admittedly for large orders of five million or more). To get really technical, it is a UHF EPC Gen 2 inlay tag that uses NXP Semiconductor’s Ucode G2XL chip. An ‘inlay’ is an RFID microchip and antenna mounted on a card, with these components then easily extracted and sealed into a label (one form of RFID tag) as required by a product manufacturer or distributor. The RFID Journal reports that Invengo Technology seems ready to lead prices even further down with the production of such inlays in huge volume at its plant in Shenzen, southern China.

Tag prices are the lynchpin to RFID economics. The business case for investing in the technology is typically dependent on the tags – the lower their price, the more favorable RoI tends to become on the particular RFID proposal. This is particularly so where the use of millions (or billions) of tags is contemplated on high-value retailed items like pharmaceuticals or consumer electronics.

A bit more positive change may be required yet in both technical and cost terms, but the tipping point for RFID is definitely approaching – and quicker than some pundits previously expected. For those of us who are really interested, it is now very much a matter of ‘watch this space’ from companies like Invengo, Emerson and Cuming, and Omni-ID.

Gary Hartley - GS1
www.gs1nz.org