Radio frequency identification (RFID) technology -- a way of identifying and tracking things such as store inventories -- could expand considerably in the near future as costs fall, an industry veteran said yesterday.
"We predict that the cost of RFID tags could be reduced to US$0.05 from around US$0.20 currently in the next one or two years," Alan Chang (
At that time, the technology could be prevalent among consumers, perhaps with each item in supermarkets embedded with RFID tags, Chang said.
Sun Microsystems yesterday donated NT$30 million worth of RFID/Auto ID software along with technical support services to the Industrial Technology Research Institute (ITRI).
RFID technology is now applied to back-end activities like tracking shipments, logistics, manufacturing and inventory management.
The technology allows tiny chips (tags) to communicate with detectors wirelessly and transmit information from a unique serial number to complex product details, enabling retailers to monitor their stock and even consumers' shopping habits.
A demand by Wal-Mart that its top 100 suppliers adopt the technology by January next year has boosted the RFID-related industry.
Another industry insider, however, was not so bullish about the future of the technology.
"The estimate that the tag cost will drop to US$0.05 in the near future is a bit too aggressive," said David Wang (
The estimated price may not be enough to cover the cost of parts like semiconductors and the packaging and testing expenses, Wang said.
One of his concerns is that while the tags can be used on products that are worth a lot or can be easily stolen, such as notebooks, they might be more difficult to apply to cheap goods like bottled water.
"RFID tags would not be able to replace the current barcode system in terms of cost in the next seven to 10 years," he said.
The global RFID tag and reader market is estimated to be worth US$4 billion this year, and is expected to grow to US$7 billion in 2006, according to New York-based consulting firm Frost and Sullivan.
The semi-official ITRI, which developed an RFID chip in March, yesterday inaugurated the nation's first RFID integration and testing center, which will cost up to NT$80 million over the next few years, with the aim of establishing RFID testing standards and structure for local industries.
RSS