ABI: Manufacturing Innovation, Evolution Essential for Passive RFID Label Market

October 30, 2007 // Published as a news service by IHS

Over the last few years, major integrated circuit (IC) and inlay players have dedicated new lines - or reallocated existing lines - to support an increase in passive UHF label demand.

Analysts said the RFID passive-label manufacturing value chain is complex, involves a multitude of players and will require continued component and material innovation, as well as an evolution of manufacturing processes, to better instigate market growth.

"The UHF band is superior for supply chain management [SCM], asset tracking and numerous others applications," said Michael Laird, ABI Research RFID director.

"UHF offers a larger read range, a higher data transfer rate and operates at higher speeds - and it represents one of the fastest growing segments in the industry."

Analysts said there is a large market, with respect to bar code label converters, throughout the world. Much work has occurred on the IC end as far as standards, along with a strong effort to make them less expensive and smaller to fit into different tag sizes and dimensions. There is also a focus on data security to ensure interoperability with standards that have been ratified.

"Using different components and materials will help lower costs, but if manufacturers don't dedicate lines to RFID and overhaul their existing processes to adopt newer technologies and production methods, it will become increasingly challenging to meet the price threshold end-users are willing to pay for RFID labels regarded as high volume, truly 'killer' applications," Laird said.

It is not so much the technology getting up to speed, analysts said, as far as the components that go into the label; it is really about what needs to happen with the manufacturing of these labels.

Source: ABI Research.