Alien Extends Gen 2 Product Line, Expands Manufacturing

By Mary Catherine O'Connor

Oct. 10, 2006—It was a cruel summer for Alien Technology. The Morgan Hill, Calif., manufacturer of RFID tags and interrogators delayed—and then cancelled—its bid for an initial public offering. It also took cost-cutting measures, including layoffs (see Alien Cancels IPO Plans).

Monday, however, the company reported good news: the opening of a new factory that it says will boost its manufacturing capabilities. In addition, Alien debuted new Gen 2 inlay designs and revealed contracts with label converters, and it also announced something it believes will put the firm in a position to improve its balance sheet and establish better financial footing: its own Gen 2 silicon.

Industry executives attending a ribbon-cutting ceremony at Alien's Fargo facility. Front row, right to left: Keith McDonald, SVP, Alien; US Representative Earl Pomeroy; Stav Prodromou, Exec. Advisor, Alien; Robert Eulau, EVP, CFO, Acting CEO, Alien; US Senator Byron Dorgan; Glenn Gengel, VP Operations, GM Fargo Facility, Alien; Dr. Philip Boudjouk, VP Research & Technology Transfer, NDSU; NDSU President Joseph Chapman; ND Governor John Hoeven; Tony Grindberg, VP, NDSU Research Park

Since last fall, Alien has been buying Monza UHF EPC Gen 2 chips from Impinj for its Gen 2 inlays. Yesterday, the company announced that it is now also using chips fabricated at its facility in Fargo, N.D. By March of next year, Alien plans to use its own chips exclusively. This, says Bob Eulau, acting CEO, executive VP and CFO, will "cut our costs by more than in half," compared with sourcing the chips from a third party. In mid-September, Eulau replaced Stav Prodromou, Alien's CEO of four years, who stepped down to become the company’s executive advisor on business development and government affairs.

Journalists and analysts touring Alien's new 48,000-square-foot manufacturing facility in Fargo on Monday saw a demonstration of the new Alien Gen 2 chip, which EPCglobal has already awarded its Gen 2 conformance certificate. During that demonstration, an M-tag, Alien inlay made with the chip, was read from 110 feet, three times the distance specified in the Gen 2 protocol. The system then read the tag from a distance of 3 feet, while it was inside a water bottle.

The M-tag features a large antenna and is designed for application to pallets and cases of products containing liquid or other RF-unfriendly materials. A large antenna boosts a tag's read distance. But Alien CTO Steve Smith explains that the Alien chip is also more power-efficient than other Gen 2 chips on the market, and that improved ability to convert the RF signal it receives into an electric current also contributes to the demonstrated M-tag's long read range (Gen 2 tags generally have only a 30-foot read range).

While end users in the supply chain may be impressed to see a fully passive tag read from a distance of more than 100 feet, they care more about the readability of tags affixed to cases stacked onto a pallet. Still, Smith predicts, tags made with the new Alien chip will "lead the pack" in terms of readability.

In July, Texas Instruments (TI) announced it was set to release its Gen 2 chip. This chip, the company claimed, offered increased power efficiency over existing chips on the market (see Texas Instruments Rolling Out Its Gen 2 Chips).