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Alliances Underpin RFID Supply Chain

With 2005 and 2006 order books for EPC Gen 2 products filling up, vendors throughout the RFID supply chains are working together to ensure the reliability of high-volume supplies. This guest article from ABI Research's Erik Michielsen asserts that such collaboration is key to the greater industry's success.
Sep 29, 2005This article was originally published by RFID Update.

September 29, 2005—With 2005 and 2006 order books for EPC Gen 2 products filling up, IC, inlay and label vendors throughout the concentric RFID supply chains are working to ensure the reliability of high-volume supplies. This effort begins with the silicon and involves multiple corporate relationships and supply arrangements.

At the silicon level, Impinj, Philips, ST Microelectronics and Texas Instruments (TI) have been racing to release the first volume-ready Gen 2 chips. The race becomes more interesting, as each company is inclined to offer proven solutions first while knowing that there is little value in single-source EPC Gen 2 availability. Customers -- here the inlay and strap makers -- want multi-sourced supply options to guarantee that their customers, the label converters, enjoy redundant supply resources that are failsafe in high-volume environments.

One consistent characteristic of all the IC providers is a sharp focus on developing reliable and multi-faceted partner networks. IC producers are taking multiple routes to ensure Gen 2 stability in a multiple-sourced world, with Impinj, Philips, and TI cooperating on roadmap planning and interoperability initiatives. Philips and TI referenced previous co-planning by referring to ISO 15693. They co-drove ISO 15693 standardization and made it a priority to get chip compliance to ensure multi-source supply. The two companies teamed up and put compliant ICs on the market with 13.56 MHz (high frequency) RFID, and worked together, with input from Impinj, to do the same for UHF. Over the summer, the companies have distributed emulators and silicon to clients and are cooperatively testing to ensure that IC providers have high quality, interoperable Gen 2 products.

IP licensing, always one of the most contentious RFID issues, continues to influence vendor strategies. EM Marin and Texas Instruments have decided to sign the Intermec Rapid Start Licensing Program while others, including Impinj, Philips and ST Micro, have refrained from joining for the time being. Whether IC makers will participate in the consortium patent pool effort launched in early August 2005 remains to be seen, but all clearly acknowledge that the EPC Gen 2 race is not going to be about "going it alone."

Impinj has working inlay and strap relationships with Alien Technology, Avery Dennison, IER, KSW Microtec, Precisia, RF Identics, RSI ID and UPM Rafsec. Philips is working with label partners to optimize chip antennae designs and with reader manufacturers such as Symbol to address reader-antenna interoperability. TI, with its ICs, inlays, and straps, is working with an extensive network of reader and printer manufacturers, as well as more than 30 label converters.

At ABI Research, we feel that such collaborations are vital to RFID's success, and that initial industry efforts such as the Intermec Rapid Start Licensing Program and the RFID patent pool consortium are steps in the right direction. Each stakeholder in the tag value chain is co-dependent on other chain members, and the more effort companies put into realizing this view the more success they will have in securing recurring EPC Gen 2 business.
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