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Gen2 RFID Chips from STMicro Hit Market

STMicroelectronics, the $9.5 billion semiconductor manufacturer, has very recently entered the market with Gen2 RFID chips that will compete against similar offerings from Impinj and, as of this week, Texas Instruments. RFID Update spoke with Francis Dell'ova, ST's RFID Business Unit Manager, about the new chips.
Aug 04, 2006This article was originally published by RFID Update.

August 4, 2006—STMicroelectronics, the $9.5 billion semiconductor manufacturer, has very recently entered the market with Gen2 RFID chips that will compete against similar offerings from Impinj and, as of this week, Texas Instruments. RFID Update spoke with Francis Dell'ova, ST's RFID Business Unit Manager, about the new chips.

Called XRAG2, the EPCglobal Gen2-certified silicon includes 128 bits of user memory and supports the optional block erase and block write Gen2 commands. It is offered to inlay manufacturers in both processed and raw wafer form factors. Additionally, the chip supports more than 10,000 write/erase cycles and has very high data retention capabilities, meaning it can store information for up to 40 years.

The XRAG2 is based on 160 nanometer technology. In contrast, Texas Instruments' Gen2 silicon uses 130 nanometer technology, which TI has touted as offering better performance. ST chose 160 nanometers because it is manufactured more affordably, which results in a lower price for inlay providers and, ultimately, end users. According to the company, 130 nanometer silicon requires more expensive processing, and the resulting benefits may not be worth the additional cost in the high-volume world of Gen2 supply chain and retail applications. "We did this choice of 160 because it was the right choice between cost and performance," said ST's Dell'ova.

ST's Gen2 chip pricing will be at the low end of the market. Dell'ova stated that the XRAG2 will not cost more than the company's earlier Gen1 chip, even though Gen2 is a vastly enhanced technology. "We are not afraid of competing with anyone on the market based on price."

Dell'ova cited ST's Gen1 experience as the reason the company is now so adept at offering a "high volume, high yield, low cost" RFID chip solution. In fact, the company was the industry's sole supplier of Class 1 Gen1 silicon in 2005, selling 400 million units. "We have sold 400 million units of Gen1 product, which is solid experience on UHF chips," he said, touting that experience as a key competitive differentiator for the company. "We know how to ship very high volume and low cost RFID products."

The Gen2 chips have been in production for a couple months. The company has purchase orders from major inlay manufacturers, and volume deliveries started a few weeks ago. Dell'ova said they expect to ship between 10 and 20 million units this quarter, ramping up to larger volumes in the fourth quarter. Gen2 RFID tags with the XRAG2 will probably be in deployment within the next four weeks.

After a year-long reign by Impinj as the sole supplier of Gen2 chips, this week has seen the market fill out. On Monday, Texas Instruments announced the release and volume availability of its new Gen2 silicon product (see Texas Instruments Announces Gen2 RFID Chips). And while there has been no follow-up announcement from Philips Semiconductors since receiving Gen2 certification late last year for its UCODE chip, inlay manufacturer RF IDentics is taking orders for UCODE-powered inlays, with delivery possible toward the end of this quarter.

The general consensus is that the entrance of multiple Gen2 chip vendors will help instill end-user confidence in the maturity of Gen2 RFID technology. Reik Read, analyst with Robert W. Baird & Co., told RFID Update, "End users like to see more choices within any industry, so the fact that you'll have more guys in the [Gen2 silicon] marketplace will make end users more comfortable."
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