|Home||Internet of Things||Aerospace||Apparel||Energy||Defense||Health Care||Logistics||Manufacturing||Retail|
RFID Hardware Supply Struggles to Meet Demand
Shortages in RFID components and silicon are increasing order times for RFID readers, printers and tags by up to 14 weeks.
Aug 26, 2010—Due to an increase in RFID deployments across numerous sectors, following a recession that forced many reader, component and chip manufacturers to reduce production in 2009, integrators and end users are now finding readers, printers and tags harder to come by. In fact, interrogators that typically took four to five weeks to obtain in the past now require twice that amount of time—or as much as 14 weeks after being ordered.
Those numbers can be expected to get worse before they get better, according to Bret Kinsella, who oversees operations, marketing and sales at ODIN, who recently blogged about the issue (see Is there a looming RFID Reader Shortage?). The growing demand, he says, has meant that many RFID hardware manufacturers are ramping up production, but the back orders for readers, printers and tags will require another several quarters before the order time for hardware requested by systems integrators and end users is likely to begin returning to the levels of 2009 and earlier.
Wal-Mart's effort to begin tagging its apparel, beginning with men's jeans and undergarments (see Wal-Mart Relaunches EPC RFID Effort, Starting With Men's Jeans and Basics).
An even bigger driver behind the increase in orders for RFID hardware, however, has been the multitude of smaller, unannounced deployments that have added up to the largest demand to date for RFID tags and hardware. "There's a broader market adoption that isn't being reported," Kinsella explains, "because, though they spend only a couple million dollars each, they have a combined impact." He cites the military, retail, aerospace and health-care industries as the largest adopters in recent months to put pressure on RFID manufacturers.
One source of the problem, Kinsella notes, is a shortage of components. During the recession, component manufacturers hoarded materials or exhausted existing inventory in order to keep costs down, or opted not to increase their production capacity. Consequently, these companies are currently unable to keep up with the demand. The result is that many RFID hardware manufacturers are now stymied by a lack of components required to make handheld or fixed readers, as well as RFID printers and encoders. In other cases, those components are available, but the sheer number of orders placed in the middle of 2010, following the previous year's slowdown, has forced RFID hardware manufacturers to go into catch-up mode.
"RFID demand has definitely risen dramatically this year," says Scot Stelter, the senior director of product marketing at RFID technology manufacturer Impinj. "We see higher use in specific applications, like apparel inventory tracking, as well as a growing list of new applications coming online." Stelter says his company will provide substantially more RFID chips to customers this year than it did in 2009, adding that "sales for all of our RFID product families are up."
The uptick in RFID adoption, Stelter points out, is occurring at a time when the semiconductor industry, in general, is experiencing the strongest demand in its history. "We anticipated this early on, and have worked hard to minimize the impact on our customers," he states. "On the tag chip side of our business, we have seen increased lead times from our suppliers, but as a well-respected customer, we have been able to negotiate better terms." Impinj has been working closely with foundries, he says, to ensure the greatest possible supply of RFID chips for tags.
Login and post your comment!
Not a member?
Signup for an account now to access all of the features of RFIDJournal.com!
SEND IT YOUR WAY
RFID JOURNAL EVENTS
ASK THE EXPERTS
Simply enter a question for our experts.
TAKE THE POLL