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Alien Ponders Second RFID Plant

Alien Technology, a startup making low-cost RFID tags, is considering building a second production facility in North Dakota.
Feb 17, 2003Feb. 18, 2003 - North Dakota isn't the first place that comes to mind when you think of high-tech manufacturing. But Alien Technology, a Morgan Hill, Calif.-based startup, is considering building a facility in the state to produce low-cost radio frequency identification tags.

"There's a research park at North Dakota State University that would be an attractive site," says Tom Pounds, Alien's VP of RFID products. "We're in the early days of discussing how [construction of a factory] might get funded and supported."
Sen. Dorgan

Alien is still in the early phases of ramping up production at its Morgan Hill facility, which has some 50,000 square feet of factory space. But Pounds says the high cost of labor in Silicon Valley makes it an unattractive place to run a high-volume manufacturing operation.

Pounds says Alien plans to get produce large numbers of "straps" -- microchips in a strip that can be connected to antennas -- at the Morgan Hill facility. But it will add capacity at a second site in two years or so. North Dakota is attractive because it has a highly skilled workforce, and labor costs are significantly lower than in Silicon Valley.

Alien has been collaborating with the university's Center for Nanoscale Science and Engineering on research for the United States military into smart sensors that could detect, for example, the presence of biological weapons and report their location remotely. Senator Byron Dorgan helped get funds appropriated for the project and is keen to lure Alien to the area.

"I've been talking with the CEO and the chairman of Alien Technology about the advantages of locating this manufacturing plant near the research they are doing at NDSU," Dorgan said in a press release issued by his office. The release said the Alien plant could begin operating as early as 2005 with up to 150 employees and that it could eventually employ more than 1,000 people.

State and university officials envision an Alien production facility attracting entrepreneurial companies involved in the creation of sensory systems and related technologies.

So far, Alien has received only one major order, 500 million tags from The Gillette Co. But Pounds says the company must begin planning now to meet the demand that is expected in 2005. Alien has also been seeking additional funding. Pounds says that process is going well, but said he could not reveal any information at this time.

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