Despite Sluggish Growth, Taiwan’s RFID Industry Remains Committed

By Mary Catherine O'Connor

The nation's RFID sector is churning out new products and applications, with an emphasis on EPC Gen 2 technology.

Taiwanese businesses have a long history of producing low- and high-frequency (LF and HF) RFID hardware for such applications as access control and time and attendance tracking in the workplace. But in recent years, these companies have also begun developing products and solutions based on ultrahigh-frequency (UHF) technology, and many are working hard to become important players regarding new RFID solutions and deployments based on the EPC Gen 2 protocol for passive UHF hardware.

Such is the case at the Industrial Technology Research Institute (ITRI), a research and development organization underwritten by Taiwan's government, as well as by industry sponsors. ITRI is one of the largest research institutions in the world, with nearly 6,000 employees—of whom more than 1,100 have Ph.D. degrees. In addition to helping launch a number of companies in the RFID industry, the institute has developed numerous prototypical RFID solutions that it is now looking to help bring to market.

Staff members at the Industrial Technology Research Institute demonstrate how passive RFID tags embedded in circuit boards could be used to track the manufacturing of room dehumidifiers.

During a recent tour by RFID Journal of several Taiwanese RFID and electronics firms, ITRI's staff demonstrated a number of these designs, including a building security system that combines RFID personnel badges with facial recognition software. The solution provides a means for security staff members to authenticate the identity of an individual presenting his or her ID badge to an RFID reader at a facility entrance. When the badge-holder later presents the card to a reader at the security gate, software calls up that person's facial image on file (acquired when he or she was first issued the card), and compares it with a live image of that employee, taken by a biometric camera at the gate. If the images match, then the person is allowed entry; if not, entry is denied.

While this system is still in development at ITRI, it is similar to solutions manufactured by video surveillance systems firm ComCam and RFID systems integrator AAID Security Solutions (see Video Puts Faces to Names, Heightens RFID Visibility), as well as one by American Barcode and RFID (see New Approach to RFID-Powered Building Security).

But a more novel application that ITRI has designed would enable electronics manufacturers to track their manufacturing process in order to ensure greater accuracy and control over their products throughout their entire lifecycles. In the example deployment shown at ITRI's lab, an EPC Gen 2 passive UHF RFID tag is added to a printed circuit board inside a room dehumidifier (poorly manufactured dehumidifiers have caused electrical fires in consumer homes, and are thus ripe for manufacturing control improvements). As the unit moves through the manufacturing process, RFID readers, mounted to the robotic arms used throughout the line, would collect the circuit board's tag ID number, as well as the IDs encoded to tags attached to other components affixed to the product as it moves down the line. Software is then used to ensure that the proper parts are added in the correct order, and that the devices are assembled per strict specifications. This helps to ensure that the product will operate not only properly, but safely.

The RFID tags would later be useful for tracking product returns and repairs, as well as for automating the demanufacturing process at the end of a product's useful life, when its components are pulled apart for recycling. In addition, the tags could be used to help product makers track carbon emissions related to their manufacturing processes, by associating that information with each item they produce. ITRI is currently seeking commercial partners to bring this manufacturing tracking application to market.

Taiwan's RFID industry grew sharply between 2006 and 2007—jumping 62 percent in sales of hardware, software and services, to NT$2 billion (US$68 million). This outpaced the industry's growth in other parts of the world during that same year, and Taiwanese firms held high hopes that this trend would continue. In 2007, the Taiwan External Trade Development Council (TAITRA) reported that it expected the country's RFID industry to reach NT$12 billion (US$374 million) in 2010. But last year, the industry was valued at only NT$2.7 billion (US$84 million)—with EPC Gen 2 UHF (860 to 960 MHz) passive tags and readers making up 25 percent of sales, still trailing the largest sector, HF (13.56 MHz) passive tags and readers, at 31 percent. LF (125 kHz and 134 kHz) technology accounts for 20 percent.

In light of slower-than-expected growth, TAITRA now predicts the Taiwanese RFID market will hit a significantly lower target of NT$3 billion (US$93 million) in 2010, and NT$4.6 billion (US$143 million) in 2014. But the organization will continue to highlight the nation's role in the RFID industry at the upcoming fourth annual Taiwan International RFID Applications Show (being held on Oct. 11 to 14), by focusing on a wide range of RFID applications, from ticketing to livestock tracking, as it has in previous years (see Taiwan RFID Technology, Applications Showcased at International Exhibit). While many applications, such as access control and livestock tracking, are not new, end users are beginning to shift from shorter-range passive tags (such as those utilizing the low-frequency or high-frequency RF bands) that historically have been used for these applications, to longer-range, UHF EPC Gen 2 tags.

Favite, an RFID hardware manufacturer in Hsinchu County, has been busy getting ready for growth, producing a broad product lineup of RFID chips, tags and readers, including an EPC tag chip (see Taiwanese Company Unveils EPC Gen 2 Chip With 128-kbit Memory) and several types of RFID-based remote controllers designed to replace traditional infrared models for consumer electronics, such as TVs and DVD players (see TV Remote Controller Uses RFID to Become Battery-Free). But the company has yet to announce any customers using its RFID products.

Favite was founded in 2000 to manufacture automatic optical inspection and measurement machinery, which performs automated inspections of electrical components, such as circuit boards. The company launched its RFID division in 2007, in order to produce passive EPC Gen 2 RFID tags, and has since expanded into readers and converting tags into adhesive labels. The firm makes its own tag antennas, using screen-printing and electroplating, and also employs a flip-chip bonding machine to manufacture strap assemblies that it uses for its own inlays, but also sells to other tag makers. In fact, much of Favite's RFID business is as an original-equipment and original-design manufacturer. But Vince Liang, a sales specialist with the company's RFID division, says he would like to see that change. "We have all of the equipment to manufacture and convert, and we have RFID readers," he states. "Now, we just need customers."

Customers are coming, Liang says, noting that Favite is presently in the final testing stages with a number of television manufacturers that plan to offer the RFID remote controllers with future TV models. But it's obvious to Liang that the industry demand for EPC tags and readers has not yet reached the expectations that the firm had when it first entered the market.

And yet, lower-than-expected demand has not stifled innovations in Taiwan, as RFID remains an important area of study in that country, at ITRI and at companies such as Favite, which recently released an EPC Gen 2 fixed-position reader with a 50-foot read range, a 1.6 GHz Intel processor and up to 2 gigabytes of RAM memory. Other Taiwanese firms, such as Getac and Champtek, are also developing new RFID hardware and solutions. More information on these companies and their RFID applications is expected to be available soon.