Dec 16, 2005This article was originally published by RFID Update.
December 16, 2005—Chip maker Impinj of Seattle, Washington, today announced that it has secured a $26.5 million round of funding. GF Private Equity Group LLC led the round, which, along with VentureTech Alliance, is a new investor in the company. Returning investors ARCH Venture Partners, Madrona Venture Group, Mobius Venture Capital, Polaris Venture Partners, Unilever Technology Ventures, UPS Strategic Enterprise Fund, and the Viterbi Group also put in money.
Five-year old Impinj bills itself a fabless semiconductor company. It produces the silicon chips that act as the brains of passive RFID tags being deployed by companies under mandate. The chips, also referred to as "silicon", are sold to companies like Avery Dennison, Alien, and UPM Rafsec, who attach each chip to an antenna on a substrate, thereby making an inlay that is sold to label makers and converters. So while Impinj's chip products are not consumer facing, they are as fundamental to RFID tags as Intel processors are to personal computers. (Trivia: Carver Mead, Impinj co-founder and Professor Emeritus at Caltech, was employee number five at Intel.) Impinj's "fabless" designation means that the company designs its chips but outsources the manufacturing. Taiwan Semiconductor Manufacturing Corporation (TSMC), with the world's largest semiconductor foundry, is the manufacturer of Impinj silicon.
The company was the first to release Gen2-compliant chips. Back in April, Impinj announced Monza, which seven months later is the only Gen2-compliant chip available in production quantities on the market. That means that the vast majority of Gen2 tags sold today have Impinj silicon in them. In September the company announced that shipments of its Gen2 silicon would "eclipse 50 million units in 2005", an amount the company has already exceeded. A few weeks later, Monza (along with Impinj's Speedway reader) was awarded formal Gen2 certification by EPCglobal. Then at the end of November, Impinj announced a supply agreement with Texas Instruments. For its initial production of Gen2 inlays and straps, Texas Instruments will use Impinj silicon.
While Impinj currently enjoys exclusive leadership in Gen2 silicon, that role will be increasingly difficult to maintain. The company is a sort of David among Goliaths Philips Semiconductors, Texas Instruments, and STMicroelectronics. Each of those three multibillion dollar companies is expected to offer Gen2 silicon, ramping up production in 2006 and beyond. Just last month, Philips became the second company (after Impinj) to receive EPCglobal Gen2 certification for its silicon, which the company plans to have available in production quantities next month. And despite the supply agreement with Impinj, Texas Instruments is planning to leapfrog existing Gen2 chip technology with the introduction of 130-nanometer process node technology in 2006, which it claims will offer superior performance.
These competitive threats are very real, but Impinj seems as well positioned as possible to continue its market share grab. The funding announced today marks the company's fourth round, bringing the total to over $75 million. This will probably be the last round, according to an Impinj representative, given the company's progress toward profitability. It expects to be profitable for the fourth quarter of 2005, and while it won't make any statements about 2006 financial projections, the outlook is positive. In fact, the company is not shy about hinting at its ambitions for an IPO probably sometime in the next two years. An IPO is "certainly on the horizon," said the rep. "We're not saying when yet, but stay tuned."
Read the Impinj press release about the funding