RFID Continued to Grow in 2007
Value of RFID grew to $5 billion, with U.S. remaining the largest market, and China becoming the third-largest in terms of projects.
In round figures, the value of the RFID market grew strongly to $5 billion in 2007, mainly powered by a peak in deliveries of the Chinese national ID card with about $2 billion of cards and infrastructure being delivered by Chinese suppliers. That made China the biggest RFID market, but if we peel that away, we see the U.S. as the biggest market.
Globally, the RFID business remained government driven with the healthcare sector showing particularly strong growth in projects and the financial, security, safety sector dwarfing all others in both expenditure and number of projects. It accounted for 48 percent of market value with passenger transport, automotive coming second with 19 percent value share.
Leading countries by number of projects
Through 2007, the U.S. retained its lead in number of RFID projects but China leapt from number 5 to number 3, overtaking Japan and Germany. This tells us that there are a vast number of new RFID projects in China that will take up the slack now that the glory days of the national ID card are over. They are hugely varied from pigs to mail bags and the prospect of having to tag 150 million pet dogs and 2.4 billion pigs yearly by law. Maybe the 37.5 billion cigarette packets produced every year will be RFID tagged. For a full analysis read the IDTechEx report “RFID in China.”
Biggest application sector by number of projects
In number of projects, financial, security, safety sector was the biggest at about 19 percent of the cumulative projects in 2007, in line with our identification of it as the leader in money spent. This bodes well for this sector remaining very important in the future. In 2007, this pre-eminence in numbers of projects was driven by passports (at least 50 countries now) and RFID financial cards all moving ahead strongly. New adoption of RFID tickets, secure access, RFID enabled phones and other applications also helped this sector. Little wonder that Assa Abloy, specializing in this sector and buying at least one RFID company every year, is probably the biggest company in RFID worldwide.
The Chinese ID card scheme may be huge, but it is supplied by a large number of Chinese companies and government system integrators. After that came the passenger transport, automotive sector with 13 percent of all projects cumulatively. Those percentages were the same as in 2006. Just one application sector took significantly more of the pie by the end of 2007. It was Healthcare. This was predicted in 2006 but it did not happen for the reason given – widespread tagging of drugs for anti-counterfeiting purposes. Many were in favor of the half measure of 2D barcodes for singulation. As a result, frequent automated checking for counterfeits regardless of misorientation and obscuration and with high integrity will be a matter for interminable RFID trials and little more. Even the frequency remains undecided.
Some things did not change
By the end of 2007, most RFID projects were still full rollouts, showing that the industry is more mature than it is often portrayed. Despite the dream of Massachusetts Institute of Technology in 1999 that most RFID tags could contain nothing more than simple read-only numbers, the computer system coping with the rest, this cost-effective approach remains impracticable for most applications. At the start of the year 27 percent of projects involved read-only tags and at the end of the year, the figure was 26 percent.
Among the largest RFID suppliers, Huahong in China exhibited one of the fastest organic growth rates in 2007. IDTechEx believes that Kovio made the most significant advance in RFID technology in 2007, with the capability of printing thousands of silicon HF transistors to meet specifications designed for silicon chips but at 80 percent and later 90 percent cost reduction. Production is planned for the end of 2008.We believe that the biggest impending project for RFID is the UK national ID card, which is planned at a cost of $10 billion and slated to escalate to triple that figure.
For the complete article, “Review of RFID in 2007,” go to www.idtechex.com.