RFID and Printed Electronics

By David Savastano, Ink World Editor | 05.18.06

Experts predict that RFID and printed electronics will grow into a $16 billion business within the next 10 years. What role will the ink industry have in that growth, and who is best positioned to take advantage of this opportunity?

There is tremendous interest in the field of radio frequency identification (RFID) and printed electronics. The reason is fairly clear: major retailers and institutions need to be able to more accurately and efficiently track inventory, and RFID and printed electronics are considered the ideal solution.

Actually, RFID has already made inroads in everyday life. Anyone who uses electronic toll tags such as EZPass in their cars has an RFID system. The Expo held in Osaka, Japan utilized 25 million RFID tickets produced by Toppan Printing.

The mandate by Wal-Mart and other major retailers that RFID chips be installed on pallets is the first step to the ultimate goal of item-level tagging. When that is accomplished, a consumer can go to a supermarket, pick their products, simply walk the cart under a scanner and get the total bill. Meanwhile, smart shelves will know if items are out of stock or expired.

While that may seem very far off in the future, there are prototype stores in Dubai and Germany testing out the concept.

The day may come when appliances will recognize RFID tags, and refrigerators will determine inventory and when food will expire, and washing machines will recognize colors of clothes.

By 2016, industry experts estimate the total market for RFID and printed electronics will reach upward of $16 billion. That is plenty of reason for interest by major corporations. Among the major companies that are heavily involved in the marketplace are Texas Instruments, Avery Dennison, Alien Technologies, Impinge, Symbol, UPM Raflatec and Toppan Printing.

An X-type antenna. (Photo courtesy of Flint Group)
However, there are major hurdles to overcome, beginning with the cost of these labels and how they are applied. Presently, a label using an RFID chip and an adhesive costs, at minimum, 7 to 10 cents per label. While that is reasonable for a pallet, when it comes to putting a tag on a bottle of soda or a candy bar, 7 cents is expensive.

There are countless companies trying to solve the cost issue, but it most likely comes down to developing printed conductive antennas, most commonly using silver ink, which can be printed in the millions by a web, screen or gravure press.

That is where established and new ink manufacturers come in. Sensing an opportunity, Sun Chemical has developed alliances with InkSure and QinetiQ and is working on its own projects. Flint Group formed Precisia, and although that subsidiary has since been folded back into the parent company, it is still active in the market. Markem has developed solutions based on its coding expertise.                     Meanwhile, companies such as Paralec and XINK have been formed, developing new technologies and alliances to move into this powerful new market, while Motorola, Dow Corning and many other major corporations are also examining the field.

While RFID and printed electronics are now only a small business, there is little doubt it will become a major opportunity in the coming years.

The Market for RFID And Printed Electronics

What is the potential for the RFID market? Dr. Peter Harrop, IDTechEx chairman, discussed the possibilities during the recent RFID Smart Labels conference held in Boston, MA. The conference was attended by 500 people from more than 30 countries, a good indication of the growing interest in the market.

“Visa, MasterCard and American Express are going contactless, and will require 4.5 billion RFID cards eventually,” Dr. Harrop said. “Do you want to make them? China’s national ID Card is RFID, and they will need one billion, at a cost of $2.20 each. They are used for secure access and transportation.”

Dr. Harrop predicted that by 2016, labels on items will be a $10.85 billion business, while item level tags, perhaps as many as 550 billion tags, will be a $5.5 billion business. Pallet cases and animal tagging will each be more than $1 billion.

“There is no going back; retailers see the payback already,” Dr. Harrop said. “Tagging of animals is increasingly driven by law, although the U.S. is in denial. Use of RFID on airport baggage, apparel, tires and secure documents are already underway.”

The RFID market really breaks down into two different segments – RFID tags, which have more powerful capabilities but require a chip to function, and printed electronics, the high volume, low-cost approach.

“What you are seeing is a pretty substantial bifurcation of the tag market between printed electronics that have modest data and security capabilities but cost less that a penny per piece, and chip tags that are higher performance and security but are substantially more expensive, at 7 to 10 cents per tag,” said Patrick Sweeney II, president of Odin Technologies, a leader in the physics of RFID infrastructure deployment, solution design, testing and installation tools.

Printed electronics, which would be used for item-level and pallet-level projects, does not need to have extensive information capabilities or read rates.     

Alistair McArthur, CTO of TagSys, discussed for TagSys and Pfizer developed an RFID system for Viagra, with CCL as the label manufacturer, to combat counterfeiting.

“Counterfeiting is alive and well, and it is a real issue when it affects people’s health, such as in pharma, where up-labeling occurs,” Mr. McArthur said. “Pharma sales were $350 billion in 2005, and counterfeiting was estimated at $39 billion, and is growing faster. Viagra is the most counterfeited drug in the world. Every bottle of Viagra was tagged, with 48 bottles in each case and 120 cases in a pallet. It has many layers of authentication, and pharmacies could use a web-based RFID handheld reader.”

During the RFID Smart Labels conference, Jamshed Jubash of Procter & Gamble showcased how P&G uses RFID on Gillette’s promotions.

“This was a fairly big commitment, and we wanted to see where the business opportunities were,” Mr. Jubash said. “The results for our Fusion release have been phenomenal.”

Active tags, which utilize more extensive information, are necessarily more complex. For example, RFID has made a major difference for the military, which uses active RFID systems to locate equipment and parts.

“The Department of Defense has six million different SKUs, which makes it just about as hard as it can get,” said Nicholas Tsougas of the U.S. Department of Defense. “We move around all day, every day, and we wanted better visibility of our assets. Our focus is on improving the business process, and RFID is an enabler and tool to drive the transformation. We want visibility of items from the day they arrived to the day they were disposed of.”

RFID has made a significant difference for the Defense Department.

“Because of RFID, we can find items in the field fast; for example, we saved $6 million on equipment when we were able to locate a big piece of equipment through RFID,” Mr. Tsougas said.

Mr. Tsougas said that there are issues that need to be addressed. “There are challenges ahead, such as the state of the technology, the ability to improve read ranges, security and privacy, and we need to see prices come down,” he said. “Waste stream is an issue, as 10 billion tags equals 800 metric tons of silver. You need interoperability, the ability to read all frequencies with one piece of equipment.”

There are other challenges to be met. Imaging through metal or conductive fluids remains a challenge, although industry leaders expect solutions to be developed soon.

Opportunities for Ink Manufacturers

Depending on where the market heads, ink manufacturers may very well see excellent opportunities. Presently, the thought is that the tags will be printed by gravure, screen, flexo or offset; inkjet, which has made so many gains, is thought to be less conducive to the market due to the high-volume nature of the business.

Dr. Graham Battersby, vice president and chief technology officer at Flint Group, said that Flint Group is presently focusing its efforts on conductive inks for RFID and printed electronics, and developing partnerships with other technology leaders.

“You can’t do anything in RFID without working with other companies, such as printers, chip manufacturers, attachers, suppliers and integrators,” Dr. Battersby said.

Measuring conductivity in circuits. (Photo courtesy of Flint Group)
Sun Chemical has been working with companies to develop products for the market.

“For the past few years, Sun Chemical has worked closely with its partners and customers to overcome the barriers limiting growth of the RFID market,” said Philippe Schottland, manager of Sun Chemical’s Advanced Technology Group, which performs research and development on a variety of cutting-edge print technologies. “Our inks have already contributed and will continue to contribute to improved robustness and the reduction of the cost of an RFID antenna. Our etch resists, printable silver screen ink, water-based silver flexo ink, seed layer ink and upcoming copper precursor ink are a portfolio of solutions that have taken the cost of an UHF tag antenna from above 4 cents to less than 1 cent.

“Sun Chemical has helped customers with the adoption of these technologies in their laboratories and manufacturing sites,” Mr. Schottland continued. “Our efforts in printable electronics are focused on developing high quality inks for a range of printing processes and testing to ensure the robustness of the circuitry. We promote forming strategic alliances with technology providers, printers, circuit designers and OEMs to bring strong value propositions to the market and be a major player as the market evolves.”

One key question is whether the market is indeed heading toward the printed electronics field.

The key to low-cost systems is to produce the product as inexpensively as possible, and that is where printing and ink comes in.

“To get to the item level, the cost of the chip itself and the attachment have to come down,” Dr. Battersby said. “If you could print the chip in-line on the article itself, you could get the cost down significantly. I think that ink and printing are a very key aspect for this market.”

“The future is to be able to print the chip and antenna at the same time,” said Geva Barash, CEO of Parelec Inc. “I think that’s 10 to 15 years out due to the capacity of the chip. A 28 kb chip doesn’t answer the market’s needs.”

Mr. Schottland noted that several large companies have made significant investments in the area of printed electronics.

“There are certainly applications where printable electronics might truly provide a better value proposition than silicon,” he added. “In the short term, the market growth will be in hybrid technologies where printed layers co-exist with silicon chips. As the technology evolves, we could see the beginning of a growth story for fully printed electronics.”

Sun Chemical has made partnering with formulators and OEMs an integral part of its strategy for RFID and printable electronics. “Sun Chemical has a leading position in the traditional ink market as well as in performance pigments,” Mr. Schottland said. “Our core competencies in ink formulation, print process expertise through our close relationships with printers and press manufacturers, design of small particles, and materials science and characterization are the foundation for our development activities in this field. We also have the manufacturing capability and the Six Sigma rigor to take great ideas and turn them into a saleable product. We are committed to helping our customers succeed with our products in the traditional ink market, and we fully intend to help them and new customers succeed in printable electronics as they decide to embark on this journey with us.”

Markem, one of the world’s leading providers of marking and coding systems, has developed RFID solutions that are purpose built for the production line and distribution center floor. They deliver an integrated package of RFID hardware, software and services.    

Through its Total Services Approach, Markem  offers a comprehensive set of services designed to bring companies from RFID pilot to production, while offering Project Management services.

Aside from established ink manufacturers, there are many companies, large and small alike, that are involved in the market. Companies as large as Motorola and Dow Corning are working on technologies.

Poly IC, a joint venture formed in 2003 by Leonard Kurz GmbH & Co., which owns 51 percent, and Siemens AG, has developed printed electronics chips. The company anticipates being able to go below silicon costs down to a cent price, and expects to go to market in 2007.

Smaller companies are also developing cutting-edge solutions. For example, Parelec Inc., a conductive ink specialist located in Rocky Hill, NJ, is focusing its efforts on being an unbiased facilitator for customers and partners as well as its Parmod VLT inks.

Paralec developed its Certified Printer Program, an innovative and comprehensive program for customers in the RFID value chain, to bring together printers, substrate manufacturers, chip suppliers, attachment technologies, label makers, custom integrators and end users to streamline project production.

Being able to recommend technologies is also the approach used by Odin Technologies. “We’re in the perfect spot from a vendor’s perspective, as we can recommend the best technology to clients, and we are not beholden to any technology,” Mr. Sweeney said. “It really is interesting to see how the market is developing.”

XINK, an Ottawa, Ontario-based specialist in conductive inks, has successfully run its products on Mark Andy flexo presses, getting a read range of more than 14 feet. The company has also presented its sub-cent printed RFID antenna solutions at LabelExpo 2005 in Shanghai.

James Neilson, XINK’s product manager, said that XINK’s background in conductive inks for pharmaceutical smart packaging, in which a conductive ink sensor grid can detect when a patient pushes a tablet out of a blister pack of medications, has been integral in its RFID research.

OrganicID, founded in December 2003, has quickly established itself as a leader in the field of organic electronics and low-cost printable RFID tags.

InkSure Technologies Inc. specializes in comprehensive security solutions, designed to protect branded products and documents of value from counterfeiting, fraud and diversion.

“We are developing new chipless label technology for low cost RFID applications, to be launched at the end of the first quarter in 2007,” said Don Taylor of InkSure. “We want to achieve a sub-cent target. We are very excited by these technologies and the possibilities.”

Ultimately, printed electronics should be able to carve out a huge business in the coming years. It remains to be seen which companies will flourish, and how quickly the technology spreads into mainstream markets.

“We still think that high-speed printing is the way to print tags in the billions,” said Mr. Neilson. “The market will shake out in the next five years.”

“The role of RFID in the supply chain is definitely developing, but it is slower than everybody thinks,” Dr. Battersby said. “It will become a large marketplace, but it will take a few years to get there.”