RFID becomes the next major application of China's semiconductors

According to iSuppli Corporation, after years of development, China's radio frequency identification (RFID) semiconductor market will grow by leaps and bounds in the next few years, reaching a huge scale, and sales will more than double in 2009-2014.

It is expected that the Chinese RFID market will grow to US$1.4 billion in 2010, a 22% increase from the US$1.1 billion in 2009. However, this compares with the next few years. By 2014, the RFID market will reach 2.4 billion U.S. dollars, which is more than twice that of 2009.

RFID uses radio waves to transmit data between radar and electronic tags on objects for easy identification and tracking. Many people believe that RFID will replace the bar code system. Compared with the latter, it has many advantages in logistics applications. For example, it does not require contact and line of sight to transmit identification or tracking information.

The rise of China's RFID market is the result of growing demand in areas such as transportation, warehouses, logistics, electronic payments, medical equipment tracking, food safety systems, and asset management.

At the same time, the technology integration in the RFID market continues to increase. Many companies are beginning to study technological innovations and are ready to expand the range of applications for RFID devices, including mobile payments.

Cost Obstacles The cost of RFID still hampers its acceptance on a large scale, despite the many advantages of the technology barcode. However, due to the rapid development of integrated circuit manufacturing technology, the cost of RFID chips has continued to decline, and the price of many high-frequency RFID cards in China has now dropped to about one yuan. The price of labeled products has become cheaper and is expected to decline further. iSuppli Corporation predicts that as the technology matures, the production of related products will also become more mature, which will promote RFID devices to achieve economies of scale.

Red Label In 2010, second-generation RFID shipments drastically decreased, leading to a sharp drop in sales of labels. So far, reader sales exceeded label sales. However, the Shanghai World Expo and Guangzhou Asian Games will strongly promote the development of the market. These two projects accounted for 48% of the overall market.

Overall, the Chinese government’s large investment in the Internet of Things will promote the development of the Chinese RFID industry. The development of the Internet of Things has been included in China's 12th Five-Year Plan. Although the RFID ecosystem is still immature in terms of standards, costs, and suppliers, iSuppli believes that the industry will develop rapidly in the next four years.