The RFID report: the RFID market continues to enjoy excellent growth as adaptation of the technology expands rapidly, and some major ink manufacturers are well-positioned to grow within the conductive ink marketplace

Ink World, May, 2008 by David Savastano

There has been tremendous interest in the areas of printed electronics and radio frequency identification (RFID) tags. This interest is understandable, considering that IDTechEx, a Cambridge, UK consulting firm, places the potential annual sales of the printed electronics market at upwards of $300 billion in the next two decades, with RFID an important part of that market.

IDTechEx forecasts a $5.29 billion RFID market in 2008, up 7.3 percent on the $4.93 billion in 2007. In 2018, that market could rise to more than $25 billion, according to the firm.

"By 2018, the market value will be over five times the size of the market compared to 2008, but the number of tags supplied will be over 300 times that of 2008, driven by the development of lower cost tags and installed infrastructure which will enable high volumes of articles to be tagged," said Raghu Das, CEO of IDTechEx. Mr. Das forecasts that contactless smart cards will dominate until 2009 by value; in 2008, 57.3 percent of the total market value for RFID will be spent on cards and associated infrastructure, with $2.26 billion of the total $5.29 billion being spent on all other forms of RFID, from RFID labels to active tags.

RFID can be found in an incredible array of applications, from military equipment to passports, in transportation through mass transit tickets and toll systems such as EZPass, to livestock and pharmaceutical labeling.

In one example of the potential for growth, 40 million people in Japan now have RFID enabled phones, and these cell phones are speeding up the demand for RFID, as users are able to access anything from tickets to groceries.

On the RFID side, the big target has been the concept of item-level tagging, where RFID chips would take the place of bar codes. The benefits would include inventory control as well as the creation of "smart shelves," in which information could be transmitted to consumers through phones or other readers. However, the cost of even the least expensive RFID chips, combined with the substantial capital investment needed to implement these systems, remains too high to be economically feasible.

While estimates continue to fluctuate as to the future size of the printed electronics and RFID markets, there is no denying that the market for RFID and printed electronics is sizable today, and will continue to grow in the future.

As a result, there is much interest from major international corporations in the market. In February, for example, PolyIC, BASF, Evonik Industries, Elantas Beck and Siemens announced the launch of a new German Federal Ministry of Education and Research (BMBF)-sponsored alliance project called MaDriX to advance the development of high-performance printable RFID tags, which will make printed tags suitable for use in cheaper consumer goods so that they may even come to replace printed barcodes.

Conductive Inks

One of the keys to the potential success of the market is the development of conductive inks, typically utilizing silver as the component. It could be a sizable piece of business: according to NanoMarkets, an industry analyst firm based in Glen Allen, VA, the market for silver conductive inks will almost triple over the next eight years to reach $2.4 billion by 2015. With that in mind, ink manufacturers have sprung up from all areas, leading to a mix of joint ventures, start-ups and conventional ink companies.

PolyIC, a joint venture formed in November 2003 between Leonhard Kurz Stiftung & Co. KG and Siemens AG, has become an industry leader in the conductive ink market. PolyIC has realized two product lines--one in the field of printed RFID that has the brand name PolyID, and a second product line in the field of smart objects that has the brand name PolyLogo.

"With these first printed products, we will reach completely different market segments to conventional RFID transponders," said managing director Wolfgang Mildner. "Thus, we can tap into an enormous market potential, which PolyIC will approach with several pilot applications. We are already testing possible fields of application with various pilot customers."

In addition, some leading international ink manufacturers are developing products for this market.

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One area of success for RFID is smart cards, used for mass transit, money cards and other applications. Kensuke Koga, general manager, RC Sales Development Department for Toyo Ink Mfg. Co., Ltd., said Toyo Ink has seen rapid growth in the global RFID market for tags and systems at the HF frequency, and spoke of the advantages of Hr.

"A distinguishing feature of HF is its short read distance, making it suitable for IC cards for mass transit and money card applications," Mr. Koga said. "This has created strong demand for cost-effective and reliable HF RFID antennas. Etching is the most commonly used method to create these antenna circuit patterns, and volume production is being carried out, lowering production costs and fueling demand even further."

Mr. Koga said that regarding UHF RFID, demand from various industries is extremely strong for the longer-range systems, which are poised to surpass conventional barcodes as a new product tracking or identification method in sectors such as supply chain management. Cost is the key obstacle.