Explosive growth projected in next 5 years for RFID tags

By Control Engineering Staff March 2, 2006

In-Stat . Production will vary widely by industry segment for several years, however, the high-tech market research firm says. For example, RFID has been used in automotive keys since 1991, with 150 million units now in use. This quantity greatly exceeded other segments until recently.

“By far the biggest RFID segment in coming years will be supply chain management,” says Allen Nogee, In-Stat analyst. “This segment will account for the largest number of tags/labels from 2005 through 2010. Wal-Mart, the world’s largest retailer, has spurred this projected growth by mandating that its top 100 (and, later its top 300) suppliers begin to use RFID.”

A recent report by In-Stat found the following:

• Spread and use of RFID in most sectors will be largely determined by cost, and cost of RFID tags and labels are dropping quickly;
• Pharmaceutical companies are investigating using RFID tags to reduce counterfeiting and black market sales; and
• Privacy issues have been raised concerning many uses of RFID, and currently courts and governments around the world are in the process of determining related legal issues.

The $2,995 report, “RFID Tags And Chips: Opportunities in the Second Generation,” contains estimates and five-year forecasts for the number of tags produced and revenue earned from tag sales, broken down into the following segments: livestock, domestic pets, humans, cartons/supply chain uses, pharmaceuticals, large freight containers, package tracking, consumer products, security/banking/purchasing/access control, and others. In addition, there are estimates and forecasts for tag/label ASP for each segment. Analysis of market drivers and challenges is included.

— Richard Phelps, senior editor, Control Engineering
richard.phelps@reedbusiness.com