US$5 billion from IBM for RFID

The main barrier to widespread use of disposable RFID "tags" is cost.

At present, RFID tags consist of a chip and an antenna cost about US20c еach to manufacture, if ordered in the millions - says Paul Moskowitz, of IBM's Industry Solutions Lab, based in Hawthorne.

With chip costs roughly halving every 18 months, Dr Moskowitz hopes within three to five years tags will cost only a few cents. IBM is hoping to use more organic materials in the chips, which will also reduce costs.

RFID technology consists of a tag and a reader. The reader can scan and record each tag as it passes within a set range.

Dr Moskowitz described the technology as being in the mature phase, where more complex tags are used for such things as electronic road tolling, smartcard petrol station refuelling, or recording athletes' times in sports events.

Cheaper RFID tags are used in business for tracking pallets or cases. But if the costs come down, RFID tags could be attached to individual items as a small sticker.

The interest in this is coming from the world's super-retailers, including US giant Wal-Mart, which anticipate savings through better stock control.

"A group of very large companies are demanding this technology," says Dr Moskowitz.

"They believe this will reduce a number of their problems."

The tags should prevent retailers from running out of stocked items, prevent theft, and give them a faster response time to their customers demands, thanks to better stock awareness.

However, Dr Moskowitz says there aren't enough tag manufacturers to cater for the 10 billion pallets of stock Wal-Mart receives a year - let alone the rest of the world.

Dr Moskowitz believes the establishment of an RFID standard for interoperability between the tags of different manufacturers will help accelerate the process. IBM is looking at ways of encrypting RFID tags to build security into the process.

IBM's industry solutions lab draws on part of the company's US$5 billion research and development budget. The focus these days is on applied research, with at least 85 per cent of research conducted expected to result in new products for the IBM range.

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