Friday, September 14, 2007

China Leads RFID Utilization

A massive national identification card program will allow China to leap forward this year as the world’s largest market for radio frequency identification devices, or RFID, by value, according to a new industry study.

The study, compiled by IDTechEx, found that China would account for the largest single portion, $1.96 billion or 38 percent, of the $4.96 billion to be spent globally on RFID in 2007. The study also found that East Asia, including China, would account for more than half of the world total of RFID spending, with $2.7 billion projected for all of this year.

The Chinese surge in the global RFID market, according to the study, is due to a peak in delivery of national identification cards in the country prior to the 2008 Beijing Olympics. The study cites statistics showing that about $1.65 billion of the 2007 Chinese total is being spent on 300 million of these cards plus their associated systems. The 2007 card deliveries are part of a larger multiyear $6 billion national project, by far the largest RFID project in the world. An additional $250 million in other RFID tags and their systems, most related to transport, cash replacement and secure access cards, rounds out the Chinese totals.

The study noted that as the Chinese national ID cards system concludes, China will again drop below the United States and probably Japan in value of its RFID market, though its market share will continue to grow rapidly. IDTEchEx analysts found that within 10 years this rapid growth will more than compensate for the RFID market share drop expected when the national card program wraps up. RFID sectors expected to see large increases in China include animal tagging, transport, cash replacement cards, secure access, manufacturing, military and supply chain applications.

The top dozen RFID firms in China will account for $722 million, or nearly 37 percent, of the nation’s entire $1.96 billion RFID market for 2007. IDTechEx found that the top eight RFID firms in China were all contractors of the national ID card program. Two hundred other local and foreign suppliers share the remaining $1.3 billion slice of the Chinese RFID market value.


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