RFID has a future in electronics

By Staff -- Modern Materials Handling, 6/1/2006

The electronics industry makes little use of RFID technology today. However, researchers at Venture Development Corp. (VDC) predict that will soon change.

Makers and distributors of electronics components and products spent $34 million on RFID systems in 2005, according to VDC research. This market is expected to grow at about 42% per year through 2010, when the market would reach $200 million.

Today the most common use of RFID systems in the electronics industry is in security applications, such as building and parking lot access. The growth VDC is predicting, however, will be in asset management, shop floor automation and supply chain management.

In fact, some RFID manufacturers are already using their own products in supply chain applications.

Philips Semiconductors, for example, is tagging cases of Philips ICs at a manufacturing site in Taiwan and tracking those cases as they move through its supply chain. Philips reports this inventory management system has improved delivery reliability and inventory turnover while shortening billing cycles.

The most interesting applications for RFID in the electronics industry, says Michael Liard, director of RFID research at VDC, will go beyond the supply chain. In the longer term, RFID will be integrated into electronics products.

For instance, RFID-enabled cell phones will pay for purchases at vending machines and RFID-enabled printers will alert users when ink cartridges are running low.

VDC's report is the last in a series on the future of RFID in specific vertical markets. Compared to the other markets VDC studied, the electronics industry is a relatively small one for RFID. Last year, the the transportation industry spent $767 million on the technology while government spent $269, the auto industry $312 million and health care $45 million.