Wal-Mart's recent memorandum requiring its top 100 suppliers to start using RFID tags by 2005 has retail players scurrying about like shoppers on Christmas Eve.

With the Jan. 1, 2005 deadline less than a year away, semiconductor companies looking to cash in on the United States' largest retailer's RFID enforcement --  not to mention similar ones coming from the U.S. Department of Defense and European retailer Metro -- are setting up shop now while suppliers are in a crunch for time. 

Indeed, news on a partnership between Phillips and IBM for RFID tags and smart card solutions was released from the companies today.

"Right now we are really at a turning point when a lot of companies with little electronic or RFID experience have to go out and implement as a result of the announcements from Wal-Mart or the announcements from the U.S. Department of Defense and more recently from Metro in Europe," Christophe Duverne, VP of marketing and sales, for Philips Semiconductors' identification unit, told Electronic News.

Among those listed on the top 100 suppliers to Wal-Mart are Kraft Foods, Procter & Gamble and Tyson Foods – companies that may have large IT departments, but are not considered semiconductor savvy.

"We've seen a lot of demand from the market and they want a one-stop shop," Duverne continued. "That's what we are doing [with this partnership]."

While the Phillips/IBM agreement just started up in November 2003, with plans to be fully live this year, the companies report that they have been working on RFID tags for about 12 months. Key RFID end-application areas targeted through the cooperation will be supply chain management and retail and asset management, while smart card solutions will be focused on finance, e-government, transportation and event ticketing.

But, as with everything else in the semiconductor industry, it's not only what you bring to market, but also who with that will win big-name customers.

"The partnership is around best of breed partners that we can take to market, but certainly the fact that all of these mandates have come out is driving customers that want to implement RFID quickly," Faye Holland, worldwide RFID leader for IBM Global Services, said. "By working together we can come up with bundled packages to take to market."

Within the scope of the cooperation, IBM Global Services will also build an RFID system for Philips Semiconductors division manufacturing and distribution facilities in Taiwan and Hong Kong.

The first joint project between the two companies is the development and implementation of an RFID solution within Philips Semiconductors to improve the business processes within the manufacturing and distribution supply chain, inventory management and control. In a first step, wafer cases and carton packages will be tagged at Philips' Kao Hsiung manufacturing site in Taiwan and the division's distribution center in Hong Kong.

These types of deals will not end with Philips and IBM. Research house Allied Business Intelligence projects that the RFID market will grow to more than $3.1 billion by 2008, and the time to get in is now.

"The time to build business cases, deploy trials, and firmly grasp the intricacies of the RFID marketplace is now," Edward A. Rerisi, ABI's director of research, said in a statement.  "With over three billion tag shipments expected by 2008, and with retailers and manufacturers already seeing positive returns on RFID investment, RFID will only gain more and more acceptance." 

"I think you are going to have an interesting year," IBM's Holland added. "Phillips has started this year off with their own deployment and you're going to be seeing lots more RFID deployment."

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved