Royal Philips Electronics said Friday it's shipping radio-frequency identification chips based on the new ultra-high-frequency electronic product code Class 1, Generation 2 protocol. The protocol promises RFID chips that have faster, more consistent read rates than chips based on earlier RFID specifications.

In February, tag manufacturers received a limited number of sample chips and are evaluating their performance. Companies participating in the tests are ASK, Checkpoint, Deister Electronic, Feig, Intermec, Omron, SAMSys, Thingmagic, UPM Rafsec, and X-Ident.

Germany's Metro Group AG is expected to begin testing tags built with the Gen 2 chips by May or June, says Dirk Morgenroth, marketing manager of RFID at Philips Semiconductors. "Metro wants to run tests as soon as possible, but there are other companies that have confirmed an interest."

Wal-Mart Stores Inc. has also expressed interest in moving to the Gen 2 protocol. Last week during an interview at a Wal-Mart Supercenter in Lewisville, Texas, Simon Langford, Wal-Mart's manager of global RFID strategy, said the retailer expects to start testing tags and readers based on the Gen 2 protocol within six weeks.

Philips is manufacturing its UCODE EPC Gen 2 chip at its semiconductor-fabrication facility in Nijmigen, Holland. The minimum quantity the fabrication site can build is about 1.5 million pieces on 8-inch round wafers, and they can make an average of 24 to 48 wafers at a time.

Philips' UCODE EPC Gen 2 chip features a one-time programmable memory for the 96-bit EPC, covers all mandatory commands, and provides a selection of optional commands as specified in the Class 1, Gen 2 standard defined by standards group EPCglobal Inc. The chip uses an anti-collision algorithm that enables the reading of up to 1,600 labels per second under current U.S. regulations and up to 600 labels per second under current European regulations. Through a flexible implementation of the application field identifier, the integrated circuit, or chip, for the tag will support both EPCglobal and pending 18000-6c coding structures from the International Standards Organization.

The UCODE EPC G2 chip is scheduled for mass production between July and September. It's priced at 9 cents in quantities of 10,000 units.