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1/18/2006
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RFID Production To Increase 25-Fold In Four Years

By far the biggest RFID segment will be supply chain management, the In-Stat survey says.

SAN FRANCISCO — The number of RFID tags produced worldwide is expected to increase more than 25 fold between 2005 and 2010, reaching 33 billion, according to market research company In-Stat.

Total production of RFID tags in 2005 reached more than 1.3 billion, according to a recent report.

RFID production will vary widely by industry segment for several years — for example, RFID has been used in automotive keys since 1991, with 150 million units now in use, a quantity that greatly exceeded other segments until recently, according to In-Stat (Scottsdale, Ariz.).

"By far the biggest RFID segment in coming years will be supply chain management," said Allen Nogee, In-Stat analyst, in a statement. "This segment will account for the largest number of tags/labels from 2005 through 2010."

Nogee added that Wal-Mart, the world's largest retailer, spurred this projected growth by mandating that its top 100 — then later its top 300 — suppliers begin employing RFID.

According to In-Stat, its recent report on the subject, "RFID Tags And Chips: Opportunities in the Second Generation," concludes that the spread and use of RFID in most sectors will be largely determined by cost, which is dropping quickly for both RFID tags and labels.

The report also finds that pharmaceutical companies are investigating using RFID tags to reduce counterfeiting and black market sales, and that courts and governments around the world are currently in the process of examining RFID-related privacy issues, according to the company.

In-Stat said the report also contains estimates and five-year forecasts for the number of tags produced and revenue earned from tag sales, broken down into several segments. In addition, the company said, the report contains estimates and forecasts for tag/label average selling price for each segment.

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