The Shanghai branch of U.S. RFID technology provider Impinj is seeing strong demand for passive UHF tags and readers from the nation's banking, transportation and retail sectors, with the greatest growth coming from consumer goods manufacturers.

By Claire Swedberg

During the past five years, Impinj China, the Shanghai-based division of RFID technology provider Impinj, says it has seen the demand for passive ultrahigh-frequency (UHF) RFID technology increasing across Asia. Leading that momentum are consumer goods manufacturers in China, with factories employing RFID technology for work-in-progress (WIP) and logistics-visibility applications, according to Yue Xi Savage, Impinj's VP of Asia-Pacific (APAC). China's banking and transportation sectors are also contributing to the region's demand for RFID technology, as is its retail industry, with anti-counterfeiting solutions.

The overall RFID market growth in that country is illustrated by Impinj China's expansion of its operations, Savage says. Impinj launched the division in 2010, initially under the name Impinj RFID Shanghai, in a 400-square-foot room with two employees. The company's goal was to better meet the needs of customers and partners throughout Asia. Since then, the firm has moved three times to ever-larger offices in order to accommodate the growth. The facility it opened in Shanghai Technology Park, in December 2014, spans approximately 2,400 square feet and has a sales team of about 10 employees.

Yue Xi Savage

The Shanghai facility includes a demonstration area in which customers can try out Impinj's new xArray RAIN RFID gateway device, an EPC Gen 2 UHF reader with an 18-inch-square integrated antenna array that creates dozens of read zones in order to identify RFID-tagged products and their locations in real time (see Impinj Announces Commercial Availability of Its xArray UHF Reader). Savage says a number of very large Chinese companies utilizing Impinj's products required her firm to expand its facility in Shanghai. Not only are those businesses installing Impinj's Speedway Revolution reader and xArray technology for real-time tag reads, but RFID hardware vendors are manufacturing and selling tags made with Impinj's Monza chips, as well as readers made with its Indy reader chips.

Several years ago, Savage says, she felt that RFID usage in China was growing slowly. But as a growing number of companies, such as retailers, throughout Europe and the United States have been requiring the RFID-tagging of their products, about half a dozen Chinese companies that manufacture these products have opted to take advantage of those tags, in order to gain visibility into their own operations and logistics. At the same time, a number of Chinese RFID hardware manufacturers are embedding Impinj Indy R2000, R1000, R500 and RS500 RFID reader chips into low-cost readers that can be used in assembly lines at factories or at stores in China, in order to enable customers to authenticate a product before making a purchase.

For the past decade or so, Savage adds, the Chinese government has been interested in Internet of Things (IoT) technology and the collection of data based on sensors and RFID tags. Therefore, the government has not only launched its own RFID programs—such as tagging police uniforms to track the use of those garments, as well as vehicle tagging for toll collection—but has also provided funding for some RFID deployments.

When it comes to the retail market, Chinese merchants and consumers are concerned about counterfeiting, since the incidence of fake products is high for everything from food to medications and electronics. Stores are beginning to use RFID to allow shoppers to read a tag on a product at the time of purchase, using a low-cost reader installed in the store, and thereby confirm that it is the real thing. Brands are currently tagging products to make this possible.

For instance, Savage says, a large liquor company in China is tagging its high-value products with EPC UHF RAIN tags. When a store receives bottles of the product, it can use its own RFID interrogator to capture the ID number encoded to a bottle's RFID tag, and then utilize a computer to access the liquor company's server and confirm that the tag ID belongs to a genuine product, and not a counterfeit. According to Savage, manufacturers of apparel, furniture and food products are using RFID in a similar way to ensure the authenticity of their goods purchased at stores.

"Chinese consumers are more sensitive to the risk of counterfeit" food products and the health risks they could provide, Savage notes. One company, a maker of Chinese hot sauce, is applying RFID tags to its products to enable customers to use a store's RFID reader to authenticate the goods they buy. The use of EPC UHF RAIN tags on merchandise in stores is increasing in China, she adds, because the cost of readers has dropped and because there is an anticipation that future smartphones will come with built-in RFID gateway or reader technology.

With tags already identifying each product and its stock-keeping unit (SKU), Savage says, a product manufacturer need only install fixed readers within its own warehouse loading docks, or use handhelds to capture tag IDs as goods are transported from the warehouse, received at the port or loaded onto a vessel. This gives China's product manufacturers supply chain visibility, she explains, so that they can count stock, as well as know which items—and how many—are being shipped before they leave the port in China.

While the EPC Gen 2 UHF passive tags are typically being read primarily in warehouses to aid with logistics, Savage says, some companies are approaching Impinj China and its partners (Impinj declines to name its Chinese partners) for solutions to provide WIP visibility. That's because the rising cost of labor in that nation is forcing factories to find other ways to reduce costs, such as boosting efficiency. By tagging products that are moving through assembly, for instance, companies are learning where their manufacturing efficiencies exist, and can thus adjust their operations accordingly to ensure that products move quickly from one workstation to another.

The technology can also be used to better manage material delivery to the assembly floor, by predicting when it will be needed and identifying how many of which products will soon be manufactured and ready to ship to customers. For instance, if a specific number of goods move through assembly, the system can automatically order additional material or parts.

Some manufacturers of consumer products also intend to use the RFID-based WIP data to update customers—U.S.-based retailers, for instance—regarding the status of goods they have ordered. "I consider this almost a next revolution in manufacturing," Savage says, since it enables the collection and sharing of manufacturing data for both the factory and its customers.

A number of Chinese banks, all under the umbrella of the nation's government, are also deploying RFID technology, with EPC Gen 2 UHF passive tags applied to bags in which cash bundles are stored, as well as readers used at the banks to track how much money is onsite at any specific location, thereby enabling better cash management. This makes the management of money more efficient and more secure, Savage explains, since banks know exactly how many bags they have in each bank or branch.

In the transportation sector, RFID tags are being employed to identify private motor vehicles in some sections of China. "The tagging of cars is a huge issue," Savage states, since vehicles typically require one sticker for registration, another for emission controls, another for a parking permit, and others for additional specific agencies or companies, leading to the presence of typically five or more stickers on the windshield of each Chinese car. With the use of RFID technology, the Chinese government and its agencies can eliminate the need for all of these stickers, by linking all sticker-related data to the unique ID number of a single EPC Gen 2 UHF passive tag. This enables everyone, from police officers to parking attendants, to use a handheld reader to identify a vehicle and confirm compliance with all vehicular regulations.

Passive UHF EPC Gen 2 RFID tags also are being applied to high-speed rail cars, to be interrogated by fixed readers installed in railroad tracks. Data about the cars' locations can then be collected on a server to help railroad managers identify where their assets are located. In the future, RFID-derived location data may also be used to manage track usage.

The continued improvement of EPC Gen 2 UHF RFID hardware itself has driven growth in the Chinese RFID market as well, Savage reports. Companies that use Impinj chips to make readers, for instance, have matured, resulting in less expensive, more effective readers for Asian customers.

Savage expects to see future growth in RFID adoption in China. This, she says, will be driven by that nation's manufacturing industry, as consumers in Europe and North America increasingly demand greater visibility into where their products were made, as well as when and under what conditions.