RFID production to explode in 5 years

More than 33 billion radio frequency identification tags (RFID) will be produced worldwide by 2010. That is more than 25 times the amount manufactured last year, according to a market research firm report released Jan. 18.

In-Stat analysts forecast RFID tag production will vary by industry for several years. But the supply-chain management segment will account for the largest amount by 2010.

Allan Nogee, In-Stat’s principal analyst who studies the wireless industry, said the report does explore the Defense Department’s use of RFID tags in asset management.

Although the Defense Department – along with Wal-Mart – has made tremendous strides in using the technology for supply-chain management, he said DOD is also an early adopter of the technology for asset management, more than the commercial sector. That’s because RFID tags for asset management, which keep track of office equipment, weapons and parts, vehicles and large cargo containers, are more expensive and can be detected at longer ranges, he said.

Nogee said the report forecasts as many as 346 million tags will be produced for asset tracking by 2010 for military and nonmilitary uses worldwide. Nogee thinks most of the production will be for military uses. RFID tags used by DOD range in price, but most are probably in the high end, he said.

Outside the military, he said RFID costs are certainly a barrier to more widespread use in commercial and government sectors. The “magic figure” is 5 cents per tag, he said.

“We’re not anywhere close to that yet,” he said.