This year, for the first time, China has become the world's largest market for RFID by value, according to a new report "RFID in China 2007-2017" by IDTechEx. In 2007, East Asia will spend $2.7 billion of $4.96 billion spent globally. The majority of this -- $1.9 billion -- is China's portion.
The reason for this, according to IDTEchEx analyst Ninig Xiao, is the national identification cards that will be used in the 2008 Olympics. About $1.65 billion is being spent on 300 million cards plus associated systems to be delivered this year. The entire project is $6 billion, the largest of any RFID project in the world. Additionally, another $0.25 billion will be spent on RFID tags and their systems, most of this related to transport, cash replacement and secure access cards.
When the market for these ID cards is saturated, China will sink below the U.S. and probably Japan in the value of its RFID market but that market will nonetheless be growing very fast, said Xioa. Within ten years, the RFID market for animal tagging, transport, cash replacement cards, secure access, manufacturing, military and supply chain applications will more than compensate for the loss of the ID card market.
Looking at who is supplying these cards, the report found that the leading 12 RFID companies account for $722 million of the Chinese RFID market size in 2007, 36.8% of the total $196 million RFID market in China. The top 8 RFID operations in China were all contractors of the national ID card scheme. Huahong Group comprises two major subsidiaries: chip manufacturer Huahong NEC and chip designer Huahong IC. Likewise, Datang Microelectronics received orders for both chip design and chip module encapsulation. SMIC is a top 10 semiconductor foundry in the world. Datang and Eastcom Peace were among the top 8 smart card manufacturers in the world.
Some 200 other local and foreign suppliers share the remaining $123.8 million market value. These suppliers include foreign chip suppliers who have played a major part in RFID applications in China. For example, NXP supplied chips for the Beijing public transit cards and campus cards, and Inside Contactless won the Ministry of Communication order for the 7 million transportation certificate. Other chip suppliers active in Chinese market include Texas Instruments, STMicroelectronics, lnfineon, EM Microelectronics, Atmel, etc. Meanwhile, leading local RFID companies are achieving significant growth. Invengo had implemented the $80 million RFID project for Ministry of Railways. Other major players include Vision Electronics, Sample and Hsic.
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