Adoption rates for RFID applications

Bernd Tetyczka
Marketing Manager RFID
April 2009
NXP Semiconductors
President & CEO: Rick Clemmer
Headquarters: Eindhoven, The Netherlands
Net sales: $5.4 billion in 2008 *)
Established in 2006 (formerly a division of Philips)
50+ years of experience in semiconductors
Sales: 35% Greater China, 31% Rest of Asia,
25% Europe, 9% North America

NXP provides engineers and designers with semiconductors,

system solutions and software that deliver better sensory
experiences

Businesses:
– Home
– Automotive & Identification
– Multimarket Semiconductors

*) These figures include the Mobile & Personal business which was largely part of the ST-NXP Wireless JV in 2008

COMPANY CONFIDENTIAL
NXP Identification
NXP Identification = IC’s for: RFID + NFC + eGovernment + Smart Cards

#1 in RFID solutions, with more than

1.5 billion ICs shipped
#1 in NFC technology
More than 75% of the world’s e-Passports
use our ICs
Approximately 80% of all contactless
Smart Card schemes worldwide use our
MIFARE® technology for electronic ticketing
in public transport, including London, Sao Paolo,
and 80+ cities in China
Globally installed Infrastructure based on NXP Reader IC’s of more than 10m readers
Chosen by leading medical industries worldwide to track medical tests and authenticate
medications
Core competences : Contactless and security technologies, market know-how

The MST RFID focuses on tagging of objects (and animals)

COMPANY CONFIDENTIAL
NXP RFID Portfolio
Tags and Labels

HITAG 1 / 2 ICODE SLI, -S,-L,-SY

HITAG RO64 ICODE EPC UCODE HSL
HITAG S ICODE UID / OTP UCODE EPC G2 XL
HITAG µ UCODE EPC G2 XM

HITAG ICODE UCODE

125 kHz 13.56 MHz 840 – 960 MHz

ISO 18000-3
Interface ISO 11784/85
ISO 18000-2 HF EPC G2
ISO 18000-6
UHF EPC G2

Vicinity Vicinity Long Range

Reader

HITAG ICODE UCODE

Reader ICs Reader ICs Reader ICs

COMPANY CONFIDENTIAL
Market Segments and frequencies
• library, DVD rental
Libraries • established market, continuous growth
Predom. HF • excellent RF performance, standardisation
• e-Pedigree, anti-counterfeit protection, patient safety
Pharma • emerging market, enormous growth opportunity
HF / UHF • standardisation and legal regulations, compliance
• item level SCM, customer convenience, anti-counterfeit
Fashion • first roll-outs, continuous growth
Predom. UHF • standardisation and supply chain cooperation
• item level SCM, smart shelf
Retail • early trial phase, continuous growth
Predom. UHF • standardisation, mandates, supply chain cooperating
• device enabling and configuration, printer cartridge
CE & • fragmented market, projects, continuous growth
Media • specific feature sets
Predom. HF
• asset management, factory automation, etc..
Industrial • fragmented market, projects, continuous growth
& Others • custom specific solutions
LF, HF, UHF
• Animal ID, food safety
Animal ID • established market, state mandated, continuous growth
LF • standard compliance

COMPANY CONFIDENTIAL
Market Segments: Adoption Status 2009

Library
Animal ID Spiral :
- Education
- Technology
- Cost
SCM - Fashion - Experience

SCM – Retail

Established
SCM - Pharma Adoption
MM - Printers Airline baggage Emerging

COMPANY CONFIDENTIAL
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Advantages of RFID along the fashion SCM
Manufacturer Brand & Logistics

Tracking & Tracing Tracking & Tracing

Counting Counting incoming goods
Return handling / customer Picking quality
complaints Counting outgoing goods
Inventory control Anti counterfeit
Inventory control
Advantages of
RFID in the Comply with mandates
fashion industry

End customer
Retailer
Proof of originality
Availability of products
Easy return handling
Check out efficiency
Info terminals
Electronic vendors
Coordinate information
Inventory control
Adaptive washing machine
Advanced EAS
Measurements of tailored
Return handling
suits on the product
Cross & up-selling
Interaction via NFC

COMPANY CONFIDENTIAL
Generic benefit calculation (EU example)
Step Benefit Value
Production Counting outgoing goods 2ct

Warehouse Counting incoming/outgoing goods 4ct

Picking & Packing 4ct

Transport Verification, processing 3ct

Brand Anti counterfeit 3ct

Less stock -> less bound capital 2ct

Retail shop Verification incoming goods 3ct

Attach EAS label 5ct
Detach EAS label 5ct
Inventory control 2ct
Check out efficiency 2ct
COMPANY CONFIDENTIAL
Customer walk-outs because of missing
products

Data Source

COMPANY CONFIDENTIAL
Market Segments: Adoption Status 2009

EAS by
RFID traditional
EAS

SCM - Fashion

Established
Adoption
Emerging

COMPANY CONFIDENTIAL
 RFID-EAS and traditional solutions
NXP UHF theft detection gate

• Open ‘gate free’ design, unlimited width

• Identifies the product
• Same label for SCM, inventory & EAS
• Only products from the shop trigger
alarms

Traditional EAS gate solution:

• Visible gate in the entry/exit area

• Gates every ~ 2 meters
• Additional tag for EAS
• Possible false alarms with products
21.04.2009
from other shops

COMPANY CONFIDENTIAL 12
Read rates

Average rates tested real live in 500 walk

throughs.
1, 2 & 5 products in a shopping bag.
3 different product categories (Jacket,
Trousers & T-Shirt)

Results
1 Product: 100%
2 Products: 98%
5 Products: 93%

21.04.2009

COMPANY CONFIDENTIAL 13
Software schematic – only one PC for all read
points

DB Data analysis tool

Labeling Station
POS

Hand held for inventory

EAS Gate
21.04.2009

COMPANY CONFIDENTIAL 14
Label options and their impact on EAS

Source tagging Ò Ò Î
Kill password handling Î Î Ò
Securty Î Ò Ò
Cost Ò Î Î

COMPANY CONFIDENTIAL
Advantages of the NXP EAS reference design
Open and ‚gate free‘ EAS gate
Same label used for inventory
and theft detection
The retailer has detailed visibility,
which product is being stolen
– To replenish products more quickly to avoid out of
stock.
– To trigger different actions depending on the value
of the stolen good

The gate can be used secure

– the shop entrance
– the entrance to changing rooms
– back doors

21.04.2009

COMPANY CONFIDENTIAL 16
Manufacturer Retailer Alignment groups

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NXP #1 in ABI‘s RFID Ranking
*
Vendors are assessed on the parameters of
innovation and implementation across
several criteria.
Innovation
“NXP is a constant innovator in the RFID
industry – the company continuously invests
in the development of newer IC manufacturing
processes and continues to release
standards-compliant products.”
“NXP exhibits very strong application
innovation, with proven standards-based
product thought leadership.”

Implementation
“One of NXP’s primary strengths is its vast
global partner network”
“The strength of the NXP’s positioning,
expertise, global reach, volume, and
market innovation is reflected in its rating.”
Michael Liard, research director, ABI: “This Vendor
Matrix is looking at core RFID product categories
to offer an apples-to-apples comparison of direct
competitors along the value chain for RFID
solutions.”

* released by ABI Research in December 2007

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