When Silicon Valley-based manufacturer Kovio unveiled the world’s first printed silicon RFID platform for item-level product ID at the 2008 EPC Global conference in Chicago, chief executive Amir Mashkoori bullishly declared that "printed electronics is no longer a vision – it is here".

Mashkoori claimed that Kovio’s first product, a printed silicon high-frequency integrated circuit, would be the foundation for a low-cost RFID tag family and would enable new opportunities for advertisers, retailers, consumer packaged goods manufacturers and system integrators to provide "instantaneous and contextual experiences to everyone who interacts, uses and purchases everyday goods".

The rhetoric was arresting, but more than two years down the line, printed RFID has so far failed to spark the revolution that Mashkoori envisaged, despite Kovio’s technology pushing the price of an RFID tag down to a little less than 10 cents per unit.

"Everybody said that when a tag gets to 10 cents, suddenly the market will start ballooning and people will start to put RFID tags on all kinds of items. That hasn’t happened," says Lee Metters, strategic products director at Domino Printing Sciences.

In retail especially, where manufacturers see the greatest potential for printed RFID, barriers to its uptake remain. Chief among them is the fact that, in spite of the fanfare, printed RFID is not yet a truly commercial proposition. Research projects and venture capitalist firms abound, but aside from a select few companies, who are tentatively taking the technology to market, nobody has the capacity to produce printed RFID in the volumes or at the cost level required by the multinational corporations.

"There are people who say they can print the antenna and attach the chip, but there are also people talking about chipless printer technology," says Mark Gillott, RFID consultant for retail standards organisation GS1.

"Currently, in most cases, production of antennae is a reasonably standard process, where you either lay it down or wash it away and then attach the chip. But it’s not at a cost level that you’d put on a tin of beans. It’s out of the range of supermarkets because you’re still talking about 5p or 6p for that label, which is more than the margin will carry on these products."

Existing applications
To date, conventional RFID technology has primarily been used in back-office applications, such as tracking the movement of pallets between warehouse and store and within the store itself. There are other applications in things such as document management and identification tags, but these are all high-value applications that can support the investment in a 10 cent tag. Low-cost, printable RFID, which would transform the retail world at an item-level and make the barcode obsolete, has always been the great goal, but for the moment that remains a distant prospect.

"If you compare the cost of an RFID tag compared with a barcode, you’re probably looking at least a 100-fold increase, which on a primary pack makes an enormous difference," says Metters. "On a pallet it doesn’t matter so much because you might have one barcode for 1,000 or 10,000 products so the effect on the product cost is very minor, but with individual products it’s much harder."

The problem facing aspiring producers of printed RFID tags is how to navigate around the issue of the high cost of silicon, which is currently a staple component of all tags. "So long as you’ve got a piece of silicon in there, there’s a price tag attached to that because you’ve obviously got to produce it, then handle it then attach it which gives you at least a 1p or 2p cost," says Metters. "Even at big volumes you’re going to have a little bit of a cost to laying down an antenna whether it’s printed or not."

Manufacturers such as Kovio are working on removing the silicon chip entirely and having a completely printed RFID tag. One way of doing this is to replicate the silicon chip by actually printing transistors, which is hard to do but gives you the same benefits as you get from a chip. Kovio’s technology uses a combination of high-performance silicon inks and graphics printing technology which can be printed on thin, flexible foils at, the company claims, a fraction of the cost of conventional silicon technology.

Raghu Das, chief executive of IDTechEx and a proponent of printed RFID technology, says because Kovio’s technology allows them to print in high volumes they can drive down the cost of production. "It’ll be interesting to see how low they can get that down to, but we’re talking 2-3 cents or even less and they do have a route to get to something like 1 cent per tag in the highest volumes," Das says.

Kovio is beginning the process of commercialising its digitally printed tags. One of its first clients is Cubic Transportation, which used RFID in Oyster cards during its integration of the London transport network and now wants to use printed RFID tickets for one-day cards. There is also interest from Japan, according to Das, with a number of companies currently evaluating the technology before committing to a full-scale rollout.

Yet even if printed RFID tags do come down to a unit price that justifies their use at an item level, barriers to their widespread uptake still remain. One of the main problems is infrastructure. Early adopters, including retailers such as Wal-Mart, Metro and Target, require buy-in from all of their suppliers, without which the technology is relatively worthless. "Retailers tag everything so without the infrastructure investment no one gets a payback," concedes Das.

Concerns also remain around security. There has been speculative talk of item-level RFID tags linked to a network removing the need for checkouts in retail outlets, but there is a nagging doubt among businesses that tags can be spoofed, according to Metters. Another known problem involves the use of long-range tags around metals and liquids. "With products that have high water content, such as bottled water and beer, it just doesn’t work," says Metters.

Dress code
One place where RFID is really growing in the retail sector is in apparel. Marks & Spencer is using conventional RFID tags on individual garments to identify sizes. The tags are erased at the point of sale to solve privacy issues, but it means that if you walk past a shelf in store it’ll immediately tell you how many sizes are missing without having to check through the items. Printed RFID could eventually make it cost-effective to tag all items, regardless of their price, although an M&S spokesman claims "it’s not a technology we have used or have looked at using".

Indeed, any talk of printed RFID tags replacing barcodes entirely is dismissed either as unrealistic or, in the most optimistic scenario, a long way off. "Retailers do not see RFID replacing the barcode, they see it as a complementary technology," says Gillott.  Where RFID tags could come into their own in a retail environment is in providing an interface with the end user. The growth of near-field communication (NFC) in mobile phones has the potential to completely change the value of putting an RFID tag on a product. Nokia is now shipping most of its smart phones with NFC communications, the new Google phone also has NFC and rumours abound that the next iPhone will have NFC capabilities. "That really becomes exciting because we have a ubiquitous reader network which is connected to the web, so if you’re in a supermarket and an item is tagged you can read that tag through your phone and get, for example, special offers or it can tell you whether or not that food is good for your diet and all sorts of other things," says Das.

Given the retail sector’s obsession with adding value for consumers, it could just be that RFID as a means of engaging with a product will end up being the application that justifies the cost of item level tagging and prove that Mashkoori’s faith in his "game-changing technology" was well founded after all.

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RFID: CURRENT APPLICATIONS
• Some health trusts are using RFID to manage patient notes in and out of hospitals. When a set of notes get sent by a GP they are tagged at source and can be tracked by a series of readers located in corridors and under consultants’ desks, ensuring that they can never get lost
• Supermarkets have been trialling a system whereby RFID tags are attached to DVD and CD racks. When the shelves require restocking a print-out can indicate precisely where CDs have been mixed with one another and where they need to be moved to
• Wal-Mart, a global pioneer of RFID applications in retail, has made the first move towards using RFID at an item level by using electronic tags to track individual pairs of jeans. The tags can be read by a hand-held scanner and can be used to quickly learn, for instance, which size of jeans is missing