RAIN Alliance: RFID Tag Sales Not Immune to Chip Shortages

Article By : Anne-Françoise Pelé

The current semiconductor shortage is affecting various sectors of the economy, and the RFID market is no exception.

The current semiconductor shortage is affecting various sectors of the economy, and the radio-frequency identification (RFID) market is no exception.

To better assess the maturity of the RFID technology, the current market status, and development trends, EE Times Europe engaged in a discussion with Steve Halliday, president of the RAIN Alliance.

RAIN stands for RAdio-frequency IdentificatioN. It is both an industry alliance and a technology, and as explained on the Alliance’s website, it “is meant to be a nod to the link between UHF RFID and the cloud, where RFID data can be stored, managed and shared via the Internet. A RAIN RFID solution uses a reader to read and write a tagged item, manage data and take action.”

The RAIN Alliance said it has weathered the Covid-19 pandemic and recorded seven consecutive years of sales growth. The global value of the RAIN market, including tag ICs, inlays, labels, reader ICs and modules, readers, and printers/encoders, was US$2.2 billion in 2019 and is expected to exceed US$5.1 billion by 2024. However, the semiconductor shortage could slow down the growth momentum this year.

EE Times Europe: Can you briefly explain the ambition and vision of the RAIN Alliance? 

Steve Halliday, RAIN Alliance
Steve Halliday, RAIN Alliance

Steve Halliday: The RAIN Alliance is a global organization for companies involved with passive UHF RFID. The Alliance has 160 members covering all aspects of the technology from tag chip manufacturers to end users. The Alliance’s main purpose is to market the technology to help show the benefits that it can bring.

EETE: In 2021, RAIN RFID tag IC worldwide sales grew 36%, to over 100 billion. How do you explain such a high growth rate? The Alliance claims “the technology is versatile and readily adaptable to a wide variety of applications in any number of markets.” What makes it “versatile” and “adaptable”?

Halliday: The technology has been rapidly accepted into many areas. The main growth area at this time is in retail, with many retail stores already implementing the technology in their apparel departments. In many cases, they are now increasing their adoption to other areas of the store. The technology only requires a small tag to be added to every item in the store. The tag has a unique number that enables applications like inventory to ensure accurate data available to the store. Readers can be either handheld or mounted overhead in convenient locations to monitor the locations of the items.

EETE: What is prompting such adoption? Because it’s a low-cost, passive, battery-free wireless technology that collects data in real time? And no specific software and hardware is required? 

Halliday: The internet of things has been recognized as one of the key drivers to efficiency in our lives. RAIN offers the lowest-cost way to provide identification to items (things) without the limitations of a barcode. Tags can be read without line of sight and can be read at up to 1,000 per second. Any hardware that conforms to the global standards for RAIN can be used (many manufacturers offer tags and readers), and software can easily be written to take advantage of the data.

EETE: What is the forecast or expectation for the full year 2022? 

Halliday: The Alliance’s last Market Research report forecast 2022 to be approximately 35 billion tag chips (20% increase over 2021). However, this was before the global chip shortage was recognized. We now expect the increase to be much lower in 2022, with another big leap in 2023 as chips become available again.

EETE: What are the main sectors to adopt them? 

Halliday: Retail, health care, logistics, aviation (baggage handling), and tires.

EETE: What is the geographical distribution of sales?

Halliday: RAIN has members from all over the world (split approximately evenly). Sales of the technology are approximately split 40% Americas, 40% Europe, 20% Asia.

EETE: Have the Covid-19 pandemic, the Ukrainian crisis, and supply chain disruptions had an impact on the RAIN RFID market?

Halliday: The pandemic appears to have had little negative effect. In fact, for many organizations, the pandemic has highlighted the need for the technology. The supply chain disruptions have certainly had a negative effect on shipments in 2022, but we believe that the level of orders has not diminished, just that the lead times for supply have increased.

EETE: The market is forecasted to exceed US$5.1 billion by 2024. What will be the main growth drivers?

Halliday: Adoption by the rest of the retail world. Larger adoption in health care, particularly pharm, and adoption of the IATA recommendation for the use of the technology on baggage.

EETE: The RAIN Alliance has been collecting this data since 2015. Is the curve linear or is it up and down? 

Halliday: Tag chip sales have increased every year since 2015, with the curve steadily increasing. In our 2020 market research, we forecast almost 60 billion tag chips in 2024.

EETE: What technical challenges remain to be overcome?

Halliday: The technology has changed a lot in the past five to seven years and will continue to change. There is the ever-present requirement to lower the cost of the tags, and with increases in volume, this will happen. With this increase in volume, new technology will be developed to increase the manufacturing capability.


This article was originally published on EE Times Europe.

Anne-Françoise Pelé is editor-in-chief of eetimes.eu and EE Times Europe.


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