South Korean RFID Vendors See Enormous Global Opportunities

Tag and reader vendors boosting research and product investments, working collaboratively with government

Tag and reader vendors boosting research and product investments, working collaboratively with government

Oyster Bay, NY  March 29, 2006  South Korean vendors began radio frequency identification (RFID) development more slowly than their global rivals, but they believe that they can still enjoy enormous opportunities in the international market place, especially in the UHF segment, according to a new report from technology consultancy ABI Research.

According to ABI Research analyst Andy Bae, a number of tag and reader vendors, as well as middleware and system integration service providers, have boosted their investments in R&D activities and mass production capacities since 2005. Also, technology transfer through collaborative R&D projects with Korean government-owned institutes will play a pivotal role in enhancing vendors' capabilities.

"The South Korean RFID market landscape is gradually changing because the large South Korean players  mainly conglomerate companies such as Samsung Electronics and LS Industrial Systems  are expanding their mass production capacity," says Bae.

"Global competition is lowering tag prices," he adds, "and South Korean manufacturers will continue to build on this trend and offer very competitive prices."

The South Korean government's initiative for technology development and national-scale RFID trial services has played a pivotal role in increasing RFID adoption. A number of individual South Korean enterprises began to introduce RFID in 2005, and their interest continues to grow.

Currently, RFID projects in South Korea have been deployed in the following markets: logistics, retail, publishing and library services, healthcare, manufacturing operations, education, government and public services, consumer goods, defense, shipping and transport, and livestock. Of these, tracking for logistics and RFID-based libraries demonstrate the highest adoption rates.

"In 2005 the [high-frequency (HF)] tag segment, accounting for more than 60 percent of the market, led growth," Bae notes. "But from 2006, as more private companies adopt RFID, UHF and microwave will drive the market."

The Korean government's announcement on February 8 of a "u-IT 839" policy  which added RFID into a new growth engine by revising the current IT 839 program for promoting the growth of Korea's IT industry  will have a strong impact on the South Korean RFID market, ABI believes. "This is a truly significant announcement for RFID, because the technology is closely involved with the entire 'U Korea' ubiquitous sensor network project," ABI writes.

South Korean vendors are also working with the government and with each other in an official organization that will focus on cross-sharing patents and preparing to debate with global players through analyzing patents pools.

A new ABI Research study, "RFID Markets in South Korea," identifies the issues  such as standards, process changes and privacy concerns  that are critical to the growth of the Korean RFID market. Shipments and revenues for tags and readers, as well as middleware and integration services, are forecast through 2012.

Additional Articles of Interest

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 RFID technology has the potential to change the way supply chains are managed, but in order to be effective businesses need to take a holistic look at the deployment. Read more in the article "Time for RFID: Applying RFID in the Supply Chain."