Market momentum in RFID

Market momentum in RFID

Almost two years after the Covid-19 outbreak began, the world is still in the tunnel. Despite the negative impact of the pandemic there are some positive aspects. For example, digitalisation has been accelerated as businesses are pushed to adopt technologies quicker, in order to improve production as well as management efficiency.

Radio Frequency Identification (RFID) is a wireless technology used in various businesses – including personnel identification and contactless card transactions, as well tracking goods ranging from retail apparel to manufacturing parts – and has proven itself to be a resilient industry during Covid-19. According to the IDTechEx market research report, RFID Forecasts, Players and Opportunities 2022-2032, Covid-19 impacted the whole RFID business in 2020, especially in sectors that require physical on-site work. Despite this, however, the market rebounded very well in 2021.

For the ultra-high frequency (UHF) RFIDs sector, for example, the largest market by both tag volume and market value is retail apparel and footwear tagging – this market rebounded in the second half of 2020 and has continued to grow strongly since.

Leading players are looking to bring this success to other business sectors, with the three most frequently named industries by companies in the IDTechEx interviews being a) retail beyond apparel and footwear, b) food, excluding the quick-service restaurant business, and c) supply chain and logistics.

For high-frequency/near field communication (HF/NFC), contactless payment is still the dominant sector and will continue to be so in the mid- to long-term. In the long run, the largest market identified by IDTechEx in the HF/NFC sector encompasses NFC applications beyond payments using flexible integrated circuits (ICs).

Even though the HF/NFC beyond payments sector is expanding, most applications in this sector are still relatively low-volume deployments across numerous projects, such as Bluetooth pairing, gaming, and information posters.

Smart packaging is thought to be the application with the highest volume opportunity in this sector. However, the high cost of rigid ICs and lack of unique business cases are the two bottlenecks hindering strong growth.

Despite the RFID industry rebounding in 2021, IDTechEx forecasts that the worldwide chip shortage challenge will persist into 2022 and possibly even 2023. Initially, the chip shortage crisis had little effect on the RFID industry because many companies had stockpiled in anticipation of this crisis. This has aided larger RFID companies in meeting consumer demands, but as of Q4 of 2021 the supply has started to dwindle, which has impacted pricing.

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