Omron Plans Big Boost to RFID Manufacturing

Japan’s Omron plans to more than double its production capacity of radio frequency identification (RFID) inlays within the coming months, it said Tuesday.

The company can currently produce up to 100 million RFID inlays per year but will expand to 250 million inlays by the end of June, said James Seddon, a spokesman for Omron in Tokyo. Later in the year, the company will examine market demand and, based on its findings, could expand production capacity further to 350 million inlays per year by this time next year, he said.

An inlay is the combination of a chip and antenna. The inlays are typically produced on rolls and supplied to companies that package them for use, for example, as stick-on labels.

Expansion of its production comes as the company is in the middle of a two-year US$20 million program to expand its RFID business and increase its U.S. and worldwide market share.

The program comes as Wal-Mart Stores, the world’s largest retailer, is pushing out its own RFID initiative that already has its top 100 suppliers attaching RFID tags to shipping crates and pallets destined for the retailer. Wal-Mart will expand this to cover its next 200 largest suppliers during this year.

The RFID market is in for explosive growth over the next five years, according to a recent report by Reed Elsevier’s In-Stat. The market research company estimated more than 1.3 billion tags were produced in 2005 and that this would rise to 33 billion by 2010. By far the biggest market segment will be supply-chain management, especially with Wal-Mart’s RFID push, In-Stat said in January.

-Martyn Williams, IDG News Service

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