RFID Tag Cost Breakdown and Analysis

There is currently a huge wave of RFID adoption going on in fashion and apparel retail. This growth is largely based on the need for accurate stock data, while at the same time the cost for deploying RFID has significantly decreased.

In this article, we’ll provide some guidelines on costs and point out the improvement space of the cost in the future industry.

1. Tags

Passive tags generally range from 20 cents for the simplest license plate tag to several dollars for a transponder embedded in a key fob or plastic housing, to protect the tag from heat, cold or chemicals. However, regular passive RFID tags won’t perform appropriately on a metal object.

Active tags range from $10 to $50 or more. The cost depends on the size of the battery included, the amount of memory on the microchip and the packaging around the transponder.

2. Is there any more improvement to be expected or has the bottom been reached?

To answer this question, we need to understand how the price of an RFID tag is currently set up. The price of an RFID tag consists of the following core components:

2.1 The antenna

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The traditional copper etching is a commercialised manufacturing technology to produce RFID tag antennas, causing as much as 70% of copper waste.

Inkjet printing causes NO WASTE, which is a promising RFID antenna manufacturing process that produces RFID antennas with equal or better performance as those by copper etching.

Newer manufacturing methods lead to less waste and less material required, leading to lower cost.

2.2 The RFID chip

The price of the chip is heavily related to size of the chip. More advanced production technologies like direct-die-attach allow smaller chips, and additional savings can be expected in reducing the memory footprint of those chips.

2.3 Attaching the chip on the antenna

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Throughput in flip-chip manufacturing, for example, is very dependent on the time it takes to cure the polymers involved. Reducing this time greatly reduces the cost of operation of flip-chip. New antenna creation methods that can be ‘in-line’ with the chip attachment process allow for higher throughput, and lower per-unit cost.

2.4 Margin for all the companies involved in the process

Integrating the antenna production with the chip-attach in one machine and facility simplifies the supply chain.

Finally…

Keep in mind that every company’s needs—and every application—are different, so costs will vary widely from implementation to implementation.

Note: We do not own the images used in this post. Feel free to contact us if they belong to you, and we’ll take them down as quickly as we possibly can.

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