SINGAPORE: A*STAR's Institute of Microelectronics has developed a silicon microchip set to open up new markets for sensors in the radio frequency identification market.

The costs of producing such RFID readers and their tags have been prohibitive, leading to slow adoption of the technology.

But the institute, together with its industry partner SMART ID, are aiming commercialise their reader prototype.

This integrated circuit reader market is expected to grow at an average annual rate of 130 percent to US$1 billion by 2009.

A radio frequency identification or RFID reader can track in real time the movement of goods from factory floor to retail store shelf.

It can also store or send that data directly to a company's information technology system – making stock checks and consumer research much quicker and more precise.

And now Singapore engineers say they have created a prototype that is smaller and cheaper to produce.

Rajinder Singh, Head, Integrated Circuits & Systems Lab, Institute of Microelectronics, A*STAR, said: "By integrating many sensitive components all onto one chip, the size became very small. And because of integration, the cost has also come down, so new applications will become possible in the consumer area. That will generate higher volume, which should also reduce cost in future."

Industry players say existing readers are now made up of about 600 component parts and can cost over US$1,000 to produce.

Engineers at the institute say they are able to lower the production costs to just under S$100 by keeping it to about 50 parts on a name card size reader.

However, costly tags allowing such readers to perform their magic are still keeping industry players at bay.

But RFID proponents say as tag prices come down, industries will be looking at cheaper, portable readers.

Ang Chip Hong, Technology Director, SMART ID Technology, said: "The cost of RFID tags is still very important. The cost definitely must come down. And the next thing after tag costs will be the reader cost. Compact, low-cost reader is very useful in a retail store."

The institute is now improving on the chip design based on industry feedback and operational needs.

The revised version is expected to come out as early as March.

SMART ID says it is now in talks with logistics players seeking handheld readers to manage their goods.

Both partners are also looking to tweak the chip for mass production in global markets such as Europe, the U.S. and Japan. – CNA/so