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According to a new RFID sector survey by IDTechEx Research, the RFID market will increase from $6,98-billion in 2012 to $7,88-billion this year, and will reach $23,4-billion in 2020, says Raghu Das, CEO, IDTechEx.
This includes tags, readers and software/services for RFID cards, labels, fobs and all other form factors – for both passive and active RFID. The market for RFID has grown steadily despite the economic meltdown due to the diverse nature of its applications from tagging retail apparel to transport ticketing to animals.

Historically and today, Governments have driven most RFID orders as they improve efficiency (transit systems), safety (passport tagging) and protect industries (animal tagging). Since 2000 there has been a strong push to use passive RFID to improve supply chain visibility, with a wide range of investment in new RFID technologies, new standards and much publicity.

Inevitably as with most new technologies, aspects were over hyped and demand not in sync with capacity, but as we entered 2010 the industry emerged from the hype cycle and over the following years until now, has entered a period of rapid growth and profitability for some.

There are different rates of growth for different applications and many challenges – and opportunities still exist. In total, IDTechEx find that 5,9-billion tags will be sold in 2013 versus 4,8-billion in 2012.

The last five years has seen consolidation throughout the value chain in passive UHF RFID with some companies emerging in true phoenix-from-ashes style. This is mainly driven by one application – retail apparel – which will globally demand 2,25-billion RFID labels in 2013.

Some suppliers are now profitable and see rapid growth ahead. As in most emerging technology, there will be blips along the way – such as the current UHF RFID litigation, but we do not believe this is a show stopper – no-one makes money then. After apparel tagging, passive UHF is deployed in many different application areas for asset tracking and other applications.

These are small volumes in their own right but add up to hundreds of-millions of tags per year given the strong payback they give users. IDTechEx Research expects 3,1-billion passive UHF RFID tags to be sold in 2013.

However, despite passive UHF selling more tags than passive HF for the first time in 2012, IDTechEx Research finds that the money spent on passive UHF tags will be $247-million, versus $2,15-billion on HF and $713-million on LF RFID.

The higher value of HF and LF is due to a variety of RFID tags in high value applications including animal tagging, contactless smart cards and passports. Indeed, the size of the market of HF tags will continue to be larger than the UHF tag market over the next decade, by money but not volume.

Those in HF and LF tend to be relatively large, profitable enterprises, some of whom are moving into the high growth but as yet lower value passive UHF market.

In a business approaching $8-billion this year, one could expect a one-billion dollar leader but we could not find a player clocking half that figure.

Of the 800 or so suppliers, IDTechEx only count eight with revenues more than $100-million, and less than 20 with sales between $20-million to $100-million. Most, but not all, in the top eight provide complete solutions, which is still where most of the big money goes, with the others being dominant in their part of the supply value chain for a particular technology type.