ePassports and smart cards to boost RFID revenue

The rapidly growing RFID tag market is set to achieve a total market value of US$26.23 billion by 2016, according to a new study by research and consultancy firm IDTechEx.

The study – RFID Forecasts, Players and Opportunities 2006-2016 – reveals that although the lion’s share of RFID shipments, in terms of volume produced, will be for high volume items such as post, drugs, pallets, cases, tyres and consumer goods, a disproportionate percentage of revenue will be achieved through RFID deployments in the ePassport and smart card* markets.

“On average, the value of chips used in ePassports is US$3 per passport because they need to be secure and physically robust,” Raghu Das, CEO, IDTechEx told SDW. “This equates to revenue of US$13 million in 2006 and US$120 million in 2010 for tags used in passports alone.”

IDTechEX forecasts that RFID technology for ePassport applications will see strong growth over the coming years. In 2005, it estimates that 4 million tags were deployed to this market. In 2006, a further 10 million will be shipped and, in 2008, 40 million will be distributed for ePassports worldwide. In 2006, it also anticipates that 285 million RFID tags will be shipped for smart cards. These increasing shipment figures could translate into US$765 million for smart cards in 2010 and US$120 million for ePassports, out of a total RFID tag market revenue of US$12.35 billion in 2010.

According to the company: “The market for chips in the ePassport/ID markets is being driven by legislation worldwide (such as US laws for visa-waiver countries). Work on China’s national ID card is also driving contactless deployments, with 1 billion being delivered.”

However, the researchers say that there is unlikely to be major adoptions of chips in ePassports for the next year or so because problems associated with security and the possibility of terrorists being able to read information stored on the ePassport chip still need to be ironed out.

“By 2016, the RFID chips used in ePassports and smart cards will cost around US$1.5 per unit because you still need sophisticated, secure chips able to store biometric information, in contrast to RFID labels costing a few cents of less,” says Raghu Das.

 

*In this survey, smart card means RFID smart cards used for national ID, transportation and secure access markets.