By Jo Best
Wednesday, February 08 2006 11:12 AM
URL: http://www.zdnetasia.com/news/communications/0,39044192,39310531,00.htm

The RFID (radio frequency identification) tag as we know it is changing, thanks to the intervention of two chip-makers.

Philips has revealed its first fully functioning RFID chip to do away with silicon elements. The tag, revealed Tuesday by the company's research division, will use 'plastic electronics'.

Ditching silicon in favour of a plastic base, according to the chip-maker, could potentially mean a price cut for the tags.

Hitachi has also been working on giving RFID chips a makeover. The manufacturer has unveiled what it is claiming is the tiniest tag on the market.

The chip, 0.15mm squared and 5.5 micrometres in thickness, is several times smaller than a grain of salt. This tiniest of chips could also have potential cost implications for RFID--the smaller a chip, the greater the economies of scale in regards to manufacturing.

The cost of tags has been cited as one of the main reasons holding back mainstream--and particularly item-level--adoption of RFID. Typically, an RFID tag costs up to 40 cents.

Analysts believe that price will have to fall to around 5 cents before RFID will really become a tech must-have.

Jo Best of Silicon.com reported from London.