South Korean RFID Vendors See Enormous Global Opportunities

ABI Research has found that a number of South Korean RFID tag and reader vendors, middleware vendors and system integration service providers have boosted their production capacities in the last year.

South Korean vendors began RFID development more slowly than their global rivals, but they believe that they can still enjoy significant opportunities in the international marketplace, especially in the UHF segment, according to ABI Research.

ABI Research analyst Andy Bae reports that a number of tag and reader vendors, as well as middleware and system integration service providers, have boosted their investments in R&D activities and mass production capacities since 2005. Also, technology transfer through collaborative R&D projects with Korean government-owned institutes will play a pivotal role in enhancing vendors' capabilities.

South Korean flag"The South Korean RFID market landscape is gradually changing because the large South Korean players — mainly conglomerate companies such as Samsung Electronics and LS Industrial Systems — are expanding their mass production capacity," says Bae.

"Global competition is lowering tag prices," he adds, "and South Korean manufacturers will continue to build on this trend and offer very competitive prices."

The South Korean government's initiative for technology development and national-scale RFID trial services has played a pivotal role in increasing RFID adoption. A number of individual South Korean enterprises began to introduce RFID in 2005, and their interest continues to grow.

Currently, RFID projects in South Korea have been deployed in the following markets: logistics, retail, publishing and library services, healthcare, manufacturing operations, education, government and public services, consumer goods, defense, shipping and transport, and livestock. Of these, tracking for logistics and RFID-based libraries demonstrate the highest adoption rates.

"In 2005 the HF tag segment, accounting for more than 60% of the market, led growth," Bae notes. "But from 2006, as more private companies adopt RFID, UHF and microwave will drive the market."

The Korean government's Feb. 8 announcement of a "u-IT 839" policy, which added RFID into a new growth engine by revising the current IT 839 program, will have a strong impact on the South Korean RFID market. This is a truly significant announcement for RFID, because the technology is closely involved with the entire "U Korea" ubiquitous sensor network project.

South Korean vendors are also working with the government and with each other in an official organization that will focus on cross-sharing patents and preparing to debate with global players through analyzing patents pools.

A new ABI Research study, "RFID Markets in South Korea," identifies the issues — standards, process changes, privacy concerns and more — that are critical to the growth of the Korean RFID market. Shipments and revenues for tags and readers, as well as middleware and integration services, are forecast through 2012.

For more information, visit www.abiresearch.com or call (516) 624-2500.

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