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    Breaking News

    IDTechEx Releases Report on China’s RFID Market

    The average lifetime of a small RFID company is 2.5 years, and less than 20 major RFID companies from 2004 survive today.

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    07.17.15
    IDTechEx has released its newest research report, “RFID in China 2015-2025: Forecasts, Players, Opportunities.”
     
    The study reveals differences in Chinese RFID. In car manufacturing, the government-backed companies are mainly struggling, as manufacturers with large foreign shareholdings have superior technology and are prospering. With RFID, the government-backed companies have experienced success while others have struggled. In addition, there is little foreign participation.
     
    The average lifetime of a small RFID company is 2.5 years, and less than 20 major RFID companies from 2004 survive today. Over half the major RFID companies that started in 2009-2010 are bankrupt.
     
    Most government-led RFID companies are state-owned. They focus on the Chinese market, have a large amount of capital and get more opportunities, enjoying high profit margins because the government projects are less price-sensitive. Government-led projects are usually involved, such as the national ID cards (the world’s largest RFID order ever), passports and subway ticketing. The entry barrier is high, as suppliers must have good government connections and mature technologies.
     
    AISINO, Shanghai China Card, CEC Huada Electronic Design focus on government projects. Large state-owned RFID companies typically enjoy high profits. The resident card costs more than CN¥ 3 (US$0.5). The average price of an RFID card is below CN¥ 1 (US$0.16) yet transit cards, used as the city cards, cost only CN¥ 6-7 (US$1-1.1) but are sold at CN¥ 15-25 (US$2.4-4.1).
     
    In contrast, companies like Invengo, Arizon RFID, Hangzhou Century have less government influence and are more market-oriented, especially in the tag-assembly sector. Exporting often dominates, especially UHF tags sold on price. Small RFID companies face fierce competition, especially in tag assembly. Selling prices of RFID cards/tags decline inexorably, so companies move up or down the value chain to try to survive.
     
    “Previously, most RFID companies partnered with system-integration companies,” explains Xiaoxi, project leader for the new IDTechEx report. “RFID companies provided hardware such as readers, antennas and/or tags/cards, while the system-integration companies submitted tenders. They shared the profit margins together. However, the continuously declining prices lead to tiny or even zero profit.”
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