RFID Transponders Approach The $1B Mark

Natick, MA—According to a report from Venture Development Corp. (www.vdc-corp.com), the global market for RFID transponders approached $1 billion in 2006 and is expected to grow at a compound annual growth rate (CAGR) of 24 percent through 2008 (see figure). Transponder revenue distribution was relatively uniform among the regional markets—EMEA accounted for slightly more than 35 percent of total revenues and the remaining market was, for the most part, equally divided between the Americas and Asia-Pacific regions. However, this revenue distribution is not expected to continue. Over the next three to five years, transponder revenues within the Americas and Asia-Pacific are anticipated to outpace those within the EMEA region.

More than 1.2 billion RFID transponders were shipped in 2006, a figure expected to nearly double by 2008. Unit shipment distribution was drastically different than the revenue splits, with the Asia-Pacific region accounting for approximately 40 percent of total transponder shipments. The reason behind the differences in the unit and revenue distribution lies in the types of transponders being used within each region. For example, the Asia-Pacific region primarily consumed lower-priced HF and LF transponders, while the EMEA region used more expensive smartcards. As source tagging within the Asia-Pacific region becomes more pervasive, the use of lower-priced tags within the region is expected to explode. This trend has led VDC to predict that the Asia-Pacific region will account for nearly 50 percent of all transponder unit shipments by 2008.