Revenue generated by domestic RFIDrelated corporations grew from 54.1 billion won (US$56.9 million) in 2003 to 290.2 billion won (US$304 million) in 2005, according to the Korea Association of RFID/USN.
Despite the growth of such RFID/USN industry applications, the majority of RFID introduction corporations spent no more than 500 million won (US$474,000) on their introduction expenses. On the whole, domestic corporations are remaining a pilot program level.
Moreover, the burden of changing existing bar code infrastructure and the high price of pre-investment in an new technology are acting as a stumbling blocks. By creating successful examples that illustrate the entire implementation process and lowering tag production costs, fullscale introduction and application throughout industries will be able to occur.
RFID industry has high-speed growth
RFID/USN contains unlimited growth potential as a core infrastructure technology to actualize a Ubiquitous society. It is also a field which can bring about a huge change to industry as a whole. No other technology has had such an impact since the develompent of the Internet.
Recognizing the importance of RFID/USN technology, our country is also unfolding a set of activities following the government's proactive IT839 policy. Large-sized corporations are also investing significant amounts of money into R&D.
However, demand activation for the creation of domestic markets and a ground of exchange with overseas corporations for inroads into the global market are short, according to experts in the RFID/USN field.
By holding more enlarged international exhibitions as well as conferences this year, the Korea Association of RFID/USN intends to create a domestic RFID/USN market. It hopes to increase user recognition and to further increase domestic technology use. It also hopes to aid overseas market acceptance through this global exchange opportunity.
To make the day come sooner in which our country's RFID/USN industry can display its powerful competitiveness in the world market, Kim Shin-bae, president of SK Telecom and chairman of the RFID/USN Korea 2006 Organizing Committee stresses: "The Committee came to host RFID/USN Korea 2006 International Exhibition and Conference to actualize related enterprise's business activation, technology competitiveness boost, realistic business model presentation, and a ground of information exchange about new technology."
RFID/USN market share in the future
In a nutshell, RFID is a technology in which tags on products that contain a large volume of information can be read by various tag reading equipment.
RFID's global market scale last year reached approximately 500 billion won (US$530 million). The RFID market is forecast to grow to a 10 trillion won (US$10.5 billion) industry in 2010, according to market survey institutions such as Gartner and IDC. That is an expected trend of 37% growth each year.
Logistics management and circulation are the fields where RFID has rooted foremost. Wal-mart, the largest retail company in the world, uses RFID for the purpose of stock management. At home too, Shinsegye department store, E-mart, and Lotte-mart are utilizing RFID for logistics management.
Furthermore, the movement to commercialize RFID by connecting the technology to a high-speed Internet or mobile communication network is coming along at home. Since a cellular phone model embedded with an RFID reader is slated to be marketed soon, the RFID industry is expected to be first activated in Korea ahead of other countries.
Mobile RFID in which portable readers and wireless Internet are combined can breach the current boundary to information that a tag holds.
The government decided to possess 7% of the global RFID/USN market by 2010. It also set a goal for 5 cent tag commercialization, an important point for the economic feasibility of RFID popularization.
RFID feasibility exerts a considerable influence in making a Ubiquitous society sooner. This is the government's full-scale project to be commenced this year, and also the incentive for mobile communication business providers to provide commercial mobile RFID service.
International cooperation necessary
To boost Korea Ubiquitous industry market share from current 2% up to 7% within the world market, the government is drawing up a technology road map including a 5 cent tag development scheme by 2010.
The government is obligating the Public Procurement Service (PPS) to preferentially buy goods with RFID attachments in order to create RFID demand. The Ministry of Environment is requiring that hospitals begin to use RFID tags for contagious waste for the same reason.
The PPS obligation is expected to force 150,000 suppliers to adopt RFID tags, while the MOE requirement is expected to create a demand for 18 million tags with its legislative efforts. In addition to this, RFID is anticipated to be applied to the Ministry of National Defense goods' management as well.
If this full-scale RFID project is completed, it will create a 30 million tag demand in 2007 alone. So experts anticipate that the current tag price of 150 won (US$0.16) will decline to 100 won (US$0.11) and is further forecast to go down to 50 won (US$0.05) in 2010 given its technological development.
In the meantime, tag price has been the largest Achilles' heel for RFID adoption, but provided the government's full-scale project happens, volume demand will decrease prices.
To bolster the domestic RFID/USN industry, the government attached importance to demand activation, core technology development, u-IT cluster construction, and manpower nurturing.
In order for Korea to grow as a front runner of the RFID field, Deputy Minister Kim Won-sik, Ubiquitous Society Strategy Office, the Ministry of Information and Communication (MIC) underscored that full-scale dissemination on a private level is urgent. He added that it is important to continuously propel large-scale dissemination projects by unearthing promising fields with large ripple effects. It is also necessary to induce the decline of equipment prices or to present examples of large-scale success.
The deputy minister stressed also in a special exclusive interview with The Korea IT Times that international cooperation is necessary in terms of securing the core technology, standardization, and private exchange growth since RFID/USN is a new technology in its initial stages of global spread.
