The Market Momentum in RFID

RFID proves itself to be a resilient industry during COVID-19. According to the IDTechEx market research report "RFID Forecasts, Players and Opportunities 2022-2032", COVID-19 has impacted the whole RFID business in 2020 – especially those that require physical on-site work. However, the market rebounds very well since 2021.

For UHF RFID business in retail apparel and footwear tagging – the largest UHF RFID market by tag volume as well as market value, the market rebounded since the second half of 2020 and it continues to grow strongly since. Several leading UHF RFID tag suppliers told IDTechEx that they expect this trend to continue for the foreseeable future, as more businesses will be in need to improve their inventory accuracy and business processes. UHF RFID in the retail apparel and footwear tagging business proves itself to be very successful, leading players are looking into bringing this success to other business sectors. Retail beyond apparel and footwear, food (ex: quick-service restaurant business), and supply chain & logistics are the three industries named most frequently by the companies IDTechEx interviewed.

IDTechEx expects to see the retail sector in the UHF market continue to grow and dominate, with the retail apparel and footwear sector being the most dominant growth driver. Other industries, such as supply chain and logistics, are expected to expand in the coming years.

For HF/NFC business, contactless payment is still the dominant sector and will continue to be so in the mid-long term. In the long run, the largest market in the HF/NFC sector identified by IDTechEx is the NFC applications beyond payments using flexible ICs. Currently, even though the HF/NFC beyond the payments sector is expanding, most applications in this sector are still relatively low volume deployments across numerous projects, such as Bluetooth pairing, gaming, information posters, and so on. Smart packaging is thought to be the application with the highest volume opportunity in this sector. However, the high cost of rigid ICs and lack of unique business cases are the two bottlenecks that hinder the strong growth. New technologies, such as flexible integrated circuits may help to drive the price down in the longer term. IDTechEx continues to monitor the R&D development as well as the scaling opportunities of the company (PragmatIC) that is developing this technology (PragmatIC full detailed company profile is included in IDTechEx's RFID market research report).

Despite the RFID industry is returning to growth since 2021, IDTechEx forecasts that the worldwide chip shortage challenge will persist into 2022 and possibly 2023. Initially, Initially, the chip shortage crisis had little effect on the RFID industry. Many companies had stockpiled in anticipation of this crisis, which has aided larger RFID companies in meeting consumer demands. However, as of Q4 2021, what the companies have experienced in some cases is that supply can fall short, and they have had to adjust their pricing to reflect this.