The Development of China’s RFID Industry

To interpret the current and future trends of RFID development in China, the data was further analyzed. The first cluster, RFID concepts and applications, contains the fundamental RFID technologies, including the concepts of developing a tag and the interaction system. Some basic functions of RFID, such as security and distribution are also included in this cluster. The patents in this cluster provide innovations for providing improvements such as the modification to RFID tags and security system to increase the safety in using RFID tags. One purpose of this case study is to determine if there are RFID technology gaps that can be exploited for further R&D. From the technology life cycle analysis (Table 15), the first cluster appears to be in the maturity stage and the number of patent applications is forecasted to reach its upper limit (279) in 2018.

The second cluster, wireless communication devices, introduces techniques for tag identification and includes RFID wireless transmission technologies. Communication devices are the main focus of this cluster and many patents describe the wireless signal transmission technologies, and the communication of different kinds of messages. For example, there is a patent in this cluster which utilizes an RFID tag in an IC card to automatically send messages to other electronic devices. The life cycle analysis shows the second cluster to be in the saturation stage with a predicted 90% share of upper limit to be reached in the year 2013. This cluster is the only cluster in the saturation stage.

Cluster number 3, RFID architecture, contains key phrases like “reader,”

“protocol,” “processor” and “standard” and these terms describe the essential architecture of RFID. The patents in this cluster focus on how to improve the functions of RFID readers or protocols and increase the efficiency of RFID operations. For

example, a patent in this cluster describes a method and protocol to communicate between different RFID readers and simultaneously transmit data. The ability to strengthen the processors for RFID readers is also mentioned in this cluster. As shown in Table 15, the current share of RFID patent applications is at 78%, which means this cluster has entered the mature stage and will reach an upper limit (90 applications) in 2016.

The fourth cluster contains patents relating to frequency bands and waves.

Frequency bands and waves are the means by which RFID systems transmit data.

Different waveforms use different transmission methods and carry different amounts of data with different efficiencies. Therefore, methods to improve wave patterns are a crucial R&D direction. Noting that this cluster has the fewest patent applications and a continuing growth rate shown in Figure 11, there is good potential for the development of related technology. As shown in Table 15, this cluster has only reached 66% of its upper limit and the life cycle is in the early part of the mature stage. Therefore, inventors and investors should analyze potential opportunities in this cluster.

The fifth cluster represents the implementation and applications of RFID related technologies used for tracking. There are more patents in this cluster (686) than any other cluster. The technologies developed within this cluster contain technologies needed in monitoring and tracking of inventories, people and animal. The patented technologies in this cluster define how RFID technology can be implemented in the public transportation system, mobile phones, community security systems and animal tracking systems. This cluster includes patents from the earliest application period (i.e.

1995), is in the mature stage, and is forecasted to reach its upper limit in 2021 (Table 15).

Finally, cluster number 6, RFID transmission apparatus, defines the framework and

architecture for RFID transmission apparatus and systems. Most patents in this cluster are related to the antenna, circuits and connectors which improve the functions of RFID.

Some device innovations for data transmission and the activation range are introduced in this cluster. As shown in Table 15, the sixth cluster has entered the mature stage of the technology life cycle with 80% share of its upper limit. This cluster is predicted to reach saturation in the year 2018.

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Cumulative RFID patents

Cluster 6 RFID Transmission Apparatus Cluster 5 RFID Tracking Implementation

Cluster 1 RFID Concepts and Application Cluster 2 Wireless Communication Device

Cluster 3 RFID Architecture Cluster 4 Frequency and Wave

Figure 11 China RFID patents application and cumulative patent number

In summary, the results show that RFID wireless communication devices have entered the saturation stage and the technology in this cluster is mature with little room for development. Four clusters: RFID concepts and applications, RFID architecture, RFID tracking implementation, and RFID transmission apparatus, have also entered the maturity stage. One clusters, RFID frequency and waves is still in the early growth stage with the most potential for further development. The RFID operating frequencies are generally organized into four main frequency bands including low frequency (LF), high frequency (HF), ultra high frequency (UHF) and microwave (Ward & Kranenburg, 2006). Higher frequencies cover longer ranges and have higher data transfer rates and offer better security. RFID can be further applied in tracking and managing living things (e.g., medical care) and there is a growing need for RFID systems that can better utilize high frequency bands for communication.

Patent management strategy should be planned according to the technology life cycle (Liu, 2000). Therefore, for those RFID manufacturers in RFID frequency and waves area, modifying the core technology and searching for more applications is a critical objective for them. For those in RFID wireless communication devices subarea, they should not to invest in this area and start to create a new technology to replace the old technology, and the old technology patents can be resold or licensed as needed. As for the RFID manufacturers in other four subareas, since they are in the maturity stage, patent applicants should avoid invading other’s patent intellectual property and innovators should seek the cooperation of the other applicants (i.e. formation of alliances).

Based on the forecasting model used in this case study and given the rate of applications filed in China, it appears that the China RFID patent applications will reach an upper limit of 1734 in the year 2020. Although there will likely be another ten years

of growth and innovation, each subarea does not have the same potential for development. Using the patent clustering and forecasting methods, the most promising niche to invest in appears to be the improvement of the RFID frequencies and waves, a technology development area that will yield more reliable RFID systems and applications.