Shanghai strengthens main hub status in RFID production

	This RFID card from Shanghai Boing is used for metro, conference and exhibition tickets, and parking access.

Strong support from the government and a comprehensive supply chain spur growth in China’s RFID industry.

Shanghai is one of the most important sourcing hubs for RFID devices in China next only to Guangdong province. Its share of total sales in 2010 is estimated at almost 35 percent, only slightly lower than Guangdong’s 40 to 45 percent. Manufacturers in Shanghai expect growth to surpass 30 percent in coming months, exceeding the national average of 15 to 20 percent, thanks to recovering economies worldwide and rising orders.

In the past few years, the city has attracted nearly 100 key players. The extensive supply chain constitutes chip designers, antenna makers, chip bonding and packaging companies, software development, systems integration and installation enterprises, and specialists in RFID tags, cards and readers.

Those concentrating on finished devices take advantage of abundant raw materials, EMS service providers, a modern transportation network and developed export platform. For example, card and tag manufacturers can purchase advanced flip-chip mounting equipment locally. With strong support industries and backing from the government, most RFID makers in Shanghai forecast a rosy outlook for the line in 2011. This is despite the challenges brought about by fierce competition overseas and in the local market. Many are boosting R&D efforts in the application of UHF band and microwave solutions to be on a par with international rivals.

	Shanghai China Card’s products employ flip-chip mounting, and LF, HF and UHF bands.

RFID tags, cards and readers comprise the largest line in Shanghai’s finished product sector. Some of the leading makers in this group are Shanghai Super Ele&Tec Co. Ltd, Shanghai China Card Group, Shanghai Huayuan Electronic Co. Ltd, C&C RFID, Mitsu Noki Digital, Zangtian and U-Card.

Shanghai Super Ele&Tec is a major provider of active 2.4GHz RFID tags and readers/writers. It concentrates on devices for transportation, logistics and supply chain applications. Shanghai China Card, a large supplier of RFID cards and tags, can churn out up to 50 to 250 million units per year. Its devices work on the HF and UHF bands, examples of which are the e-tickets used in the Shanghai World Expo and the second-generation ID cards adopted in the country. The company employs flip-chip mounting and can offer 0.5mm slim cards. The IC and RFID dual-interface card is another new model from Shanghai China Card.

Compared with counterparts from Guangdong, RFID products from Shanghai are usually priced higher due to the elevated labor, utility and rental costs. Most operations in the latter cater to large volume buyers and bank on upscale variants. They implement strict QC processes to ensure quality and command better quotes.

	The model CFN14113S2N RFID module from Shanghai Changfeng has 0.33 and 0.50mm thickness.

Suppliers of RFID devices in Shanghai are tapping the city’s strong chip design and manufacturing industry. The component determines performance, and accounts for about one-third of costs, particularly for tags, cards and readers. Most solutions produced are compatible with the HF band used for e-payment, e-ticketing, and transportation, asset management and access control.

Due to the high technology threshold for RFID chips, there are fewer than 10 designers in China. Shanghai is home to half of these, including Shanghai Quanray Electronics Co. Ltd, Shanghai Huahong and Shanghai Fudan. These makers provide mainstream HF and upscale UHF band solutions, some of which are patented. Products from industry leaders Shanghai Huahong and Shanghai Fudan are widely used in transportation, financial, e-pay and e-ticket applications. Chips from the latter were employed in the 2009 Special Olympics World Winter Games, while ICs from the first were adopted for e-tickets utilized in the Expo 2010 Shanghai China.

Shanghai Quanray, meanwhile, provides RFID chips that are compliant with EPC Global’s EPC C1 GEN2 standard. The company offers UHF and HF solutions for tags and readers targeted at supply chain management, logistics, anti-counterfeiting, e-ticketing and mobile e-commerce.

Most RFID IC specialists in Shanghai are fabless designers that subcontract manufacture to local semiconductor foundries to concentrate on chip development and sales. The city after all is the largest hub for semiconductor foundries in China with a 70 percent share of the country’s total output. Some of the leading enterprises in this line can be found in the area, including Taiwan Semiconductor, SMIC, Shanghai Huahong and Grace Semiconductor.

Local procurement shortens the time required for logistics, lessens costs and simplifies tax rebate procedures. For example, Shanghai Quanray and its chip subcontractor SMIC are based at the Shanghai Zhangjiang Hi-Tech Park, which facilitates communication and fast delivery of products. Further, R&D is conducted in partnership with local universities and institutions. Shanghai Huahong has set up a joint lab with the Shanghai Jiao Tong University, while Shanghai Fudan taps technical support from the Fudan University.

Besides the robust IC sector, RFID device manufacturers in Shanghai likewise take advantage of other strong support industries in the area. Shanghai Changfeng Smartcard Co. Ltd, for instance, focuses on modules. The company is one of the largest makers in this line in China with a capacity of up to 800 million units annually. Its solutions work on HF, UHF and LF bands. Changfeng’s patented technology can yield superslim models with 300μm thickness.

Shanghai Boing Information Technology Co. Ltd specializes in RFID inlay products, and can churn out 150 million units per year. It targets both HF and UHF, using various ICs based on buyers’ requirements. Flip-chip mounting enables the maker to design inlays for slim RFID cards and tags. It exports about half of output to Europe, North America and Southeast Asia.

There are also many enterprises specializing in software development and systems integration and installation in Shanghai, including Sontec and Refine Information. The last provides active and semiactive RFID systems for asset management, physical security and supply chain efficiency. Sontec targets the asset management, warehouse and logistics, industrial manufacturing, fashion and consumables, and food and drug administration sectors.

Government backing in the form of procurement and application policies, industrial park and demonstration center setup, and establishment of standards and organizations is spurring growth further. Shanghai is one of the first cities in China to adopt RFID technology. In 2001, the area released passports based on this standard for the APEC meeting. It has implemented the Uni-Card urban public transport project, which utilizes RFID cards for deposits and payments on buses, metro and light railways, taxis, ferries, highways, parks and gas stations. The government has released more than 20 million Uni-Cards and installed over 60,000 terminals. It is considering updating about 11 million social security cards.

Favorable policies and industrial clusters also play a key role in bolstering the line. The China government is in full support of RFID and ETC systems, and incorporates applications of the technology in the implementation of its Restructuring and Rejuvenation Program. RFID products are included in the 2009 Electronic Information Industry Development Fund Project Guide and Electronic Information Industry Progress and Investment Direction. The Internet of Things, which adopts RFID, was likewise listed as one of the top five emerging industries.

Shanghai’s local government is implementing policies to spur the industry as well. Since 2003, the Science and Technology Commission of Shanghai Municipality or STCSM has been subsidizing related product development efforts. To date, total investment has exceeded $25 million. In 2008, STCSM started the Innovation Clusters project, in which RFID was one of the priorities. At present, Shanghai makers are involved in about 30 R&D programs that are funded by the national or local government. These companies have acquired about 50 patents for UHF RFID products and antenna designs.

Industrial park and demonstration centers also aid in the strengthening of the RFID sector in Shanghai. In 2004, the Shanghai RFID Demonstrations Center was founded by SAP, STCSM, Auto ID Center and the Shanghai Jiao Tong University. It aims to promote different applications. The government has created industry standards and an organization to regulate the market and address concerns within the industry. In 2009, The Blue Book for China RFID Technical Development was published by the Ministry of Science and Technology. In 2005, the first Shanghai production and research alliance of RFID and Internet of Things was founded.

Shanghai Boing Information Technology Co. Ltd

Model: SheetInlay
MOQ: 1,000 units
Delivery: 7 days
Description: Customizable chip; flip-chip mounting; 13.56MHz, 868 to 915MHz operating frequencies; 50 to 100mm ISO 14443, 1 to 1.5m ISO 15693, 3 to 7m EPC Class 1 Gen2 operating distances

Shanghai Changfeng Smartcard Co. Ltd

Model: CFN3020FS82
MOQ: 100,000 units
Delivery: 14 days
Description: Dual chips; 1.65x1.65mm thick

Shanghai China Card Group

Model: Card
MOQ: 1,000 units
Delivery: 7 days
Description: PVC or PETG slim card below 0.5mm; flip-chip mounting; LF, HF, UHF bands; PVC, ABS, PET, PETG

Shanghai Huayuan Electronic Co. Ltd

Model: RFIDCard
MOQ: 1,000 units
Description: For public transportation, access control, event ticketing, gaming, identity and car park management systems; 1KB memory organized in 16 sectors with four blocks of 16 bytes each; up to 100mm operating distance; 13.56MHz operating frequency; 100,000 times write endurance