According to Analysys International’s latest “IT Product and Service: Chinese RFID Market Data Monitor for Second Quarter 2005″, the Chinese RFID market reached RMB 226 million in the second quarter 2005, more than twice as much as the same time last year, displaying a rapid growth in Chinese RFID market. The chart shows the share of RFID applications in different sectors:


Analysys International believes that the government plays an important role in driving the development of Chinese RFID market. Government related applications account for the largest share in the RFID application fields. The nationwide launch of second-generation ID cards is the most important reason for this year’s rapid growth. Second-generation ID cards and related products share 38% of the total market. In addition RFID technology reached a good momentum in fields where it is already applied on a large scale, such as public transportation, campus management, property/residential area management etc.

Meanwhile, structural change in application fields also modifies percentage of RFID products in each frequency band, among which the high frequency products, represented by 13.56M for the second generation ID cards, increased largely by this amount. While low frequency products, comparatively more mature in application, keep a relatively stable growth. The ultra-high frequency products, quite small in terms of percentage, are adopted for application gradually, based on advancements in high speed and long distance recognition.

Analysys International predicts that Chinese RFID market, pushed by the further rounds of issuing the second generation ID cards and the needs caused by seasonal events such as new students enrollment in high schools etc., will continue to grow sharply in the third quarter.

At a time when RFID is beginning to be widely applied, Analysys International finds that the domestic RFID development is still restricted by many factors, including sustained high costs, lack of a unified standard, immature supply chain and supporting links among others. All these problems are still unsolved, which creates a large bottleneck for large-scale acceptance of RFID.