RFID: This technology will make silver indispensable for industry

--> The RFID technology is about to experience a big change in the silver sector

Description of RFID technology

The by far most interesting range of application for silver in the future will probably be the Radio Frequency Identification, because this technology will change society, compared to what internet and cell phones did that caused changes in society as new products then.
But what is RFID system exactly all about?
A RFID system consists of two major components.
On the one side, there’s a very small radio chip – also called tag or transponder – and on the other side, you’ll find a reading device.
The radio tag consists of a mini- antenna and an electronics component to save data on it. The reading device consists of an antenna and a decoder.
The reader emits radio waves which produce a high frequency alternation electromagnetic field.
However, the operating range depends on power supply and on frequency.
As soon as a radio chip enters an electromagnetic field, this tag will activate and send out information to the reader.

That one reads out the information and transmits the data to a central processor where the info gets processed.

RFID revolutionizes retail industry

Wal-Mart as the world’s largest retailer has already managed to convince one hundred of its most important subcontractors to equip their products with radio tags.
This opens up the possibility to track down goods from earliest production, passing through distributors, till finally arriving at Wal-Mart good shelves, now ready for sale.
Up till now, the company had to spend an amount of 25 billion US dollars for the control system of supplier chains and for management of flow of goods.
In return, the retail giant is going to save 7 percent of all expenses by upgrading to RFID tags – in figures 1.76 billion US dollars.
It will still take some time, of course, till all companies will have equipped their devices with radio chips. Wal-Mart, however, is not left alone with the task of distributing RFID, other giants of the retail business stand aside – Metro and Tesco for example. In addition to the installation of the reading devices, true worldwide product standards must be met. The association EPCglobal union developed the Electronic Product Code (EPC). The code (a number) consists of three data groups which allow exactly identifying and registering every single product in the world.

This Electronic Product Code will sooner or later replace the Universal Product Code (UPC barcode).
The EPC expands the accuracy of labeling by exactly marking single articles with a serial number, instead of putting the same code on all cereal boxes of the same kind and the same producer.
Till summer of 2005, the few American and European radio tags in use sent out very different wave lengths. However, this has profoundly changed because the EPCglobal union succeeded in pushing through worldwide global standards.
Furthermore, the radio chips have only been affixed to pallets and that again by just a few companies.
Fact is that radio tags not only save billions of dollars to companies on logistics levels, but furthermore protect products of theft and piracy. Thus, management in big companies calls for large-scale application of it in mass markets.  A distribution from pure pallets to cardboard boxes has already been done with great success.
The price of an RFID tag dropped subsequently to a level that the price-performance ratio finally matches. 
With the introduction of RFID in the salesrooms of big retailers, the whole market and consequently also the logistics sector will be affected by a gigantic reorganization.
The use of RFID in the clothing industry is of special interest either.
As the first enterprise worldwide Lemmi Fashion, producer of fashion for kids, equipped the entire logistics chain with RFID technology and so realized a far-reaching merchandise management (Microsoft Business Solutions). Levi Strauss&Co., maker of famous casual wear, began to provide their jeans with RFID tags. Compared to the barcode, RFID radio tags make exact identity classification of a single product possible.
The future in our supermarket will probably look like this: at the end of your purchase you will produce your charge or store card and then get registered by a card reader upon leaving the store. Only seconds later the amount due of your purchase will automatically be debited to your bank or credit account. There will be no cashiers anymore as soon as this technology works to full satisfaction.You, as a valued customer of the store won’t have to worry anymore about long lines at cash desks.

And what has RFID got to do with silver now?

Well, RFID tags basically consist of silver! Thereby, a very thin silver foil is used as a high-performance receiver. As already mentioned earlier in the text this technology looks like to replace the conventional barcode. This will mean that the demand for such a tag will get bigger and bigger and consequently lead to a rising price for silver in the long-term.

The presumably biggest application field for RFID which is the retail trade and the logistics sector has already been mentioned in the paragraph above.
In the following passage you’ll find further possible use where RFID chips can be applied, briefly summed up in a few key points:

- The US Department of State has issued a binding ruling that all new American passports must have a RFID chip on it. That explicitly also applies to passports up for renewal.

- Car makers plan to integrate RFID tags in car components, like navigation systems or anti-theft devices.

- In tomorrow’s library every single book will be equipped with a smart-label for identification purposes.

- Full registration of waste bins to individual properties and the full database for monitoring and weighting waste disposal due to RFID as already done in certain parts of the UK.

-The technology is supposed to be used soon for non-contact admission control for high-security labs or similar.

-The US Department of Homeland Security lately started to use RFID technology at five border controls with neighboring Mexico and Canada.

-The US Department of Defense made it obligatory since mid’ 2005 for 100 of its most important subcontractors to put on RFID tags on all its packages and pallets.

- RFID chips have been introduced in a private elementary school in Tokyo, Japan. Students attending this school wear tags on their school bags for registering upon arrival at the compound.

- In November 2004, the American Department of Health or CDC approved the application of “VeriChips” in humans. The transponder of the American company “Applied Digital Solution” is transplanted under the skin. The company advocates these chips for health reason since vital information of the bearer is easily available in case of emergency.

Which quantity of chips will be produced?

In 2007, 3 to 3.5 billion RFID tags are sought to be manufactured. Furthermore the industry expects an increase of up to 8 to 8.5 billions of manufactured labels in 2008. And let’s look ahead! In 2015, 500 to 600 billions of manufactured RFID tags are expected to be produced.

Well, RFID will certainly change our life, won’t it?
Another aspect with immense importance for investors in the silver sector: Once used in producing a radio chip, silver can not be reused or recycled. It is irrevocably lost.This will mean that the demand for silver will rise, while the stock on hand will decrease quickly and heavily.

You can imagine what that will mean for the price of silver!

Finally, let me add some critical words about this new emerging technology:

- due to the rapid spread of RFID, the danger of even more electro smog will increase.
- discarded RFID tags is hazardous waste.
- fear of too much screening and supervision is only but justified (look at implanted chips in humans– now traceable at all times and everywhere)

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