How Quanray got started
Hao's pedigree is ideal for heading a Chinese startup: He’s well connected with academia, here and in the U.S., as well as Silicon Valley and the Chinese government. He started as a professor at Fudan University, where he still teaches, then went on to direct China’s State Key Lab, a premiere research organization, from 1998 to 2005. He spent 2 ½ years in the U.S. as a visiting associate professor at Stanford University and started two companies while there. Back in China, Hao ran Shanghai Huahong Integrated Circuits Co., a government-funded IC design house that makes smart-card chips.
Hao helped launched Quanray in 2005 along with two friends and three Fudan University grad students. They pooled their own money – 1 million RMB in total – to fund the company while the three students agreed to work for low pay after graduating.
Armed with UHF and HF RFID hardware solutions, Quanray has been supplying chips in China and abroad. The UHF chips are used by a Japanese company for object tracking, while a European company is using Quanray’s HF chip for ticketing, Hao said.
Quanray’s notable design wins in China include supplying chips to China’s high-end liquor company, Wuliangye. A chip in the label of each bottle proves it authenticity, a classic anti-counterfeiting application.
Currently working on a second round of funding, Quanray is hoping to catch a break with its SIM card chips through its partnership with China Mobile. The carrier will begin trials this fall targeting 50,000 students on a campus in Sichuan province.
About 25,000 SIM cards integrated with RFID technology have already been issued, said Hao. Because the chips are relatively cheap, Quanray won’t see an instant revenue bump, but “this model can be duplicated” beyond the China Mobile trials, Hao insisted.
“When it comes to the production technology, we still have a distance to go, especially when we compare ourselves with the leading UHF chip suppliers," he added.
Indeed, Impinj and Alien Technology, the top two UHF RFID chip startups in the U.S., have yet to pull off successful IPOs (they both scrapped their plans in recent years), the odds for success at a tiny RFID chip company based in Shanghai may be small. Still, Hao listed several factors working in his favor: Quanray’s ability to offer a complete RFID solution; lower cost structure (margins of less than 40 percent); and the company's knack for unique solutions like the patented RFID-integrated SIM card.
Current leading UHF RFID vendors like NXP, Impinj and Alien are far ahead of Quanray. If all three features mesh, concluded Hao, “We think we can catch up.”
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