SAN JOSE, Calif. -- IBM Corp. and Dutch consumer electronics giant Royal Philips Electronics NV said Monday (January 26, 2004) they are planning to operate in the radio frequency identification (RFID) and smart card applications markets together.
Philips and IBM plan to combine their expertise to address high-security smart cards and RFID technology in business and consumer applications. Philips' semiconductor division is to make the RF devices to be embedded in almost items from consumer packaging and clothes up to business subsystems and work in progress. IBM is to provide computer systems and services that make use of the RF devices.
No financial terms were disclosed and no indication that the companies planned joint venture to attack the market.
The companies said that the key end-application areas are RFID solutions for supply chain management, retail and asset management, as well as smart card solutions for finance, e-government, transportation and event ticketing. Within the scope of the cooperation, IBM Global Services is to build an RFID system for Philips semiconductor manufacturing and distribution facilities in Taiwan and Hong Kong.
"It is Philips' mission to continue bringing greater benefits to both companies and today's 'Connected Consumers' -- enabling them better access to information, entertainment and services. To this end, the RFID system in East Asia being built by IBM is a good illustration of Philips adopting the very technology it is driving into the marketplace," said Scott McGregor, president and chief executive officer, Philips Semiconductors.
"Philips is the worldwide leader in high security smart card controller ICs and RFID chip solutions. IBM is committed to this marketplace and we are confident that the deployment of our joint solutions will reduce operational costs, increasing profitability and providing a competitive advantage for our customers," said Terry Hopkins, vice president, wireless e-business, IBM Global Services.
The first step in the Southeast Asia pilot system is that wafer cases and carton packages are to be tagged at Philips Semiconductors' Kao Hsiung manufacturing site in Taiwan and the division's distribution center in Hong Kong. The project started in November and is expected to go live before the end of 2004, Philips said.
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