1999-05-06 , ESC-9960
Business News From Philips Semiconductors

Rafsec and Philips Semiconductors today announce a co-operation agreement under which Rafsec will establish a high-volume production line for smart label inlets, based on Philips Semiconductors' I•CODE ICs. The production line will be built in Rafsec's factory in Finland. I•CODE has been developed by Philips Semiconductors and is the most advanced smart label IC available.

Rafsec will offer a variety of I•CODE inlets with label material, on reels, to label converters and other distributors. The die-cut inlets, with adhesive, can be inserted into label printing and labelling machines by automated processes in order to print smart labels without significant investment. Mass production will begin at the end of 1999, though samples are already available for piloting. At present, I•CODE has been successfully trialled by British Airways, El Corte Inglés and leading express parcel services.

Smart labels are transponders, based on radio frequency identification (RFID), which are small enough to be laminated between layers of paper or plastic to produce low-cost, consumable labels. This new technology contains read/write memory for storing information related to the product, manufacturer, or logistics process. They can be simultaneously operated by read/write devices at a rate of over 30 labels per second and, unlike bar codes, they do not require a direct line of sight between the reader and label.

Timo Lindström, Department Manager at Rafsec, says: "Rafsec chose Philips Semiconductors as its strategic partner due to the leading technological position of Philips in the smart label (RFID) business. In order to penetrate the smart label markets, openness and standards are essential. Philips Semiconductors has a proven track record in developing the open technology to which Rafsec wants to commit. As it is clear that we manufacture only RFID inlets, we appreciate the fact that there are several major suppliers of I•CODE-compatible system infrastructures which are developing the smart label market. For us, RFID is a natural avenue of growth in order to offer added-value products to label converters and end-users."

Dirk Morgenroth, Philips Semiconductors' Marketing Manager for I•CODE, adds: "We are delighted to have won such a strong strategic partner to develop the smart label market. As a well-established, multinational company originating out of the label business, Rafsec's commitment to invest in these emerging markets demonstrates the increasing momentum that the smart label markets are gathering. Rafsec has an extensive customer base and will be able to offer I•CODE labels, which are suitable for standard paper label production processes, in high volumes."

Rafsec belongs to Raflatac Group, a major European supplier of synthetic and paper-based self-adhesive labelstock. Raflatac has factories in Finland in Tampere and Jyväskylä, France, the UK, Germany, Australia and Malaysia, and a wide network of terminals and sales offices throughout the world. Raflatac has about 1,400 employees and its turnover in 1998 was FIM 2.7 billion. Raflatac is part of UPM-Kymmene Corporation.

Philips Semiconductors, a division of Royal Philips Electronics, headquartered in Eindhoven, The Netherlands, is the eighth largest semiconductor supplier in the world. Philips Semiconductors is a leader with a proven reputation in the development and production of cryptocontroller and contactless smart card ICs as well as in components for radio frequency identification. Philips Semiconductors' innovations in digital audio, video and mobile technology position the company as a leader in the consumer, multimedia and wireless communications markets. Sales offices are located in all major markets around the world and are supported by regional application labs. Additional information on Philips Semiconductors can be obtained by accessing its home page at http://www.semiconductors.philips.com