Philips and IBM Join Forces in the RFID and Smart Card Marketplace

Working together, Philips and IBM will combine their industry expertise to address the growing need for advanced high-security smart cards and RFID technology in day-to-day business processes, operations and consumer lifestyles. The key end-application areas that the companies plan to address 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 joint cooperation, IBM Global Services will also build an RFID system for Philips Semiconductors division manufacturing and distribution facilities in Taiwan and Hong Kong. The first joint project between the two companies is the development and implementation of an RFID solution within Philips Semiconductors division to improve the business processes within the manufacturing and distribution supply chain, inventory management and control as well as to enhance customer satisfaction. In a first step, wafer cases and carton packages will be tagged at Philips Semiconductors Kao Hsiung manufacturing site in Taiwan and the divisions distribution centre in Hong Kong. The project started in November and will be fully live during the course of 2004. The supply chain management, retail and logistics markets are constantly looking for ways to enhance the profitability of their operations, reduce costs through higher degrees of automation and improve response times in inventory management. These customers today recognize that the RFID marketplace is made up of small players, and therefore are seeking out committed blue chip organizations that have a reputation for delivering reliable and tested solutions. As Philips extends its RFID business from early adopters to the mass market, its business is rapidly moving towards large-scale projects that require global reach, an expertise in project management and system solutions. By teaming up with IBM, Philips will move beyond delivering its expertise and RFID chip offering, and move towards integrated end-to-end solutions for major retailers, consumer goods manufacturers and couriers. Both companies bring unique perspectives and technology strengths to the alliance for the benefit of both smart card and RFID market places. Philips provides industry leading high-security contact and contactless chip technology for smart cards, using the most advanced manufacturing processes. As the global leader in chip solutions for the RFID industry, Philips is focused on delivering cost-effective products meeting global standard specifications, such as electronic product code (EPC). Through IBM Global Services offerings, which comprise consulting, project management, and implementation services as well as specialized software, companies will now have a phased and easy to integrate approach to smart card and RFID implementation. By leveraging IBMs market leadership with Philips technology strengths, both companies will gain greater scope, interaction and feedback from current and potential end customers.