Alien Technology Corporation Breaks the Twenty Cent Barrier for Writable RFID Labels.

Business Editors/High-Tech Writers

MORGAN HILL, Calif.--(BUSINESS WIRE)--March 30, 2004

Alien Technology Corporation announced today the industry's first sub-twenty-cent RFID label. The Alien Technology(R) ALL-9238, a fully converted EPC Class 1 label, can be purchased today for less than 20 cents in order quantities of 1 million.

The ALL-9238 is a user-programmable label, making it suitable for use in general supply chain applications such as those being implemented by major retailers and their suppliers around the world. The label is about one-half inch by four inches in size, small enough for use on a wide variety of products. Used in combination with Alien(R)'s recently-released ALR-9780 RFID reader, the label delivers state-of-the-art performance demanded by logistics applications.

"Customers are expecting and demanding dramatic reductions in RFID hardware costs to make their business cases work, yet a market research firm recently published a report forecasting that RFID tag prices would fall slowly from an estimated average of about 50 cents today, to 26 cents by 2012," commented Tom Pounds, Vice President of Corporate Development and Product Strategy at Alien. "Alien has been very clear about our roadmap for aggressive cost reduction, and this sub-20 cents price for labels in relatively modest quantities shows our plan is on track. RFID labels will be delivered at prices appropriate to begin mass adoption in the retail supply chain and other industries in 2004."

The sub-twenty cent tag offered by Alien is made possible because of the company's patented manufacturing process, Fluidic Self Assembly(R) (FSA). This manufacturing technology allows for the efficient packaging of very small semiconductors in very high volumes that in turn are packaged as RFID tags.

Alien has recently announced the acceleration of its schedule to locate inlay assembly and test operations in Fargo, North Dakota. This quadrupling of tag capacity during 2004 will allow Alien to support the significant increase in demand expected as suppliers begin to meet the tagging imperatives from leading retailers and the Department of Defense. By the end of 2004, Alien is putting in place the capacity to package over one billion RFID chips at its Morgan Hill, CA headquarters, on its way to twenty billion annual manufacturing capacity scheduled to come on line by early 2006.

About Alien Technology

Alien Technology Corporation is a leading provider of reliable, high-volume, low cost, EPC compliant Radio Frequency Identification (RFID) products. Using Fluidic Self Assembly (FSA(R)), a patented manufacturing process, Alien manufactures electronic product code (EPC) class 1 tags and readers used in a variety of applications including supply chain management, logistics operations and anti-counterfeiting to improve inventory management and reduce operating costs. Alien Technology Corporation is an active member of EPC Global. More information about Alien Technology Corporation can be found on the Company's website at www.alientechnology.com. Alien, Alien Technology and FSA are trademarks or registered trademarks of Alien Technology Corporation in the United States and other countries.