RFID-ubiquitous sensor networks.

On Jan. 1, Wal-Mart began requiring its suppliers to equip their merchandise with radio frequency identification (RFID) tags. The technology will allow retailers and distributors to keep a close check on inventories and supply chains. Last year, Korea began its own public procurement RFID pilot project. The program helps the government keep an inventory of items it buys such as PCs and printers.

Basically, RFID detects a product's information without physical contact or visibility. Instead, a scanner "reads" information from a tiny radio transmitter. RFID technology could transform the logistics, distribution and security services because it provides real-time visibility in the supply chain.

In Korea, "we see RFID as an important part of the overall ubiquitous sensor network infrastructure," says Lim Kyung Soo, vice president of research at LG CNS, a system integration firm that has pioneered RFID deployment in Korea. Moreover, Lim says, she believes RFID will be linked with other ubiquitous infrastructures such as home networks, BcN (broadband convergence network) and the wireless networks that are being developed. The Korean government has planned an ambitious RFID roadmap, set standards and implemented various pilot projects to make the country a frontrunner in RFID deployment. Lim says the most important activity over the next two or three years will be the government-driven pilot projects, for example, the marine transportation project in which her company is participating.

Rapid deployment of technology is likely to create additional demand for RFID chips and readers as well as middleware. Korean companies want to design and manufacture RFID chips and readers, help write the middleware and integrate the systems. RFID commercial services could create $11.5 billion in production of devices and services by 2010. The ubiquitous sensor network will enhance consumer convenience by efficiently managing products, food, transportation, environment and Medicare, creating $6.8 billion in production by 2010.

By fast-tracking some of its pilot RFID projects in logistics, transportation and supply chain management, the Korean government is hoping that it will build a strong test-bed for the technology and persuade foreign companies to adopt elements of Korea's ubiquitous IT infrastructure.

Clearly, RFID could become a "rule-changing" technology. But like all others, it faces challenges. Primary among them is the cost of the radio transmitters. They're still expensive because of the cost of RFID chips. Only when the industry starts producing them on a massive scale will chip costs fall substantially.