News Release

Hitachi Chemical goes into full-scale production of μ-Chip tags
—Stronger ties with Hitachi, Ltd.—

Hitachi Chemical (Head Office: Tokyo; CEO and President: Yasuji Nagase; paid-in capital 15.4 billion yen) and the Security Traceability Business Division of Hitachi, Ltd. (Head Office: Tokyo; CEO and President: Kazuo Furukawa, hereinafter referred to as ‘Hitachi’) have agreed that Hitachi Chemical will have priority in the manufacture of tag products using μ-Chips (2.45GHz band RFID chips), which are central to the RFID (*1) systems business being developed by the division, and have concluded a Manufacturing Contract.

With the year 2007 as the break point, the RFID systems market is expected to grow rapidly in future in a wide range of fields including all types of traceability, authentication, commodity control and entry/exit, in pursuit of improved reassurance, safety, convenience and efficiency, and the market is predicted to expand to the scale of several 100 billion yen (domestically) in fiscal 2010.

Hitachi’s μ-Chips, measuring 0.4mm square are the smallest level in the world, and are RFID chips with non-rewriteable, 128 bit unique IDs. RFID tags that use μ-Chips, in addition to having lower production costs compared to conventional IC tags, also have excellent field reliability, and it is possible to affix them to or embed them in documents and other paper products, which has been difficult to achieve so far. Also, since they are read-only chips, they wield great power in the prevention of forgery, falsification and copying, and deliver high security. Previously, Hitachi has contracted several processing companies, including Hitachi Chemical, to produce its μ-Chip tags. However, in preparation for the rapid expansion of the market, Hitachi has decided that in order to operate the business more efficiently, it would be most appropriate to concentrate production by Hitachi Chemical, and Hitachi will specialize in the development and marketing of systems and peripheral equipment. Hitachi Chemical has sophisticated technology, rich experience and proven performance, and is expected to create synergy as Hitachi Group.

Since Hitachi Chemical preceded other companies in 1999 in launching pre-paid cards for telecommunications, the company has made further business developments in three types of non-contact type IC tags/cards, 13.56MHz band, 2.45GHz band and the 950MHz band. In addition to realizing high reliability through superior chip mounting technology, its products backed by customer tailored custom antenna design technology, thin processing technology and flat finishing technology have been highly acclaimed, and widely employed in such product variations as amusements, apparel, entry/exit, fire alarms and other residential devices, resulting in aggregate sales volume of 37 million pieces up to fiscal 2006.

With this centralization of production, we aim to achieve 6 billion yen in μ-Chip tag sales and gain a 50% share of the 2.45GHz RFID tag market in the year 2010. We are also hoping for further expansion of existing RFID tags/cards other than the μ-Chip tags, through consolidation with Hitachi in the areas of information and technology, and will expand business towards our target of 12 billion yen in sales for the entire RFID tag/card business, including μ-Chip tags, in fiscal 2010.

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• 1) RFID (Radio Frequency Identification)
  A general term for the auto-recognition technology that reads and writes data using radio waves. RFID tags/cards (IC tags/cards) which have data recorded on them are used to communicate with the reader-writer by electric waves, or electromagnetic waves.
• 2) Hitachi Chemical’s RFID tag/card products will go on show in the ‘2nd RFID Solutions EXPO’ (Dates: May 16 (Wed) ~ May 18(Fri); Location: Tokyo Big Site (Booth No. 19 - 30).
• 3)‘μ-Chip’ is a registered trademark of Hitachi Co., Ltd. in Japan and other countries.