Under the deal, TI becomes the primary supply of ultra-high frequency EP Gen 2 flexible inlays for new Moore Wallace RFID labels.

Specifically, TI’s RF silicon components would be inserted into Moore Wallace’s RFID thermal transfer labels, which customers can encode with RFID as well as print barcodes and text onto. The result is a label that is EPC Gen 2 ready.

Gen 2 is currently being reviewed by the International Standards Organization as the first global RFID technology standard. It is widely expected to get the green light from the ISO by early next year.

Under the deal, Moore Wallace would be able to make more than 500 million Gen 2 smart labels annually using TI silicon.

[The deal] is unprecedented from the context of Gen 2 production readiness, said Enu Waktola, TI’s EPC retail supply chain marketing manager.

Terms of the agreement were not disclosed.

This likely would be the first of many deals with RFID label markers for TI’s Gen 2 inlays, said Erik Michielsen, director of RFID at ABI Research.

This is significant in that it demonstrates how RFID solutions are ramping up for high-volume Gen 2 deployments, said Michielsen. This is a big step for TI in that this is probably is the initial opening announcement for their Gen 2 label partners. I imagine there’ll be more to come.

Waktola said the agreement with Moore Wallace was not exclusive and that TI also is working with other label makers.

It makes sense that TI struck its first Gen 2 label-making deal with Moore Wallace, one of the world’s biggest makers of RFID labels, since the companies have been working together on RFID since 1998. We are leveraging the relationship and production capabilities that we can bring together to the market, Waktola said.

While smaller silicon makers, notably Impinj, are also marketing Gen 2 inlays, Michielsen said partnerships between large companies such as TI and Moore Wallace give the RFID industry Gen 2 supply stability and clout. It sheds a positive light on the future for Gen 2, he said.

The TI-Moore Wallace deal also points to where Gen 2 RFID product volumes are headed next year, Michielsen said.

Moore Wallace sells its RFID labels to between 30% and 40% of so-called compliance program suppliers in the US today, said Nancy Mitchell, Moore Wallace’s RFID product manager. That is, companies who comply with the RFID mandates of large goods purchasers such as Wal-Mart, Target and the US Department of Defense.

Most of Moore Wallace’s RFID customers are consumer goods product makers, Mitchell said. Industrial manufacturers, which include the DoD, are its next-largest group of customers, followed by pharmaceutical makers. While drug makers are fast adopting RFID, she expects this customer mix to remain unchanged for the next year or so.

TI’s Waktola said she expects Gen 2 RFID hardware, such as readers and printers, to be on the market this quarter.

The new Moore Wallace smart labels are currently being sampled, with full production slated for later in the third quarter.

Mitchell said a number of consumer goods makers have already begun pilots of the labels and she expects them to convert to Gen 2 during the next two quarters.

Moore Wallace has distribution channels for the new labels in Asia, Europe and North and South America, she said.

Currently, the company would just manufacture the Gen 2 labels in North America and expects production at its plants in Asia, Europe and South America at some future point. We’ve been discussing that internally but don’t have any specific timelines, Mitchell said.