RFID Microchips: The Future Of The Internet, Or A Privacy Nightmare?

RFID Microchips: The Future Of The Internet, Or A Privacy Nightmare? 

 

 

By Eben Esterhuizen, CFA: Back in 1998 China launched the Golden Shield Project, one of the largest surveillance efforts of all time. The program was implemented to monitor China's rapidly urbanizing population by using technology that ranges from closed circuit television systems to cell phone monitoring.

One of the program's scariest technologies, unveiled in 2007, was the issue of permits to citizens of Shenzhen, a city in the south of China. Sounds harmless enough; except that these permits turned Shenzhen into a virtual fishbowl. Each permit contained a small computer chip that transmitted data to the Chinese government, detailing the holder's every movement. Not only did these permits allow the government to know the residents' real-time location, but they also stored personal data on the holder, containing everything from credit histories to medical records and education.

The Chinese government, always looking for ways to control its rapidly growing population, could theoretically have an eye on the movements of every single person living in Shenzhen.

This Orwellian nightmare might have been ripped from the pages of 1984--but it's no fiction. In fact, you've probably been exposed to this technology already. Radio-Frequency Identification (RFID) tags comprise a new and booming industry that has seen rapid growth over the last couple of years.

Though invented over forty years ago in 1969 and patented in 1973, RFID is only now becoming commercially and technologically viable. RFID tags are microchips that act as transmitters, always listening for a radio signal sent by transceivers, or RFID readers. When a transmitter chip receives a certain radio query, it responds by transmitting its unique ID code back to the transceiver.

Here's a short introductory video:



Directly or indirectly, you've been tagged. Employed for years to track livestock and freeway traffic, companies are now finding more and more practical (and profitable) uses for the technology. Like the EZ Pass, which automatically deducts tolls from a pre-paid account, alleviating traffic jams and headaches for commuters; or the ExxonMobil Speed Pass, a touch-and-go way to pay for gas. And pet owners often chip their animals with ID tags that use RFID to track their movements.

"Right now, you can buy a hammer, a pair of jeans, or a razor blade with anonymity. With RFID tags, that may be a thing of the past," writes Scott Granneman at Security Focus. By tagging their products, manufacturers could also potentially track the people that buy these products--not unlike the surveillance of Shenzhen.

IBM released this commercial in 2006, illustrating how RFID could make super markets more efficient:

"There is no law requiring a label indicating that an RFID chip is in a product. Once you buy your RFID-tagged jeans at The Gap with RFID-tagged money, walk out of the store wearing RFID-tagged shoes, and get into your car with its RFID-tagged tires, you could be tracked anywhere you travel," writes Granneman.

That said, there's also great economic potential for RFID tags. The technology is key to enabling the future Internet of Things (IOT), the networked interconnection of everyday objects. If the quotidian objects we use, from soda cans to airplanes, are equipped with radio tags, they can then be identified and managed by computers in the same way humans can.

Here's an IBM video explaining how RFID can be used to create the Internet of Things:



"But chipping inanimate objects is just the start. The endpoint is a form of RFID that can be injected into flesh," speculates Katherine Albrecht, author of the book SpyChips. "Pets and livestock are already being chipped, and there are those who believe humans should be next. Incredibly, bars have begun implanting their patrons with glass-encapsulated RFID tags that can be used to pay for drinks." Some even see Biblical implications in the technology: "This application startles many Christians who have likened payment applications of RFID to biblical predictions about the Mark of the Beast, a number the book of Revelation says will be needed to buy or sell in the "end times."

Here's an ad making the argument for implantable chips:



According to Albrecht: "While some of these applications are slated for our future, others are already here, right now -- and they're spreading. Wal-Mart has mandated that its top one hundred suppliers affix RFID tags to crates and pallets being shipped to selected warehouses. Analysts estimate this one initiative alone has already driven close to $250 million worth of investment in the technology." Other retailers, including Target and Best Buy have followed suit, and according to one industry analyst "there are now sixty thousand companies operating under RFID mandates and scrambling to get with the spychip program as quickly as possible."

Others claim that people are overreacting over the privacy implications of RFID tags. "Laws of physics make RFID very poor for tracking people, but some extremists still fear privacy," said Patrick J. Sweeney II, chief executive officer of ODIN, a leader in packaged RFID solutions for health care, aerospace, financial services and government agencies. "Like credit cards when they first came out many people are fearful of being tracked with RFID. In truth RFID can read on order of feet, where mobile phones are GPS enabled and can track you anywhere."

How the RFID industry evolves remains to be seen, and several companies are going to be affected by the trends described above. Here is a list of companies developing RFID products:

Texas Instruments (Snapshot, News, Earnings, Debt, Workforce, Financials)

TI is the world's largest integrated supplier in radio frequency identification (RFID), with over 500 million TI-RFID tags, smart labels, and RFID readers manufactured for use in asset tracking and contactless payments.

STMicroelectronics (Snapshot, News, Earnings, Debt, Workforce, Financials)

STM provides a wide range of radio-frequency identification (RFID) chips to match different target applications such as mass transit, access control, brand protection and anti-counterfeiting, industrial asset tracking, and medical and library use.

RF Micro Devices (Snapshot, News, Earnings, Debt, Workforce, Financials)

RF Micro Devices, Inc. designs and manufactures radio frequency (RF) components and compound semiconductors in the United States and internationally.

Hittite Microwave Corporation (Snapshot, News, Earnings, Debt, Workforce, Financials)

Hittite Microwave Corporation designs and develops integrated circuits (ICs), modules, and subsystems for technically demanding radio frequency (RF), microwave, and millimeterwave applications in the United States and internationally.

Atmel Corporation (Snapshot, News, Earnings, Debt, Workforce, Financials)

Atmel offers a complete line of contactless RFID products (ICs, micromodules and complete transponders). The company also offers reader chips for a complete RFID system.

Intermec, Inc. (Snapshot, News, Earnings, Debt, Workforce, Financials)

Intermec offers a range of scalable RFID systems. Its RFID products include RFID tags, readers, printers, software, and related equipment to track pallets, cartons, containers, and individual goods and assets.

Semtech Corporation (Snapshot, News, Earnings, Debt, Workforce, Financials)

Semtech's RFID business unit produces RFID tags and labels, which are then sold to RFID application developers and integrators in China. The company has said that it decided to invest in RFID product equipment because it believes the global demand for RFID labels and tickets will grow significantly over the coming years.

Maxim Integrated Products Inc. (Snapshot, News, Earnings, Debt, Workforce, Financials)

Maxim Integrated Products, Inc. designs, develops, manufactures, and markets various RFID products. The company primarily serves industrial, communications, consumer, and computing markets.


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