Impinj Acquires Intel’s RFID Business, Strengthens Hold on Tracking Technologies (Especially Chips)

7/10/08Follow @gthuang

Last month we reported that Seattle-based Impinj, a prominent maker of radio-frequency identification (RFID) technologies, had sold off its memory business to focus on its core RFID products. Now the company has announced that it is acquiring Intel’s RFID business, which specializes in making chips for smaller-size applications like handheld readers.

It’s a “huge step for Impinj,” said CEO William Colleran in a statement. Although financial terms were not disclosed, the deal sends RFID chips and patents, a handful of employees, and a couple dozen new customers worldwide to Impinj, in exchange for Intel gaining an unnamed equity stake in the startup.

Intel’s chips fill a clear need for Impinj, which focuses on the ultra-high-frequency band: they allow the company to sell RFID hardware not only for high-performance stationary devices (at gates, tollbooths, border crossings, and check-out lanes, say), but also for smaller, faster, and cheaper readers that can be carried around warehouses and stores or embedded in vehicles for keeping track of supplies, tools, or products. Starting this fall, for instance, new Ford trucks will have an option for a built-in RFID reader.

“For a while now, Intel has been looking for the right home for this product line. There’s a lot of satisfaction to see this business graduate,” says Kerry Krause, marketing director of Intel’s RFID business, based in Portland, OR, and now with Impinj. The deal “puts Impinj in a terrific position,” he adds, because it opens up “a much broader range of applications and a broader worldwide customer base.” Krause cites a list of new customers that includes ThingMagic in Cambridge, MA, Alien Technology in Morgan Hill, CA, South Korea-based Samsung and Ceyon, and Sense Technology and Hopela in China—with a couple dozen more customers in the works.

I remember covering RFID technologies five years ago, back when Gillette and Wal-Mart were just starting to buy into the tracking-tag approach, and I’ve been wondering how the industry has been doing. According to Krause, the main hurdles to adoption—such as agreeing on international standards and getting the right hardware—have largely been overcome. And startups like Impinj have been cashing in. Since 2000, Impinj has raised more than $100 million in venture funding from the likes of Arch Venture Partners, Madrona Venture Group, and Polaris Venture Partners. With today’s deal, the company is clearly positioning itself to be the RFID market leader in chips, readers, and other hardware—at least for now.

Mark Roberti, founder and editor of RFID Journal, speculates that Impinj might eventually get out of the RFID reader business and just sell the chips, once the market takes off. But that will be another two to three years or more, he says, because end users are still figuring out the physics and economics of RFID tags and readers.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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