XiaoTong Column · 2025-06-20

Risk Compass”Industrial-grade RFID applications in China”

I. Industry Risk Analysis

(1) Policy Risk

The industrial-grade RFID application industry faces risks associated with policy evolution. Currently, regulatory rules regarding data security and electromagnetic radiation are still in a period of dynamic adjustment. For example, the unclear compliance boundaries of the “Personal Information Protection Law” for tag information collection may lead to retroactive penalties. The lack of complete unification of technical standards (such as frequency band authorization and cross-border certification) hinders the implementation of cross-regional businesses. The tightening of environmental protection policies may force the iteration of existing material processes, increasing production costs. There is an expectation of a decline in some local industrial subsidies, which may affect the purchasing enthusiasm of downstream customers. Attention should be paid to the impact of policy lag and sudden changes on business models.

(2) Economic Risk

The industrial-grade RFID industry currently faces the risk of shrinking demand caused by economic cycle fluctuations. The slowdown of global economic growth and the weak investment in the manufacturing industry may lead enterprises to cut their budgets for intelligent transformation, resulting in delays or shrinkage in the demand for RFID tags and system integration. The high and volatile prices of bulk commodities drive up the costs of raw materials such as aluminum and chips, putting pressure on enterprises’ gross profit margins. In a credit-tightening environment, the extension of the payment cycle of small and medium-sized customers exacerbates the cash flow pressure. The rapid pace of technological change forces enterprises to continuously invest in R & D. Start-up companies are squeezed by both “insufficient self – financing ability” and “rigid innovation investment”. Leading enterprises in the industry use their scale advantages to cut prices and compete for orders, further squeezing the market survival space.

(3) Social Risk

With the split of consumption concepts among decision – makers of different generations, the application of industrial – grade RFID faces the risk of inter – generational cognitive gaps. Young management teams pursue digital innovation but neglect supply chain ethics, which may easily lead to disputes over data abuse. Conservative decision – makers are slow to perceive the value of technology, resulting in a sharp increase in market education costs. Generation Z employees force enterprises to deploy transparent tracking systems, but the generational conflict over privacy protection in the public may trigger a social trust crisis. Entrepreneurs need to establish an inter – generational balance point between technological innovation and ethical consensus.

(4) Legal Risk

The industrial – grade RFID industry faces risks related to data privacy compliance. Collecting sensitive information (such as logistics trajectories and asset data) without user authorization may violate the “Personal Information Protection Law”. The high barriers of technological patents make it easy to get involved in intellectual property infringement disputes related to chip design and communication protocols. Products need to comply with electromagnetic radiation standards of multiple countries (such as FCC and CE certifications), and non – compliance with technical parameters will face the risk of being banned from the market. When the industry’s application scenarios involve military, medical and other fields, the lack of qualifications or violations of cross – border data transmission may trigger national security review penalties.

II. Entrepreneurship Guide

(1) Suggestions on Entrepreneurship Opportunities

There are currently three major entrepreneurship opportunities in the industrial – grade RFID field: Firstly, focus on vertical scenarios such as intelligent manufacturing and port logistics, and develop anti – interference tags and customized reading and writing solutions for pain points such as metal environment interference and batch reading accuracy. Secondly, integrate edge computing and RFID technology to provide real – time dynamic data services in scenarios such as equipment predictive maintenance and asset lifecycle management. Thirdly, layout cross – border supply chain nodes, combine the compliance requirements of radio frequency bands in multiple countries with the demand for goods traceability, and launch a one – stop solution of compatible hardware + cloud data visualization to seize the dividends of the global industrial chain’s digital transformation.

(2) Suggestions on Entrepreneurship Resources

Industrial – grade RFID entrepreneurs should prioritize the integration of four types of resources: In terms of technical resources, cooperate with university laboratories or chip companies to obtain support for the R & D of underlying protocols, and build a competitive barrier with independent patents. For supply chain resources, sign long – term supply agreements with module manufacturers and antenna designers, and simultaneously establish 2 – 3 alternative suppliers to cope with the risk of component fluctuations. Regarding customer resources, it is recommended to target the intelligent warehousing transformation projects of leading manufacturing enterprises as benchmark cases, and establish joint solution promotion channels with industrial Internet of Things integrators through industry exhibitions. For policy resources, focus on connecting with the “Special Subsidy for Intelligent Manufacturing” of local industry and information technology departments and the hardware testing laboratory resources of industrial parks to reduce the initial equipment debugging costs.

(3) Suggestions on Entrepreneurship Teams

Industrial – grade RFID entrepreneurship teams need to first assemble a composite team with members having experience in Internet of Things hardware development, radio frequency protocol R & D and vertical industries. The technical leader should be familiar with international standards such as ISO/IEC 18000 and master the design of multi – scenario hardware compatibility. At the same time, recruit at least one business expert deeply involved in the manufacturing/logistics field to accurately define customer needs. The team should have a business role with supply chain integration capabilities, focusing on connecting with chip module manufacturers, edge computing service providers and industry integrators. It is recommended to establish an agile management mechanism of “hardware iteration + scenario verification”, and quickly verify the technical reliability and business closed – loop ability through small – batch industry – customized solutions to avoid falling into the trap of pure technical R & D.

(4) Suggestions on Entrepreneurship Risks

Industrial – grade RFID entrepreneurs need to focus on compliance with industry standards. First, obtain ISO/IEC series certifications to ensure the anti – interference and extreme – environment resistance capabilities of hardware. Establish a flexible supply chain system, sign stepped procurement agreements with domestic and foreign chip module suppliers, and reserve alternative solutions to cope with component shortages. Develop configurable solutions for vertical fields such as manufacturing and logistics, and jointly build test scenarios with leading customers to verify product reliability. Build a patent map to avoid existing technological barriers, and protect core algorithms through a combination of software copyrights and utility models. Adopt a subscription – based charging model to balance the initial customized investment, and create value – added space for operation and maintenance through pre – embedded device data interfaces.

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