Texas Instruments Inc. has begun shipping radio-frequency identification chips based on the Generation 2 protocol, which is intended to offer more-consistent read rates and interoperability than earlier generations. The move marks Texas Instruments' entrance into the market that supplies RFID tags to consumer goods and retail companies. Texas Instruments is shipping inlays, made of the semiconductor and antenna, and straps, which use a semiconductor and conductive ink, to companies that make RFID labels for pallets and boxes. The company says it's ramping up production, and will be producing more than a million units by next month.

The semiconductor manufacturer for years has made RFID chips in frequencies used for applications in prepayment cashless systems and car-entry systems, but it opted out of the electronic-product code Class 1 and Class 2 protocols used by consumer-goods companies and retailers such as Best Buy, Target, and Wal-Mart Stores.

Gen 2 technology is expected to help spur RFID adoption among retailers and consumer-goods companies because of the benefits if offers over versions Class 1 and Class 0. "Gen 2 also allows readers in a warehouse that has 50 dock doors, for example, to co-exist without interfering with each other when RFID tags on cases and pallets pass into their domain," says Enu Waktola, EPC retail supply-chain marketing manager at Texas Instruments RFID Systems.

Gen 2 also is expected to ease physics problems related to water absorption and metal reflection of radio waves. For example, in earlier versions of RFID, it can be more difficult for a reader to recognize an RFID tag on a case of water than an RFID tag on a case of an item that doesn't contain any liquid.