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Q1. Good morning Mr. Sun, as we know Silion has been the remarkable symbol in RFID industry, as the co-founder of Silion, pls help to introduce Silion history and the current business structure and strength.
Sun: OK, firstly let me introduce our history. Silion was established in 2007, as the agent of Thingmagic in the beginning, and in 2008 we started to develop RFID readers based on their modules. As of 2009, we turned to Impinj chips and designed our own UHF RFID modules and readers. After 12 years experiences, we have developed out dozens of UHF modules and readers which are widely used in various application scenarios. Our HQ is in Beijing, and branch office in Shenzhen and Shanghai. As a national high-tech enterprise and a gazelle company in Zhong Guancun, Silion has been the listed company in NEEQ in 2016.
As for Silion business portfolio, there are two major directions. One is that we work with system integrators in various industries. While due to the different technical characteristics and application scenarios of RFID UHF products, different projects have different requirements about the RFID device performance, antenna and tag matching, so this type of cooperation is mostly customized. Silion provides a series of personalized RFID products for large system integrators in various industries to meet different needs.
The other direction is standardization and versatility. We cooperate with RFID hardware manufacturers to provide them suitable RFID modules which can be integrated into hardware devices as a completed equipment. One or two modules are capable to cover the whole industry.
The main strength of Silion is the rich product development experience, lots of project implementation experience, and professional and thoughtful industry services that our team has accumulated over the past 12 years. Our team members always accompany customers to do front-line research, industry upgrade research and practice, and help customers build UHF RFID application systems from zero; and help them test and optimize solutions to achieve the best RFID performance. This professional RFID technical support team has been widely praised by the clients, and it also contributed to Silion’s technical accumulation in making the best performance RFID UHF products.
Q2: What is the most important factor that drives you into the RFID industry? For more than ten years experiences, what do you think of the UHF RFID industry?
I joined RFID industry in 2005. At that time, the idea was actually very simple. It was because I felt that RFID technology has a great application prospect, meanwhile I prefer to be a manufacturer, so I came in. Many of our team members still stay in Silion from the beginning. Every year we would implement one or two distinguished cases in different application fields, like National bank asset management, Retail, intelligent traffic, and Beijing new airport Self-service baggage sorting. These successful cases bring Silion a profound role in RFID industry and confidence to Silion members.
As the UHF RFID industry develops constantly, the demand for UHF RFID products in various application markets has risen. It used to be a small-scale test phase, and now more and more industries use UHF RFID products in large scale. At present, we generally think the new retail, clothing supply chain, electricity and bank asset management, aviation baggage management will have an increasing volume of UHF RFID products. In addition, we can assume that the logistics and express industry, the animal husbandry industry, the tire industry, and the manufacturing industry will also have a leap-forward development in the next 1-2 years. And in the near future, the packaging of various foods and commodities will begin to embed UHF RFID tags to achieve their security management and supply chain management. The amount is very huge. The scale of annual UHF tag use will be trillion-level, and the application of UHF RFID technology will be ubiquitous.
Q3： From the perspective of application scenarios, what contributions do you think RFID has made to the convenience and intelligence of the society? What support and services does Silion provide?
The intelligent identification technology represented by RFID technology is the physical basis for a company or government to digitally manage its own business or social behavior. It will certainly be in a social system with the goal of improving efficiency, controlling risks, and optimizing governance capabilities. The digitalization process has played a huge role. The specific application of RFID technology is reflected in the directions of asset management, logistics supply chain management, manufacturing management, anti-counterfeiting, vehicle management, and personnel management, and almost every industry will have these needs.
For the emerging RFID industry, Silion has always been one of the founders. We have explored the development and practiced from scratch and gradually established a UHF product system that meets specific application scenarios with the related system integrators. For instance, the hot product new retail smart vending machine in 2018, we did research and development with related refrigerator manufacturers and operators for 3 years, and finally achieved UHF smart refrigerators in just one year from 0 to tens of thousands of units delivered.
In the long term, the global annual demand for UHF tags in the food industry will reach two trillion level in the future. One of the main application areas of smart vending machine and smart shelves for retail is the food retail industry. The popularity of food vending machine has also led to the popularity of other smart open-door cabinet. The market demand for book cabinet, medical supply cabinet, tool cabinet, file cabinet and other cabinet that require item management is growing significantly. The combination of UHF RFID technology and image recognition or other automatic identification technologies in certain scenarios will bring a very large application space.
In addition, in the field of smart packaging, the traceability of the entire process of pharmaceutical and food products is an inevitable trend in the future, which is also an important guarantee for people's life and health. RFID tags are affixed at the upstream product when production, and RFID supporting systems and facilities are deployed at the downstream in each process of the supply chain. Then at that time the day when the whole process is visualized, traceable, and industrially coordinated is coming.
In the power industry, starting from March of last year, the State Grid has comprehensively promoted the construction of the ubiquitous electric power IoT, improving the business information capabilities of the power industry from four directions: holographic sensing, ubiquitous connection, open sharing, and integration and innovation. On-demand access to terminals of the power system, using RFID technology to complete the deployment and implementation of a single physical ID system, thereby supporting the management requirements of the entire life cycle of all assets. The State Grid plans to initially build a ubiquitous electric power IoT system through three years up to 2021, and achieve 100% incremental ID coverage of physical grids. This phased goal will also greatly promote the application scale of UHF RFID technology in the power industry.
Since the International Air Transport Association IATA officially entered into force resolution 753 on baggage tracking on June 1, 2018, airlines and airports around the world have begun piloting solutions for RFID baggage control. According to the survey data from air transportation company SITA in 2019, 4.36 billion passengers worldwide checked in more than 4.27 billion pieces of luggage in 2018. At present, the average mishandling rate of luggage at airports is six per thousand, that means in 2020 there will be about 26 million pieces of luggage mishandled. If the average cost of each piece of mishandled baggage is US $ 100, it will cost nearly US $ 2.6 billion. IATA said that the use of UHF RFID only could reduce the mishandling rate of luggage by at least 25%. Therefore, in the next period of time, the application of UHF RFID technology in the air transport field will also quickly be measured quickly.
Looking through the UHF RFID application market, there are some areas still in the pilot phase of UHF's early trial run and in small batches, such as finance, electricity, logistics, aviation, etc. For the entire RFID industry, the future is very optimistic, because after two or three years, the use of UHF RFID technology in each industry will be much larger than the current amount. However, the growth of the industry will still have a continuous climbing process and escalate.
Q4: At the beginning of 2020, the Corona Virus spread globally, do you think what we can benefit from RFID technology in virus defense? How and in which process we can use RFID?
UHF RFID has played a great role in fighting and defending the Corona virus. For example, some smart retail vending machine and self-service retail supermarket can reduce personnel contact and reduce the risk of virus spread. Another typical use of RFID is the supply chain for logistics and warehouse, it also works in hospital asset and medicine management. In the case of insufficient staff and less contact frequency of personnel, using RFID as data collection method will play a significant role in improving the efficiency of the supply chain, asset management, and storage management.
In the long run, RFID will have more in-depth applications in the medical field, such as security traceability of the entire supply chain, pharmaceutical vaccines, RFID medical equipment and medical consumable management system, RFID medical waste management system, and RFID blood bag management system, RFID supply chain management system for merchandise vending machines in hospitals, etc., with the gradual improvement of the whole environment and infrastructure, intelligent medical care will also deepen the implementation of information, platform and digital upgrades. I believe that in the near future, in more and more fields, the application of RFID will continue to popularize and further provide safety and convenience for people's lives.
Q5、What do you think we can learn from the lessons of the Corona epidemic for those RFID entrepreneurs?
I feel that when humans are testing virus, the virus is actually testing humans, such as the level of our organizations, the conscience of businessmen, the quality of experts, the conduct capability of doctors, and the public's perception. As regard to the RFID industry, I think there are the following aspects: First, practice internal power and optimize product performance. This is also Silion’s corporate culture --- do things down to earth. Through the test of the epidemic situation, discover the advantages and disadvantages of their respective RFID products and applications, and continuously improve and optimize to provide more specialized products and services that are more suitable for the application scenario. The second is to grasp business opportunities and develop potential application needs. Explore more needs of the medical industry, the next step is to jointly develop the upstream and downstream of the industry; the other point is to increase promotion and publicity, so that more companies and personnel understand RFID, realize the importance of RFID and digitalization, make sure that software deployment and system establishment are well prepared.
Q6、What does Silion plan to do for the next when the Corona epidemic dissipates?
We realize that the sudden Corona epidemic will change many concepts and consciousness of the Chinese people, for families, for ourselves, and for society. Silion’s value is to do things down-to-earth. Our mission is to make contribution to the global automatic identification industry. We hope that through continuous efforts to improve the performance of our products, from usable into easier to use. We also welcome those who are capable and responsible of RFID technology and marketing to join our team, everyone to work together to do something solid.
In order to further improve the company's ability to serve customers, we concentrate on developing the company's product agent service system this year. In the future, some of our products will only be sold through agents. And Silion will focus more on the origin of the product design and technology, develop and produce the best cost-effective products, and help channel partners to do a good job of customer service; both of us play respective advantages, and promote RFID in more industries Applications. I hope all of us will go hand in hand to get through such a difficult time now. We believe that the Corona epidemic will eventually dissipate and we will definitely have a better tomorrow. Thank you!