NFC TimesThe premier source for news, analysis and commentary on
Near Field Communication and all contactless technology

U.S.-based Texas Instruments plans to introduce an NFC chip, joining what is becoming a crowded field of suppliers of chips for the short-range wireless technology, NFC Times has learned.

Texas Instruments, which is one of the world’s largest semiconductor suppliers, is not targeting the chip for mobile phones, however, a spokeswoman confirmed to NFC Times. So, unlike chips from the other suppliers, the Texas Instruments chip will not support the single-wire protocol standard. That standard, known as SWP, enables payment and other secure applications to run on SIM cards with a standard connection to the NFC chip. The NFC chip serves as the contactless interface with point-of-sales terminals and other readers.

Texas Instruments declined to disclose any other details about its planned standalone NFC chip until the fall, the likely launch date. Update: The company earlier had pushed the launch date for the chip to the first quarter of 2011. It has delayed it further, saying the chip will not be ready before June 2011.  End update.

While mobile phones are the most talked about devices that will support NFC technology, there are many others that Texas Instruments might be targeting, such as PCs, digital cameras, music players and television set-top boxes. For example, with NFC, consumers could more quickly open Bluetooth or wireless-LAN connections between devices to transfer content.

The company is also a major supplier of wireless chipsets for mobile phones and one of the top suppliers of Bluetooth chips. And Texas Instruments has been developing chips for phones that combine wireless technologies, such as Bluetooth and WiFi or Bluetooth and GPS. While the company is working on a standalone NFC chip, presumably the technology could later be incorporated into these combo chipsets, although Texas Instruments may also be working with other NFC companies on this integration.

The move to develop its own NFC chip also signals Texas Instruments' continued interest in the contactless chip market. The company produces chips for payment cards and key-fobs supporting MasterCard Worldwide’s PayPass application and has supplied American Express with chips for ExpressPay cards, also in the U.S. It’s not clear if the chip maker continues to supply AmEx.

In January 2009, Texas Instruments restructured its RFID unit, laying off roughly 60 employees and moving most of the operation to Germany. That is where development of the NFC chip and contactless payment chips is based.

Market Grows More Crowded
While the planned NFC chip does not compete directly with others targeted for mobile phones, Texas Instruments would join a growing list of chip suppliers with NFC chips either on the market or planned this year. (See table below).

All the others are mainly targeting mobile phones and either support SWP or plan to do so–although at least one, NXP Semiconductors, also supplies non-SWP chips for phones and other devices.

Besides NXP, whose chips have been used in numerous NFC trials, the list includes France-based fabless supplier Inside Contactless, whose SWP chips have been used for NFC trials involving SIM-based applications. And Shanghai Fudan Microelectronics, which has supplied NFC chips to at least two Chinese handset makers, also has a chip on the market.

Switzerland-based STMicroelectronics said it will have its SWP chip available during the second half of 2010 for production. The NFC chip has apparently been delayed given that ST announced the chip in late 2008. Laurent Degauque, telecom and NFC marketing manager in ST’s smart card division, predicts handset makers will introduce three to five NFC models commercially before the end of 2010, following long market delays.

“At the end of the race, we are more or less at the same level (as other chip suppliers),” he told NFC Times. “The market hasn’t started yet. We come right when market is going to start.”

Fabless Danish startup Polaric also plans an SWP-enabled chip this year, CEO Rashad Elsubaihi confirmed to NFC Times. And unconfirmed reports say Japan’s Sony Corp., co-creator of NFC technology with NXP, is working on an NFC chip. It already supplies millions of NFC-like FeliCa contactless wallet-phone chips for the Japanese market. Beijing Tongfang Microelectronics also is planning an NFC chip for the Chinese market, said a source.

All are standalone NFC chips. But there will be other chips on the market that will incorporate NFC along with Bluetooth, WiFi and other wireless technologies–likely within two or three years. Besides one or more of these combo chips expected from Texas Instruments, CSR, formerly known as Cambridge Silicon Radio, has said it would have such chips packing NFC available. Another supplier, Broadcom, is a member of the NFC Forum trade group, so it is expected to have a chip integrating NFC, as well. UK-based Innovision, which is among providers of IP for combining NFC with the combo chipsets, said it has development deals with at least five chipset suppliers, which it declines to name.

Budding Interoperability Problems?
While all this bodes well for prices and supply of NFC chips for device manufacturers, it also raises the prospect of interoperability problems. The NFC chips might not work with all contactless readers or RFID tags from different manufacturers or with other phones in peer-to-peer mode.

In the past, such other short-range wireless products as contactless payment cards, e-passports and Bluetooth accessories have experienced interoperability problems because of differences in timing, strength of the RF field or even simple-coding issues, said one source with a smart card chip supplier. The problems resulted from the lack of a strong certification process for some of the products and a “huge variety of implementations,” said the source.

Interoperability shouldn’t be a problem for NFC phones or other devices used for bank-issued payment applications, since standards, testing and certification from payment-industry organization EMVCo is designed to ensure interoperability between phones and readers.

But other applications and tag reading is another matter. Tags make use of NFC’s reader mode, enabling, for example, a user to tap an RFID chip embedded in a smart poster to transfer a URL or SMS code to the phone, which could then download an electronic coupon or updated bus schedule over the network.

The NFC Forum has defined specifications for various operations of tags and NFC chips and will certify compliance with the specifications for a number of these operations. That means NFC chip vendors, manufacturers of four tag types specified by the forum and other equipment suppliers will have to have their products tested to determine whether they follow the NFC Forum specs.

But they will not have to test whether their products work together. Forum compliance committee members debated whether to require the interoperability testing but decided it would add too much to costs, including travel to “plugfests,” where vendors meet to test their wares against others in the industry, committee co-chair Matt Ronning told NFC Times. Those events will be voluntary, said Ronning, who is director of engineering for the components solutions business division at Sony.

But he disagrees that more suppliers will lead to more potential interoperability problems.

“My opinion would be more vendors providing solutions is actually better,” he said. “The more people trying to make devices to a certain specification, the more you’ll be able identify problems in specifications. And we’ll have more devices we can test at compliance and interoperability events like plugfests.”

He noted that the forum does not draft specifications covering compliance or interoperability for NFC applications. So even if the devices work together well at the lower communication levels, they might still fail in the field unless other organizations step in, as EMVCo does for bank payment.

And the forum’s certification program will not cover such things as alignment of antennas connected to the NFC chips, at least not at first. That also could create problems when, say, a user taps his phone to enter a building. If the antenna isn't aligned properly, for some door readers it would work, others perhaps not.

In addition, NFC chips supporting the single-wire protocol would have be integrated with SIM chips from various suppliers. ST is the only supplier of both NFC and SIM chips in the current field of actual or prospective NFC chip vendors. That could smooth integration. But ST is not one of the top suppliers of SIM chips in the telecom industry.

CROWDED MARKET