The Forum - 10/10/2003
Alien ready for step one of expansion
By Mike Nowatzki
mnowatzki@forumcomm.com
It's one thing to recognize a new wave of technology.
It's another to ride the front of that wave.
And, according to North Dakota State University President Joseph Chapman, that's exactly what the region will be doing Monday when Alien Technology Corp. breaks ground in the NDSU Research and Technology Park.
The Fargo facility is believed to be the world's first mass-scale manufacturing plant for radio-frequency identification tags.
RFID tags consist of a small integrated circuit attached to an antenna. By allowing the wireless tracking of inventory, the electronic bar-code type device is expected to revolutionize the supply-chain and retail industries.
"This is the beginning step in the commercialization of a major new technology that will have an impact around the globe," Chapman said Thursday during his State of the University address. "North Dakota is on the ground floor of a tremendous opportunity."
Alien, based in Morgan Hill, Calif., announced on July 10 its decision to expand to Fargo.
However, until recently, the company released few details, as state and local agencies prepared a $35.8 million financing package.
Alien CEO Stav Prodromou is expected to speak extensively about the project Monday. He'll be joined by Chapman, North Dakota Gov. John Hoeven, U.S. Sen. Byron Dorgan and Fargo Mayor Bruce Furness at 2 p.m. in the park's Research I building.
Here's what the company has divulged so far:
Monday's groundbreaking begins the first phase of Alien's expansion to Fargo.
This phase consists of a 47,250-square-foot building with one assembly line capable of producing 10 billion RFID tags per year, said Kyra Whitten, Alien's director of marketing communications.
By comparison, the Morgan Hill facility can produce 1 billion tags per year using the company's high-speed Fluidic Self-Assembly process.
So far, that's been enough to fill orders for RFID pilot projects being conducted by companies like the Gillette Co., which ordered 500 million tags in January.
Alien is counting on Wal-Mart's requirement that its top 100 distributors begin using RFID technology by January 2005, and that its other suppliers use it by the end of 2006, to boost demand for the technology.
The Fargo facility will meet that demand, with production starting in early to mid-2005.
"By 2006, 2007, we're really going to see it running at significant capacity, and that's when we're going to see it having about 300 employees," Whitten said.
Hiring should begin in late 2004 or early 2005.
The Fargo plant will be a "fab-less" manufacturer of RFID tags, meaning Alien will contract with another company to manufacture the integrated circuits. An IC fabricator can cost $1 billion to $2 billion, Whitten said.
Alien will assemble the circuits into the RFID tags and make the actual tags.
The second phase of the Fargo plan will add another 10-billion-unit assembly line and be larger than the first phase, Whitten said. But how much larger, and when it gets built, will depend on market demand, she said.
Officials say the Fargo site could become an economic development hub, spinning off or attracting other companies in the RFID field.
"If you're going to start a company in RFID, why not do it in North Dakota?" said Tony Grindberg, director of the research park. "I know that's a broad statement, but people have already been asking about it."
"We're very confident that this technology is coming, and we're going to be well-positioned to grow with it," he said.
Readers can reach Forum reporter Mike Nowatzki at (701) 241-5528
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