$20 Million Investment Signals Major RFID Growth Initiative

SCHAUMBURG, Ill.—Omron Corporation, a $5.5 billion Japanese manufacturer of automation and sensing products, will invest $20 million worldwide over 2005 and 2006 as a first step in seizing a larger share of the U.S. and global radio frequency identification (RFID) market.

The company's aggressive entry into the U.S. marketplace focuses on its RFID label inlay and reader products. It aims to take advantage of Wal-Mart Stores' RFID shipping tag mandate to its top 100 suppliers while leveraging Omron's (www.omronrfid.com) 20 years of global RFID product development and application experience.

Wal-Mart's RFID mandate now requires its largest 100 suppliers to put RFID tags on shipping crates and pallets. Starting in 2006, this mandate will be rolled out to Wal-Mart's next largest 200 suppliers.

Omron president and chief executive officer Hisao Sakuta, who has appointed himself as project leader, said "RFID is an important, global initiative which requires a large investment. I believe RFID could be a major growth engine for the company."

Sakuta said that certain market conditions in the U.S. and Omron's own history in RFID product development and testing are creating these opportunities. He added that applications involving Wal-Mart suppliers and others that focus on supply chain management are purely RFID-related and thus "will enable us to put to use our decades of experience in automation and sensing markets."

In addition to Wal-Mart suppliers, Omron's RFID's sales initiatives here include other mass retailers such as Best Buy and Target stores, electronics, pharmaceutical and consumer packaged goods companies and the U.S. Department of Defense, which itself has established RFID mandates for suppliers.

Omron RFID products sold in the U.S. are designed and manufactured in Japan. Initial U.S. investments have included a headquarters office and training center for the division in Schaumburg, Illinois, a Chicago suburb. A testing center to help customers and systems integrators validate applications will be opened in nearby St. Charles, Illinois. Marketing and sales operations in Schaumburg will support sales and technical support teams serving the entire U.S. Following this U.S. initiative, Omron RFID will expand and create similar operations on the