There's an adage in the computer industry that "memory is cheap."  Not so with the integrated circuits (ICs) used in RFID transponders.  Memory size is a significant factor in the cost of a chip: the more memory, the larger the chip, the greater the cost.

The quest for less expensive ICs may benefit from an improved wafer manufacturing machine announced 12 July 2005 by Dutch chip equipment maker ASML. According to a Reuters report, the new machine will enable chip makers to make 30 percent thinner electronic circuits, which it hailed as the biggest improvement in years.  The reduced feature size and circuit thickness would allow manufacturers to fit more ICs on a single wafer, reducing the cost of manufacturing a single wafer.  For RFID, it could mean more memory for nearly the same price as current chips.

The new machine was announced at the Semicon West trade show in San Francisco where ASML's Executive Vice President Marketing and Technology Martin van den Brink said it will be ready for delivery to multiple customers in the second quarter of 2006.

The improvement isn't exactly cheap, however.  The machine may cost as much as 30 million euros (approximately $36 million US).  As a result, it might take some time for cost savings to trickle down to end users.