Texas Instruments Inc. reported Tuesday an agreement with Impinj Inc. to purchase the fabless semiconductor company's Monza radio frequency identification Gen 2 chips to build into its initial production of RFID inlay and strap products.

Monza is the first RFID-certified chip that meets the Gen 2 standard approved late last year by EPCglobal Inc., a non-profit consortium spearheading adoption. "We've been working on interoperability issues with Texas Instruments for a while, although we didn't know where that might lead," said Bill Colleran, Impinj president and chief executive officer.

Price and quantities ordered by TI weren't disclosed, but Colleran defined the deal as large, a distinction he identified as between five and 10 million units per quarter. That's considering Impinj will ship more than 50 million Monza RFID chips this quarter to between 15 and 20 customers, including Alien Technology, Avery Dennison, Hana RFID, IER, KSW Microtec AG, Precisia, RF IDentics, RSI ID Technologies and UPM Rafsec.

Taiwan Semiconductor Manufacturing Co. Ltd. in Taiwan manufacturers the Monza silicon chip for Impinj, which does the design, testing, and quality control for the wafers. The chips have been available since July. They are sold to Texas Instruments to i nsert in the inlay. The tag also contains the antenna on a substrate that gets delivered to a label maker. Texas Instruments owns its own inlay assembly plant and can ensure products are compatible.

Texas Instruments sells inlays and straps, components consisting of antennae and silicon that are i nserted into an RFID label. "The initial production of inlays and straps are using Impinj silicon," said Enu Waktola, marketing manager for the retail supply chain at Texas Instruments. "It's an interim step to accelerate availability of Gen 2 products to label converter customers and hardware partners that needed tags to develop systems."

The Gen 2 chip transmits RF signals in the 900-MHz frequency and is designed to operate worldwide. Waktola said Texas Instruments "fully expects to use our own silicon on our own parts." Texas Instruments is developing its own RFID Gen 2 chips, with plans to ship production quantities between January and March in 2006. Working with Impinj today gives Texas Instruments an earlier entrance into the market.