Philips RFID Chips Certified for EPC Gen2 Standard; Deployment of Gen2 Standard Enables Global Interoperability and Performance Enhancements in Supply Chain Applications

Royal Philips Electronics (NYSE:PHG)(AEX:PHI) is thefirst major supplier to have its RFID chips certified by EPCGlobal asGen2 compliant, according to the Metlab Conformance Test. The PhilipsUCODE EPC Gen 2 chips are available now. EPC Gen 2 is widely supportedby end-users and manufacturers within the RFID industry and willfacilitate the widespread deployment of RFID technology - especiallyin logistic applications and the retail supply chain. With broaddeployment of the EPC standard, different RFID labels and readers arefully interoperable in different global regulatory environments. As aresult, suppliers and manufacturers throughout the supply chain canrealize significant improvements in performance, cost and reliabilityas well as easy migration to future EPC classes.

Retailers such as METRO Group have already committed toimplementing Gen 2 RFID technology in their supply chain managementsystems. "RFID has already increased transparency of our processes andtraceability of objects within our supply chain. Philips UCODE EPC G2compliance will enable the METRO Group to enlarge our existing RFIDrollout," said Dr. Gerd Wolfram, Managing Director of MGI METRO GroupInformation Technology GmbH. "Retailers and suppliers want - and need- a single, globally-accepted standard that will delivercost-effectiveness and full interoperability which is supported bylarge technology providers such as Philips."

"We want to ensure that adopters of RFID achieve a seamlessmigration from the previous infrastructure while capitalizing on theglobal interoperability and increased performance that Gen 2 offers,"said Christophe Duverne, Vice President, Marketing and Sales,Identification, Philips Semiconductors. "Philips and its Gen 2 RFIDsolutions are answering the demand of the fast moving consumer goods(FMCG), pharmaceutical, apparel and many other industries. Compliancewas the final milestone we needed to pass prior to starting volumeproduction of our Gen2 chips, and we're pleased to be the first majorsupplier to deliver Gen2 chips to our customers."

Philips has been the leading provider of RFID ICs for over twentyyears, selling more than one billion RFID chips to-date worldwide.Philips is an advocate of open standards and is working closely withindustry partners such as EPCglobal to stimulate market adoption.Philips has driven a Gen2 Task Force program together with ASK, AveryDennison, Checkpoint Systems, Deister, Feig, Omron, Rafsec, SAMsys,Symbol Technologies, Thingmagic and X-ident technology to develop anend-to-end Gen2 RFID solution. Wide availability of EPC Gen 2 siliconwill greatly benefit the RFID tag value chain as it prepares for highvolume orders in 2006. Suppliers, multinational retailers andmanufacturers worldwide have been mandated to meet the Gen 2compliance and therefore a significant uptake is expected.

Philips UCODE EPC G2 chips feature a one-time programmable memoryfor the 96-bit EPC, covers all mandatory commands and provides aselection of optional commands as specified in the EPCglobal Class 1Gen 2 standard. The chip uses an anti-collision algorithm that enablesthe reading of up to 1,600 labels per second under current USregulations, and up to 600 labels per second under current Europeanregulations. The EPC Gen 2 standard also allows for read/write fieldprogrammability, faster tag read/write rates and operation in densereader environments.

Availability

The UCODE EPC G2 chip is available now. Compatible products basedon the UCODE EPC G2 IC are available from the member companies of thePhilips Gen2 Task Force program.

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands (NYSE:PHG) (AEX:PHI)is one of the world's biggest electronics companies and Europe'slargest, with sales of EUR 30.3 billion in 2004. With activities inthe three interlocking domains of healthcare, lifestyle and technologyand 160,900 employees in more than 60 countries, it has marketleadership positions in medical diagnostic imaging and patientmonitoring, color television sets, electric shavers, lighting andsilicon system solutions. News from Philips is located atwww.semiconductors.philips.com.