Impinj Stock

Impinj, Inc. (Impinj) engages in the development and sale of its products and services. The company uses a type of radio-frequency identification, or RFID technology known as RAIN for the ubiquitous, wireless item-to-cloud connectivity. The company sells a suite of products that it and its partner ecosystem use to connect and deliver item data to enterprises. The company has enabled connectivity for more than 95 billion items to date, delivering item visibility and improving operational efficiencies for retailers, supply chain and logistics, or SC&L providers, restaurants and food-service providers, airlines, automobile manufacturers, healthcare companies and many more.

The Impinj platform wirelessly connects items and delivers data about the connected items to business and consumer applications. Impinj generates revenue from enterprise solutions that use its platform's constituent elements — endpoint ICs, reader ICs, readers, gateways, and test and measurement solutions — as well as from development, service and license agreements.

The company uses a type of radio-frequency identification, or RFID technology known as RAIN for the ubiquitous, wireless item-to-cloud connectivity. The company sells a suite of products that it and its partner ecosystem use to connect and deliver item data to enterprises. The company has enabled connectivity for more than 95 billion items to date, delivering item visibility and improving operational efficiencies for retailers, supply chain and logistics, or SC&L providers, restaurants and food-service providers, airlines, automobile manufacturers, healthcare companies and many more.

Impinj Platform

The company and its partner ecosystem build item-visibility solutions using products that it designs and either sells or licenses, including silicon RAIN radios; manufacturing, test, encoding and reading systems; and software and cloud services that encapsulate its solutions know-how. The company sells two types of silicon integrated circuit, or IC, radios. The first are endpoint ICs that store a serialized number to wirelessly identify an item. The company’s partners embed endpoint ICs into an item or its packaging. The ICs may also contain a cryptographic key to authenticate the item. The second are reader ICs that the company’s partners use in finished readers to wirelessly discover, inventory and engage the endpoint ICs. Those readers may also protect an item or consumer, for example by authenticating the item as genuine or privatizing the item by rendering the endpoint IC unresponsive without the consumer first providing a password. The company’s manufacturing, test and encoding systems enable partner products and facilitate enterprise deployments. The company’s reading systems comprise high-performance finished readers and gateways for autonomous reading solutions. The company’s software and cloud services focus on solutions enablement.

The company sells its products, individually or as a whole platform offering primarily with or through its partner ecosystem. That ecosystem comprises original equipment manufacturers, or OEMs, tag service bureaus, original device manufacturers, or ODMs, systems integrators, or SIs, value-added resellers, or VARs, independent software vendors, or ISVs, and other solution partners.

The company’s silicon radios follow the RAIN industry’s air-interface standard for their core functionality. The company creates partner and enterprise preference for its radios and solutions by adding differentiated features into its products, and supporting those features across its platform, to deliver solutions capabilities and performance that surpasses mix-and-match solutions built from competitor products.

The company is a leader in the RAIN market. The company spearheaded developing the RAIN air-interface standard, lobbied governments to allocate radio spectrum and cofounded the RAIN industry alliance that today has more than 150 member companies. The company’s industry uses free spectrum in 81 countries encompassing roughly 95% of the world’s GDP. The company’s success derives from the capabilities and performance of its enterprise solutions, and the visibility those solutions give enterprise to items they manufacture, transport and sell. RAIN market adoption has historically been slower than the company and industry sources have anticipated.

Endpoint ICs

The company’s endpoint IC product family comprises miniature radios-on-a-chip that sell for pennies yet can wirelessly connect almost any item. Each IC attaches to a host item and includes a number to identify the item. The IC may also include or enable features such as user data storage, security, authentication, loss prevention, privacy protection and value-added Impinj custom capabilities, all accessible by the company’s platform.

The company’s OEM partners typically attach an endpoint IC to a printed or etched antenna on a paper or PET backing, then cover the composite inlay with a paper face to form a tag. More recently, some of the company’s partners have begun embedding the endpoint IC into wire, thread or woven tags. Enterprises attach or embed the tags onto or into items in retail, SC&L, healthcare, automotive, sports, industrial and manufacturing, consumer experience, datacenter, travel, food, banking and other use cases. Regardless of the method by which the company’s partners attach or embed an endpoint IC onto or into an item, it refers to an IC and its host item as an endpoint.

Systems

The company’s systems comprise its reader ICs; manufacturing, test, encoding and reading systems; and software and cloud services. The company and its partners engineer solutions that typically include several of its systems products and endpoint ICs, and often its entire platform. The company and they sell those solutions to enterprise end users.

The company’s reader IC product family comprises multiple products, tiered by performance and functionality, that its OEM and ODM partners use in their mobile or handheld readers, fixed readers, gateways, appliances and other edge devices. The company offers easy-to-use application programming interfaces, or APIs, development environments, sample code, drivers and libraries to facilitate partner reader development. The company leverages its solutions learnings to continually improve the firmware in its reader ICs. The company sells its reader ICs for tens of dollars.

The company’s reader product family comprises multiple finished products tiered by performance and functionality. The company’s gateways integrate its readers with beamforming antennas to electrically steer a radio beam like a radar, locating and tracking items in one or two dimensions. The company’s readers and gateways are easy to deploy and use, can be powered via power-over-Ethernet, or PoE, and are certified for operation in more than 40 countries. They wirelessly provide power to, and communicate bidirectionally with, endpoint ICs on host items. They also read, write, authenticate and engage the endpoint ICs on those items.

The company’s readers and gateways include software and algorithms that allow it and its partners to solve enterprise business problems, such as retail self-checkout and loss prevention. The company’s software and algorithms run either on its readers and gateways or partly on them and partly on partner devices. The company also sells readers and software to encode endpoint ICs. The company sells its readers and gateways through distributors, SIs, VARs and solution providers for hundreds to thousands of dollars.

With its acquisition of Voyantic Oy, the company sells test and measurement solutions. Finally, the company also offers a cloud service to authenticate items.

Retail

Retailers, both traditional brick-and-mortar and online, apply billions of RAIN tags each year, historically to retail apparel and footwear but today, increasingly, to retail general merchandise, such as home goods, health and beauty items, tires, toys, sporting goods, automotive parts, consumer electronics and other items. Retailers can obtain these benefits using the company’s platform:

In-store Inventory Visibility: The company’s platform delivers accurate and timely data about a retailer’s product inventory, allowing retailers to reduce inventory and increase same-store sales by ensuring each store is properly stocked and allowing staff to focus on customers rather than on inventorying or finding items.

Omnichannel Fulfillment: The cornerstone of successful omnichannel fulfillment is inventory visibility in stores and warehouses. The company’s platform can deliver that visibility and thereby facilitate online sales, including online purchasing with pickup in store. It can also help retailers sell from any retail location, confidently sell to the last item and facilitate seamless returns.

Self-checkout and Loss Prevention: Consumer self-checkout is a clear opportunity for retailers looking to modernize their in-store experience. The company’s platform can enable both – self-checkout via sales terminals that read endpoint ICs on item, and loss prevention that scans the RAIN tags for unsold items leaving the store. As its inlay partners focus on embedding RAIN tags directly into items, the company focuses on key innovations like its patented Protected Mode that allows a tag to require a PIN for post-point-of-sale readability, enabling loss-prevention solutions to focus on unsold items while satisfying General Data Protection Regulation, or GDPR, and similar consumer privacy requirements.

Supply Chain and Logistics

SC&L includes shipping companies, third-party logistics providers, postal organizations, captive distribution and other organizations that transport products worldwide. SC&L organizations are increasingly demanding real-time shipping data to virtualize, analyze and optimize their operations. SC&L companies can obtain these benefits using the company’s platform:

Shipment Verification and Parcel Tracking: The company’s platform provides real-time data about items passing through dock doors to the systems that run shipping and receiving, helping SC&L companies reduce mistakes, automate processes and drive operational efficiencies.

Conveyor Sortation: The company’s platform enables high-speed, real-time, not-line-of-sight reading of packages moving along conveyors, improving sortation accuracy and reducing shipping errors.

Returnable Transit Item, or RTI, Tracking: By tagging RTI containers, the company’s platform can reduce RTI loss and ensure SC&L companies have the RTI containers they need.

Asset Management: The company’s platform enables automated asset check-in/out procedures and location monitoring, reducing loss and improving efficiencies and maintenance-schedule compliance.

Other Industries

These other industries can also obtain benefits using the company’s platform:

Automotive: Car manufacturers use the company’s platform to track and verify automotive parts for vehicle assembly, reducing mistakes and labor costs and improving operations.

Aviation: Luggage tags that incorporate the company’s endpoint ICs help airlines give passengers real-time information about their checked bags, as well as reduce lost bags.

Banking: Banks use the company’s endpoint ICs for money bundles and to track information-technology assets.

Datacenters: Datacenters use the company’s platform for asset tracking.

Food: The company’s reader ICs track syrup cartridges for replenishment in soda fountains. The company’s endpoint ICs track meat, fish and fresh produce for freshness, as well as inventory visibility.

Healthcare: Hospitals use the company’s platform to track assets and manage patient and clinician workflows. Partner products built on the company’s platform include RAIN-enabled medical cabinets and refrigerators.

Industrial and Manufacturing: Industrial companies track components to increase manufacturing productivity and reduce shipping errors. Manufacturers use the company’s platform to track assets and tools, reducing errors and increasing calibration compliance.

Linen and Uniform Tracking: Laundry providers embed washable tags into their linens and uniforms for automated sortation.

Sports: Marathons and other foot races track runners via the company’s endpoint ICs in race bibs. Golf venues score participants’ shots via the company’s endpoint ICs inside golf balls.

Travel: Driver licenses in some states in the United States include the company’s endpoint ICs to speed border crossings. Fueling stations use vehicle windshield tags to enable automatic and cashless fueling.

Growth Strategies

The key elements of the company’s strategy are to continue developing solutions to previously unsolved enterprise business problems; continue investing in endpoint IC and reader IC performance, differentiated features, cost reduction and platform integration to win opportunities across markets and geographies; and continue investing in differentiated product capabilities, cloud services, solutions software and algorithms, and test and measurement solutions to enhance its platform’s reach and breadth and enable new use cases and recurring-revenue opportunities.

Sales and Marketing

The company has a worldwide sales team with expertise in enterprise solutions, endpoint ICs, reader ICs, readers and gateways, and test and measurement solutions. The company primarily sells through its global ecosystem of hundreds of partners as follows:

Endpoint ICs: Directly to inlay and tag OEMs.

Solutions: Directly to a small number of lighthouse enterprises, servicing the rest of the market with and through partners.

Reader ICs: Through distribution to handheld- and fixed-reader OEMs and ODMs.

Readers and gateways: Through distribution to solutions providers, VARs and SIs.

Test and measurement solutions: Directly to inlay and tag OEMs, certification bodies and enterprises.

Cloud services: Access-based services.

The company’s business development, product marketing, technical and systems engineers actively engage those enterprises and partners to create awareness, joint solutions, joint selling and sales enablement. Avery Dennison Corporation, or Avery Dennison, and Arizon RFID Technology (Yangzhou) Co., LTD., or Arizon, purchase its endpoint ICs for their inlay and tag products.

Manufacturing

Taiwan Semiconductor Manufacturing Company Limited, or TSMC, manufactures the company’s endpoint IC wafers primarily in Taiwan and has been its supplier since 2003. The company orders endpoint IC wafers on a purchase-order basis and do not have a long-term supply agreement with TSMC. The company tests the wafers primarily in Asia. The company uses multiple subcontractors to post-process the wafers, including Stars Microelectronics (Thailand) Public Company Limited, or Stars, Chipbond Technology Corporation, or Chipbond, and Unisem Group, or Unisem.

Plexus Corp., or Plexus, manufactures the company’s readers and gateways in Asia. The company manufactures its test and measurement solutions in Finland, at Voyantic Oy, which it acquired in April 2023. This acquisition added label design, manufacturing and test systems to the company’s platform offering.

Intellectual Property

As of December 31, 2023, the company’s intellectual property portfolio included 302 issued and allowed U.S. patents, five issued international patents, 16 pending U.S. patent applications and seven pending international patent applications. Of its 293 utility patents, 16 will expire in 2024 and of the company’s nine design patents, six, will expire in 2024.

The company has entered into licensing, broad-scope cross licensing and other agreements authorizing it to use or to operate within the scope of patents and IP owned by third parties. The company has licenses to third-party IP it uses in its products. As another example, by participating in developing GS1 EPCglobal protocols, such as the RAIN radio protocol, the company agreed to license those of its patents necessary to practice those protocols on a royalty-free basis to other GS1 EPCglobal members, subject to reciprocal royalty-free rights from those members. By participating in developing International Organization for Standardization, or ISO, standards, the company agreed to grant to all users worldwide a license to those of its patents necessarily infringed by the practice of several ISO standards, including RAIN and non-RAIN, on reasonable and nondiscriminatory terms, here again subject to reciprocity.

The company owns several trademarks and develops names for its new products and secure trademark protection for them, including domain name registration, in relevant jurisdictions.

Alliances and Standardization

The company’s platform uses the RAIN technology it pioneered. The company spearheaded developing the RAIN radio standard, lobbied governments to allocate frequency spectrum and, along with Google, Intel and Smartrac, cofounded the RAIN Alliance. The Alliance is a global organization promoting the universal adoption of RAIN technology and solutions, with more than 150 members as of December 31, 2023.

The company, its enterprise end users, partners and competitors developed the RAIN radio protocol, whose technical name is EPC Radio-Frequency Identity Protocols Generation-2 UHF RFID (standardized as ISO/IEC 18000-63 and known colloquially as Gen2) in 2004, with it as editor. The company’s community delivered a backward-compatible update in 2013, again with it as editor. As of December 31, 2023, the company’s community was nearing completion of yet another update, again with it as an editor. The company’s industry uses the RAIN radio protocol nearly exclusively.

By participating in GS1 EPCglobal, which produced Gen2, and ISO, which ratified 18000-63, as well as in other standards bodies, the company agreed to license certain necessary patents.

Government Regulations

The company certifies its readers and gateways to Federal Communications Commission regulations to operate in the United States and its territories. The company’s readers and gateways are certified for operation in more than 40 countries worldwide including the United States, Canada, Mexico, China, Japan, South Korea and all of the European Union.

Competition

The company’s primary competitors are:

Endpoint ICs: NXP B.V., or NXP, EM Microelectronic, Kiloway, Quanray, Shanghai Fudan Microelectronics Group, Alibaba and Alien Technology Corporation, or Alien.

Reader ICs: Phychips Inc, Shanghai Fudan Microelectronics Group and MagicRF.

Readers and gateways: Zebra Technologies Corporation, or Zebra.

Test and measurement systems: CISC Semiconductor GmbH, or CISC.

History

Impinj, Inc. was founded in 2000. The company was incorporated in Delaware in 2000.