Omron Corp., a $5.5 billion Japanese manufacturer of automation and sensing products, is investing $20 million during 2005 and 2006 to seize a larger share of the global market for radio frequency identification (RFID) technology.

The company is focusing on RFID label inlay and reader products for Wal-Mart Stores Inc. suppliers, specifically in the United States. Wal-Mart has already mandated that its largest 100 suppliers ship RFID-equipped goods. The company's next-largest 200 suppliers are required to comply in 2006.

Wal-Mart is not the only retailer in the United States requiring suppliers to put RFID tags on goods being shipped to distribution centers. Best Buy Inc., Target Corp., and Albertson's Inc., as well as pharmaceutical and consumer packaged goods companies, and the U.S. Department of Defense, have all established RFID mandates for suppliers.

Omron is preparing to go up against companies such as Sun Microsystems, which released last month an RFID Industry Solution for Drug Authentication package for tracking the shipment and pedigree of pharmaceuticals.

The U.S. Food and Drug Administration is pressuring distributors and manufacturers to implement RFID technology by 2007 to guard against counterfeit drugs. In December 2004, the FDA set guidelines for pharmaceutical companies to follow when setting up systems as drugs move through the supply chain.

Omron's RFID products sold in the United States are designed and manufactured in Japan. Initial U.S. investments have included a headquarters and training center for a division in Schaumburg, Ill. A testing center will open in nearby St. Charles, Ill. to help customers and systems integrators validate applications.

Marketing and sales in Schaumburg will support sales and technical support teams serving companies in the United States. Omron then plans to expand and create similar operations in Europe and China.