Intel has unveiled a low-cost, compressed chip that the company says can cut the costs of buying and using radio frequency identification (RFID) readers.

The chipmaker said the new Intel R1000 transceiver consolidates about 90% of the components in a typical RFID reader onto a single small chip.

The R1000 is 8mm by 8mm in size and can be implemented for a wide variety of applications, said Kerry Krause, Intel's director of marketing for RFID. He noted that the chip can be implanted on loading-dock doors, handheld devices, conveyer belts, forklifts and printers.

"It's quite versatile," said Krause. "It's highly integrated and flexible."

He said customers are designing it into a full range of RFID readers – from handheld devices that require close proximity to the tags as well as in high-performance devices that can do reads over longer distances.

Krause noted that most RFID readers are large and complex, and require hundreds of separate components to send and receive radio signals to and from RFID tags.

To date, he said, the cost, complexity and manageability of the RFID readers have been obstacles to widespread adoption of the technology. Krause suggested that the small chip is easier to manage and costs less to run because it requires less energy than most of today's devices. The small size could also drive mass production, which would further cut costs, he said.

The chip supports the EPCglobal Gen 2 standard RFID specification and is shipped with diagnostic and management software to ease widespread deployment.

The R1000 package also includes a software development kit that can be used to simplify the process of programming readers, and application plug-ins that can link R1000-based readers into back-end ERP systems, said Intel.

An Intel spokesman said the R1000 will be sold through distributors who will set their own prices, but it's generally expected that the chip will cost about $40 (£20.76).

Krause said the R1000 will go into volume production by the end of this quarter. Some customers will demonstrate prototypes of the readers at the upcoming RFID World conference scheduled to begin on 26 March in the US, he added.