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Hitachi in the money with tiny chip?

The company introduces a chip that can be woven into paper money to help identify counterfeits--a development that may have broad implications.

Hitachi has developed a chip that could be woven into paper money to help identify counterfeits and could also have wide ramifications for identification and surveillance technologies.

The chip, called Mew, measures just 0.4mm on a side and stores information such as identification and security codes. Most identity chips are currently several millimeters on a side. Mew includes 128 bits of read-only memory (ROM) and RF wireless circuitry that allows it to transmit over a distance of about 12 inches. If the chip were inserted in money, a reader unit would be able to instantly detect authentic bills.

While the chip currently requires a reader unit to work, its size carries big implications for the future of identity technology. For example, chips could be implanted into all paper money and be connected wirelessly to the Internet so that authorities would be able to monitor the movement of all cash. Such chips could also be embedded in other consumer products to track them in the event of theft.

Hitachi says it is considering adding rewritable memory to the device, but for the moment is using ROM to prevent data falsification.

Hitachi will begin shipping samples of the chip this autumn and will start marketing it next spring. Mew Solutions, the venture formed by Hitachi to promote the chip, expects sales of $145 million by 2005.

Staff writer Matthew Broersma reported from London.