BERLIN, Germany - August 21, 2010 - The production of Radio Frequency Identification chips (RFID), an integral element of the new generation of German identity cards, has started after the government gave a 10 year contract to the chipmaker NXP in the Netherlands. Citizens will receive the mandatory new ID cards from the first of November.

The new ID card will contain all personal data on an RFID security chip that can be accessed over a wireless connection.

The new card allows German authorities to identify people with speed and accuracy, the government said. These authorities include the police, customs and tax authorities, and local registration and passport granting authorities.

German companies like Infineon and the Dutch NXP, which operates a large-scale development and manufacturing base in Hamburg, Germany are global leaders in making RFID security chips. The new electronic ID card, which will gradually replace the old mandatory German ID cards, is one of the largest scale rollouts of RFID cards with extended official and identification functionality.

The card will also have extended functionality, including the ability to enable citizens to identify themselves in the Internet by using the ID card with a reading device at home. For example, after registering an online account bonded to the ID card, users are able to shop securely online, download music, and interact with government authorities online.

Biometric passports in a number of countries are equipped with RFID chips, containing a digital picture and fingerprints, and have been around for nearly 5 years after the United States required such passports for any person entering the country.

However, there is a great deal of concern that the use of RFID chips will pose a security or privacy risk, however.  Such concerns by civil libertarians have been mostly ignored or disregarded by government officials, even though the insecurity of information contained on RFID chips is subject to being affected by outside influences.

Early versions of the electronic passports, using RFID chips with a protocol called "basic access control" (BAC), where successfully hacked by university researchers and security experts.