Integrated Circuit: a miniaturized elecronic circuit (consisting mainly of semiconductor devices, as well as passive components) that has been manufactured in the surface of a thin substrate of semiconductor material.  Integrated circuits are also called chips, micro-chips or silicon chips. 

Most RFID chips consist of a digital logic function and an analog RF function combined on the same piece of silicon. The logic function can vary by application, in a simple tag it can be a state-machine which processes and store data in a fixed routine, and can be compared to a simple calculator.

In a contactless card or an active tag where more power is available the logic function can include a CPU and EEPROM which can programmed during manufacture or during use and is comparable to a scientific calculator. In both cases the chip can maintain data content when out of the RF field.   The analog function acts in two ways to transforms  the received RF signal into digital data or converting the digital data into a protocol and modulates the RF field, while at the same time in passive tags using the RF field to generate and manage the power supply voltage for the chip.

The IC is produced on silicon wafers, with several thousand ICs per wafer. It common for ICs to be programmed with their unique ID numbers at the wafer level, and in some cases with other data unique to each chip, such as encryption keys if required.

Abbreviation: IC