SAN JOSE, Calif.—In a warehouse demo facility at its headquarters here, startup Altierre Corp. maintains a mock supermarket that could easily be mistaken for the real thing.

The facility is complete with shopping carts, aisles stocked with goods, and Altierre’s flagship product—a wireless LAN based on a system of RF tags, LCD displays, servers, access points and wireless stations, which controls and updates prices for each item.

Replacing the low-tech paper display tags used by grocery stores to display prices and marketing messages with electronic shelf labels may seem at first glance like an unnecessary—and expensive—application of technology. But Altierre executives say supermarkets and other large retail operations invest thousands of man hours in the inefficient process of manually replacing paper tags on store shelves to reflect updated prices. Using Altierre’s platform, a supermarket employee can update prices throughout the store in a matter of minutes with a few keystrokes, according Sunit Saxena, the company’s chairman and CEO. He argues that the system saves time and labor costs, reduces human error and is “green,” saving billions of sheets of paper each year. Altierre has a shopping cart in the demo room overflowing with paper price tags, a compelling visual that attests to the amount of paper that can be saved in a single supermarket.

The system also brings a whole new potential for marketing advantages, according to Saxena. Pushing a shopping cart through the demo room, he notes that potential for a readout mounted on the cart which could display advertisements, alerts about what items are on sale or nutritional information about products in the immediate vicinity of a shopper’s current location.

“People today are so pressed for time,” Saxena says. “They are rushing through the store to pick up a few things for dinner on their way home for work. The system could give them the information they need to allow them to get in and out faster.”

With the ability to dynamically change pricing and sale information tags much more quickly, supermarkets could also run different specials on products in a store at different times of the day, enabling them to appeal to target demographics, according to Saxena. In the middle of the day on weekdays, when more senior citizens tend to shop, stores could run specials on items they tend to buy for a few hours, he notes as an example.

Altierre says it has been co-developing its wireless dynamic pricing solution under signed agreements with several of the top 10 grocery chains in the U.S., reportedly including Safeway Inc. Altierre has raised a total of $60 million in venture funding, including an $8 million Series C round last May that included the D. E. Shaw group and Labrador Ventures.

Saxena boasts more than 27 years of experience, much of it in the semiconductor industry, including high-level executive positions at Alliance Semiconductor and Sandcraft Inc. He co-founded Altierre in 2003 with veteran software engineer Anurag Goel, now Altierre’s chief technology officer and vice president of software development. But Saxena says the two men conceived of the idea years before.

Initially, the two men sought to purchase the hardware needed to implement their plan from third parties. But they quickly realized that the type of high-reliability, low-power, low-cost chips they required were not available as an off-the-shelf solution.

“We realized pretty quickly that we were going to have to make everything from scratch,” Saxena says.

So, tapping into his experience in the semiconductor industry, Saxena put together a design team to create Altierre’s own communications controller and display driver chips. Both devices are implemented in 0.18 micron CMOS with operating voltage of 3V and clock frequencies of less than 1 Mhz.

The chips were designed to require a minimum number of external components, resulting in lower bill-of-materials cost and smaller board area, according to Altierre. Using a mature process technology also saved costs and offered higher yield, the company said.

With a goal of five-year battery life for the devices powering dot matrix LCD display screens, the Altierre team applied power-saving criteria at all hierarchies of the design, including clock gating, dynamic voltage switching, dynamic frequency scaling, low-power SRAM compiler, low-voltage operation and low power standard cells, according to the companies. Clock frequencies were intentionally kept as low as possible, and Altierre uses a proprietary LCD addressing scheme that consumes very low power.

Saxena says the past five years for Altierre have involved a “steep learning curve and a lot of water under the bridge.” But, he says, the company is now poised to capitalize on the technology it has developed. It estimates that the potential market for supermarket chains alone could be worth $10 billion, and the company believes it will eventually garner interest from other verticals. Down the road, it plans to migrate its chips to 0.13 micron technology.