Nordic Semiconductor

Investor Presentation • Sep 26, 2024

Vegard Wollan | CEO

Driving growth, restoring profitability

Global leader in wireless connectivity solutions

Simplifying lives through all things connected

Building on established strengths 40 years of innovation in ultra-low power wireless

Recognized leader in wireless connectivity

• § Feature-rich, powerful, energy-efficient multiprotocol product range
• § Unified software solutions
• § World-leading engineering and support
• § Dual go-to-market approach, engaging both key customers and the broad market
• § Bringing leading-edge innovation to standard products
• § Devoted customer base, high customer satisfaction

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A complete connectivity solutions provider

Wide range of connectivity technologies

Broad product portfolio

nRF Connect SDK

Driving growth and restoring profitability On our way towards realizing overarching goals

Market adaption, strategic focus, organization and rightsizing Acknowledging our challenges

• § Too slow to adapt roadmaps to changing customer demands
• § Inefficiently organized in some areas, failing to extract full value of engineering capabilities
• § We have been set up for much higher volumes, with outsized cost base through market downturn

Launched Nordic 2.0

A change plan addressing three main purposes

Sharpened strategic focus and priorities

Enhanced engineering execution

Strengthened accountability

Nordic 2.0 implications Bringing strategic clarity and new ways of working

Strengthened organization

• § Executive management team bolstered with seasoned semiconductor professionals
• § Leadership with decades of experience

Mandate: Sharpen strategic focus and strengthen execution Objective: Drive growth and restore profitability

Four new business areas with high level of autonomy and accountability

Four major trends defining our opportunity

Consumer Work, Play, Live

Staying connected, at work, at home, and on the go ++

Connected health disruption

Medical monitoring, drug delivery, health trackers ++

Industrial IoT disruption

Machine learning at the edge

Automation, asset tracking, infrastructure, agriculture ++

Secure real-time data delivery demands smart edge devices

Three keys to reach target level profitability

Drive growth

• § Capitalize on upcoming product launches
• § Sharpen focus on select growth segments

Support gross margins

• § Transition to lower-cost production platforms
• § Regain traction in broad market

Contain costs

• § Continuous cost control
• § Organized to handle significantly higher volumes

Early-stage Scale-up Established

Business units at very different stages Different business maturities and development timeframes

Innovation in existing roadmaps and new opportunities

Early-stage Scale-up Established

Short-range Healthy market outlook for our main engine

Serviceable markets across technologies*

• § Industry analysts expect 20%+ growth for Bluetooth Low Energy and Thread
• § Allow for cyclicality and non-linear growth, depending on economic developments

Regaining traction in the broad market

• § Dual customer approach targets both high-volume customers and broad market
• § Developing products with global key customers
• § No custom silicon our innovations are available to broad market as standard products
• § A key priority to regain traction in the broad market

Revenue composition and concentration

Defining new era with nRF54 Nordic's next generation SoCs

• § Groundbreaking technology unlocking new applications and business opportunities
• § Outclassing the competition on performance and power consumption!
• § Enables a roadmap with launch of 2-4 new product families every year

Early-stage Scale-up Established

Ramping nRF54 over the coming years Allow time for customer design-ins and commercial scaling

Short-range revenue composition, illustrative Short-range

outlook

Ambition to grow faster than our markets over time, driven by new product launches

Modest growth with only limited effect of nRF54 in 2025

Growth set to accelerate from 2026 onwards Proprietary

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Long-range Sharper focus on select target markets

Nordic aims to capture a significant share of our Units, million focus markets

Asset tracking: Market set to increase sixfold over next five years

Metering: Cellular IoT set to become a more dominant technology

Industrial IoT: Remote sensing and control transitioning to Cellular IoT as coverage and price points improves

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Launch of nRF9151 Setting a new standard

• § Lower power, smaller size, and lower cost
• § US tariff-free country of origin
• § Adding satellite-capabilities, enabling back-up coverage over satellite
• § Roadmap to further improvements in performance, features and cost

Early-stage Scale-up Established

Target profitability in Long-range in 2028

What will it require?

• § Establishing a revenue base >USD 100 million, through market penetration of asset tracking, metering and industrial IoT
• § Successful roadmap execution and product introductions, to access larger parts of market, drive growth and strengthen gross margins
• § Cost containment

Wi-Fi Ability to differentiate will be key

§ Establish USD >50 million revenue base and reach profitability by 2028

Key success factors going forward:

• § Increase customer conversion to nRF7000
• § Launch nRF71 Series to capture the Wi-Fi SoC market for IoT – leveraging 22nm, 'best-in-class' power and radio, ample memory, advanced security and peripherals, and AI/ML accelerator

Early-stage Scale-up Established

0 200 400 600 800 1000 1200 2024 2029 Select Wi-Fi target markets Financial targets Units, million

Target markets: Embedded Wi-Fi in Smart Home and Industrial IoT, Consumer/Wearables, Home Entertainment/ Smart Cameras

PMIC End-to-end low-power wireless IoT

Financial targets

§ Establish USD >50 million revenue base and reach profitability by 2028

Key success factors going forward

• § Expand addressable market with portfolio expansion
• § Increase conversion rates with existing customers
• § Win designs with key customers
• § Establish PMIC product line enabling control of entire energy path from battery to antenna

Connecting a more sustainable world

• § Talent and innovation
• § Low-energy connectivity
• § Sustainable production
• § Value chain partners for resilience

Dual sourcing on modern 22nm nodes

Supply security is high on customers' agendas

§ Particularly for critical applications like Healthcare

Secured dual sourcing with two leading wafer suppliers

§ Future supply from both TSMC and Global Foundries from multiple geographical locations

Among the first to move to smaller 22nm nodes

• § Eliminates supply constraint issues
• § More transistors on the wafer, better performance and power efficiency

C.C. Wei, CEO TSMC (left), with Ole-Fredrik Morken, EVP Supply Chain, Nordic Semiconductor (right), Dresden, 20 August, 2024

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Group level ambitions

Group level ambitions Deliver average annual revenue growth above 20% through the decade Moving towards operating model profitability of ~25% EBITDA within five years

Our investment case Improving returns - unlocking value creation opportunities

Profitable growth outlook

Clear market leader in a recovering market