Nordic Semiconductor — Earnings Release 2010

Jul 13, 2010

Nordic Semiconductor reports record financial performance in Second Quarter 2010

Nordic Semiconductor today announced its financial

results for the second quarter of 2010. The company

reported high growth in revenue, operating profit and

cash flow.

Q2 2010 financial highlights include:

- Total Revenue of MUSD 41.9 (MUSD 13.6)

- Operating Profit (EBIT) of MUSD 13.5 (MUSD 3.2)

- Order inflows of MUSD 59 (MUSD 19)

- Cash Flow from Operations of MUSD 9.4 (MUSD 4.8)

- Earnings per Share of USD 0.05 (USD 0.01)

"Nordic Semiconductor continues to strengthen its

leadership position within the market for ultra low-

power wireless solutions," commented Svenn-Tore

Larsen, Chief Executive Officer. "By focusing on the

needs of this market, the company has rapidly

increased its sales while maintaining a lean and

highly effective organization. All areas of our

operations are performing very well, from sales and

customer support to the development of our next

generation of wireless solutions."

Revenue growth

Group revenue in Q2 2010 was MUSD 41.9, an increase

of 209% from the prior year. The PC / Media

controller business segment grew by 218% during Q2

2010 to MUSD 31.2, and represented 74% of the

company's total revenues. The company notes that much

of this revenue increase was driven by the ongoing

conversion of wireless PC Peripherals vendors from

older 27 MHz radio frequency technology to Nordic's

2.4 GHz components.

"Wireless PC peripherals manufacturers worldwide are

today adopting Nordic's 2.4GHz technology due to its

performance advantages and low energy requirements,"

explained Larsen. "Our system-on-chip solutions and

reference designs offer excellent value to vendors

looking to upgrade their products to the latest 2.4

GHz wireless solutions without the challenge and risk

of integrating components from multiple suppliers."

Operating profit and cash flow

Nordic Semiconductor's revenue growth resulted in a

strong improvement in profitability and cash flow.

Operating profit (EBIT) increased to MUSD 13.5 from

MUSD 3.2 in Q2 2009, while the company's free cash

flow improved to MUSD 7.3 from MUSD 3.8 the prior

year.

"Nordic Semiconductor has successfully grown its

revenue without comparably increasing its overhead

expenses due to its targeted product strategy and

business model of outsourcing manufacturing and

direct distribution," explained Robert Giori, Chief

Financial Officer. "At the same time, our focus on

working capital management has resulted in strong

cash flow. With a cash balance of MUSD 29.0 and no

debt, Nordic Semiconductor has a very solid

foundation for further sustained growth."

Business Outlook

The company indicated a positive outlook for

continued growth in 2010 and beyond. "Nordic

Semiconductor's recent order inflow will drive its

sales for the remainder of the year. The company

finished Q2 2010 with a record high order backlog of

MUSD 88. Although the production environment remains

tight, we are working closely with our suppliers to

secure delivery of our order backlog throughout the

second half of the year," commented Larsen.

In 2011, the company expects its PC / Media

controller business segment to continue to be a major

source of revenue growth. "Major PC vendors are

increasingly adopting wireless technology in original

PC shipments, which significantly expands the market

for wireless PC peripherals. In addition, we are

seeing increased demand for RF-based remote controls

to meet the connectivity requirements of new

generations of home media and consumer electronics

devices."

Over the longer term, the company addressed numerous

growth opportunities. "Nordic's ultra-low power 2.4

GHz RF technology is well positioned to become the

preferred wireless solution within many emerging

product categories. Furthermore, we are confident

that the release of the Bluetooth Low Energy standard

will drive further market growth by opening mobile

phone handsets and other Bluetooth devices for

connectivity with low-energy wireless sensor and

monitoring devices," concluded Svenn-Tore Larsen.

A complete Q2 2010 financial report is attached

in .pdf format.

For more information, please contact:

Robert Giori, Chief Financial Officer. + 47 93409188

About Nordic Semiconductor:

Nordic Semiconductor ASA develops and sells

integrated circuits and related solutions for short-

range wireless communication. The company

specializes in ultra-low power (ULP) components,

based on its proprietary 2.4 GHz RF technology. All

manufacturing of components is outsourced to

specialist subcontractors. The company's operations

are managed according to an ISO 9001:2000-approved

quality assurance system.

The company is headquarted in Trondheim and Oslo,

Norway, with offices in the US, Hong Kong, Korea,

Japan, Taiwan and the Philippines. The company is

publicly traded on the Oslo Stock Exchange under the

ticker NOD.