Nordic Semiconductor — Investor Presentation 2018

Jan 22, 2018

Analyst and investor brief

January 22, 2018, Oslo, Norway

Objective with our cellular IoT investment

Growth

Establishing a second growth vehicle

• In addition to our fast growing shortrange IoT business
• Accelerate growth in revenue and profitability

Scale

Synergies with our short-range loT business

• Market and customer base
• Product development Π.
• Operations and supply chain Π.

We are proud and excited!

Our nRF91 solution

Packs a lot of value Highly differentiated Forward looking

Started only 3-years ago Complex solution Part of the first wave

Time-to-market

Customers and partners share our excitement

Peder's brown bag with nRF91 demo at CFS

Demos and briefs at CES 2018 Customers and partners

Overwhelming positive feedback Size, power and level of integrations

Strong customer demand Lining up customer for our lead customer sampling program

Lead customer sampling program

Started December 2017 Expanding in H1 2018

High standards on Customer experience

Existing customer Long term relationship Tens of customers Balanced mix

Developing in parallel Close and direct support

Simplified customer engagement model

Traditional model

Nordic model

Nordic $\rightarrow$ Customer

• Module supplier does value add integration and solutions

• Module supplier often handle sales, marketing and support

• Nordic is one-stop shop for cellular IoT

• Building on Nordic's proven broad $\blacksquare$ market engagement model

The nRF91 SiP is a high value solution

Same category as traditional cellular modules Easy-of-Integration, ease-of-use and certifications

Additional value add integration Application processor and Assisted GPS

Larger portion of 3'rd party content vs. IC Gross margin dynamics will be a mix of IC and module

Unique value proposal with nRF91 SiP

Size and power consumption

Industries smallest and lowest power solution

A "no compromise" attitude to performance

Value add integration and features

Solution completeness and ease-of-use

• Application processor and Assisted GPS

• Global operation and advanced system level security

• Software and development tools; including cloud

• Nordic support and developer community

Building a leading market position

Existing, solid and established suppliers Loyal customer base in existing market verticals

New verticals driving market growth

Little or no previous exposure to cellular Significant overlap with Nordic's existing customer base Ideal fit with Nordic's proven broad market engagement model

Growing our position with the market Aspiration to become one of the leading suppliers in cellular IoT

Business aspiration for cellular IoT

Short-term

$(*2018)$

• Secure design wins $\overline{\phantom{a}}$
• Production ready and certified solution CONTRACTOR
• Help and drive customer production ramp $\overline{\phantom{a}}$

• Mid-term Surpass break even on a running basis; cellular IoT gross $\overline{\phantom{a}}$ profits > cellular Opex on a running 12-months basis $(*2020)$

• Long-term $(*2022 \rightarrow)$

• Significant contribution to Nordic total revenue and $\blacksquare$ profitability

Cellular IoT investment program

Short-term $(2018 - )$

• Production ready solutions
• Incremental additions and improvements $\mathcal{L}_{\mathcal{A}}$
• Phased regional roll-out
• Sales, marketing and support coverage

Medium to long-term $(\rightarrow 2020 \rightarrow 2022)$

• Expand and strengthen our Π. nRF91 offering
• Next generation product offering

We done it before and we will do it again

$2012 \rightarrow$

nRF5

Bluetooth made easy Bluetooth for everything else $2018 \rightarrow$

nRF91

Cellular made easy Cellular for everything else Thank you!

Analyst and investor brief

January 22, 2018, Oslo, Norway