Nordic Semiconductor

Investor Presentation • Oct 22, 2019

CTO, Svein-Egil Nielsen

Cellular IoT adds a new dimension to Nordic

Short-range and cellular IoT highly synergistic businesses

In pole position within low power cellular IoT

• USD 98m invested in cash costs since project start-up, targeting low power cellular IOT(cIoT) market with vast potential
• Built highly skilled organization with cellular backgrounds from multi-billion unit programs at Nokia, Renesas, Broadcom and Ericsson
• Succeeded in developing a market leading, highly optimized, lowpower cellular IoT product

Accumulated cellular IoT investments (USD million)

nRF9160 is a market leading product

nRF9160 System in Package

Designed for low power

• Best-in-class power consumption, in all modes
• Integrated memories and low-leakage process features
• Common power management and clock system for modem and application

Smallest size

Integrated and used advanced packaging techniques to reduce solution size

Ease of use

Enable self-service for thousands of customers

Powerful modem capabilities

LTE-M, NB-IOT and GPS support

Tight integration

Efficient, on-chip data and control transfer between application and modem

Multiple Secure Islands

Modular approach to security

Introduced the Nordic Thingy:91

• The low power cellular IoT market is ripe for expansion - we help develop the market
• The Thingy:91 prototyping tool lowers the barrier for customers to run proof-of-concept trials
• Fully available hardware and software design files offering customers an excellent starting point for their own designs
• In full volume production 2500 shipped

Favorable competitive comparison

	Power consumption in 81.92s eDRX	Size (mm3)	Low power application MCU and SDK	Embedded software development kit
nRF9160	25uA	160	Yes	Yes
Competitor A	25uA	177	No	No
Competitor B	250uA Preliminary marketing number	1080	No	No
Competitor C	?	1089	No	No

• Leading the field in both low power consumption and small size
• Only vendor with low power embedded MCU and SDK

Simplifying IoT Cloud Connectivity

Secure Connection

• End-to-end security with pre-provisioned credentials
• On-demand provision of new devices to account

Access Data

• Visualize data from development kits
• Access data through APIs using generated token keys

Manage device

• Manage certificates
• Update firmware
• Manage SIMs and data usage

nRF9160 SiP works on 4G and 5G networks

• LTE-M and NB-IOT already available in 4G
• LTE-M and NB-IoT form the 5G massive machine type communication (mMTC) solution
• nRF9160 is ready for mMTC 5G
• Market success for nRF9160 is not dependent on 5G rollout

Cellular IoT ready

SKilleslide

Confident in long-term cellular IoT outlook

Volumes and revenues pushed out in time

• Carrier and industry ecosystem maturation
• Software development
• Certification processes
• Customer development cycles

ABI: Cellular M2M shipments, million units

Source: ABI Research, August 2019

Ecosystem

Software

Certification

Reasons for delay

Nordic software deliverables Ease of use not yet at Bluetooth level

LTE-M/NB-IOT certification process maturity Nordic software deliverables

Carriers are embracing cellular IoT

Source: GSMA.com

Leading worldwide coverage with single SKU

nRF9160 regional tele-regulatory certifications

Carrier certifications add local collaboration

Currently in active certification processes with 9 key carriers globally

• Certified by Verizon in August 2019
• Carrier certifications provide opportunities for collaboration with local carriers in major markets
• Most carriers do not have certification programs

© Nordic Semiconductor

Software deliverables coming on-line

First software production releases in early July 2019

• Modem firmware with Triple-Mode functionality, LTE-M, NB-IOT and GPS
• nRF Connect SDK

Some functionality omitted from July releases

Strong development momentum in Q3 and Q4 will enable significantly wider customer base to go to production

New production releases scheduled for Q4 adding significant functionality

Market opportunity

SKilleslide

Ongoing project across all these verticals

• Smart Home
• Payment systems
• Industrial monitoring systems
• Agricultural monitoring
• Construction
• Smoke alarms
• Metering
• Vehicle and driver behavior tracking
• Logistics
• Kids and elderly trackers

• Asset Trackers
• Pet and livestock trackers
• Healthcare
• Street lights
• Solar power systems
• Environmental monitoring and disaster prediction
• Product-as-a-service
• Parking systems
• Water/sewage systems monitoring

Highly complementary with short-range

Broad and diversified range of potential applications for both consumer and non-consumer markets

Combining short-range and cellular Mixing short-range and cellular

61% of customers who have ordered nRF9160 SiPs have also bought short-range devices from Nordic

Asset tracking set to be a leading market

Massive potential market

• Tracked objects range from vehicles, packages, machinery and pets/livestock
• With increased digitization, need is growing for accurate information on location and condition of assets

With increased digitization, need is nRF9160 SiP is ideally suited for asset tracking

Massive potential market

Tracked objects range from

vehicles, packages, machinery and

• growing for accurate information Low power consumption
• Small size
• on location and condition of assets GPS integration
• Sensor application integration

pets/livestock

Global coverage

Gaining traction with the nRF9160

nRF9160 Development Kit

• In mass production with good yield
• Shipped 4,000 nRF9160 development kits
• 220 customers have ordered parts from distribution to build their own board
• 3rd most active product on DevZone
• Prototypes and early products drove \$500k in Q3 2019

Nordic is poised for cellular IoT growth

• World leading cellular IoT SiP in mass production
• Carriers are embracing cellular IoT
• Certifications and firmware availability gaining pace
• Considerable customer design activity
• Diverse applications overlapping with short-range customer base
• Early volumes of DKs and products shows great promise