Nordic Semiconductor
Annual Report 2021

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NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021Content

This is Nordic 

Message from the CEO

Report from the Board of Directors 

Financial Statements

Declaration to the Annual Report

Standards of Corporate Governance

Auditor Opinion Letter

Board of Directors 

Executive Management 

Alternative Performance Measures (APM)

Environmental, Social and Governance

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4

8

26

74

76

83

88

92

95

97

100

Our ESG foundation

113

122

133

Environmental perspectives

Social perspectives

Governance perspectives

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021

This is Nordic

Nordic Semiconductor (“Nordic” or “the Group”) is a Norwegian fabless 
semiconductor company specializing in wireless communication technology 
that powers the Internet of Things (IoT).

The company was established in 1983 in Trondheim, 
Norway, and has offices across the globe. 
Nordic’s award-winning Bluetooth® Low Energy 
(Bluetooth LE) solutions pioneered ultra-low power 
wireless technology, making Nordic the market 
leader in short range IoT. The technology range 
is supplemented by proprietary, ANT+, Thread, 
Zigbee, and in 2018 the low power, compact 
LTE-M/NB-IoT cellular IoT solution was launched, 
extending Nordic’s presence in the IoT market. The 
product portfolio was further complemented by the 
expansion into Wi-Fi technology in 2020.

Nordic built its reputation on supplying cutting-edge 
wireless technologies supported by development 
tools that minimize RF complexity, allowing anyone 
with a bright idea to build solutions based on the 
IoT platform. Today, these award-winning, high-
performing, easy to design with Bluetooth LE 
solutions are used by the world’s leading brands 
in a variety of products, including wireless PC 
peripherals, gaming, sports and fitness, mobile 
phone accessories, consumer electronics, toys, 
healthcare, and automation. Nordic is a member of 
the ANT+ Alliance, Bluetooth SIG, Thread Group, 
Zigbee Alliance, Wi-Fi Alliance, and GSMA.

Multiprotocol solutions ensure that companies 
benefit from compatibility advancement across 
different standards. As a host of technology players 
focus on open connectivity platforms, rather than 
the legacy one-to-one product to accessory model, 

multiprotocol solutions become the standard. This 
new way of looking at connectivity is creating 
a wave of product innovation driven by a wide 
range of companies, from early stage start-ups, to 
established market leading companies. And right at 
the heart of it, lies a Nordic System on Chip.

IoT relies on short-range connectivity and long-
range cellular IoT. The nRF91® Series, which was 
launched towards the end of 2018, is Nordic’s 
first family of low power devices for cellular IoT. 
Nordic’s solution has integrated LTE-M, NB-IoT, GPS 
functionality, RF Front End, and power management 
into a   very small System in Package (SiP), under 
the highest security standards and with significantly 
higher energy-efficiency than any comparable 
products on the market. The cellular IoT market is 
still in the early stages of the commercialization 
phase, with Nordic measuring its success in 
the number of telecom operator certifications, 
development kit shipments, and customer 
pilot projects.

Nordic completed the acquisition of Imagination 
Technologies at the end of 2020 which included 
Wi-Fi assets, IP, and a Wi-Fi development team. 
The synergies between this team’s unique expertise 
and Nordic’s low power DNA philosophy will 
strengthen the future product portfolio with the 
goal of becoming the undisputed global leader of 
IoT connectivity.

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NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | MESSAGE FROM THE CEO

Message from the CEO

2021 was a year of contrast for Nordic Semiconductor. On one hand, we 
saw continued strong demand in most of our markets, with increasing 
demand for both consumer and industrial applications, and from both 
tier-1 customers and the broad market. On the other hand, our growth 
opportunity was capped by the global wafer shortage. Revenue increased 
by 51% to USD 611 million, although product demand indicates this could 
have been significantly higher without the supply constraints. As a result, our 
order backlog more than tripled in 2021 to almost USD 1.7 billion.

2021 continued to put strains on the organization, 
with Covid-19 travel restrictions, mandatory home 
office for parts of the year, and logistics challenges 
in many industries and geographical regions. 
Nevertheless, we stayed fully operational in the 
second year of the pandemic and handled the 
higher business volumes and continued logistics 
challenges. We also continued growing our 
competence base and capabilities. We onboarded 
around 300 new employees during the year 
– including a fully-fledged Wi-Fi team – and 
expanded our workforce to almost 1,200 people 
globally. This was quite an achievement, and I want 
to take the opportunity to thank all our employees 
for their patience, stamina, and drive to make 
this happen. Working out of offices in 14 different 
countries, we have the kind of enthusiastic, inclusive, 
diverse, and ingenious culture required to attract 
and retain the top talents we need to succeed in our 
market. I would also like to thank our customers and 
partners for the continuing support, commitment 
and confidence during 2021. 

In regards to our financial development, we saw 
growth and improvement across the board in 2021. 
Revenue growth of 51% to USD 611 million in addition 
to the 41% revenue growth in 2020, means we have 
more than doubled our revenue in just two years. 
I highlighted four main growth drivers in my CEO 
comment last year, and all of these remained firmly 
in place also through 2021. 

Firstly, we see growing high-volume demand from 
major tier-1 customers such as the global platform 
companies. Secondly, we see the rapid growth in 
industrial IoT continuing, with logistics and assets 
tracking leading the way. Thirdly, fast technology 
adoption is disrupting the healthcare market. And 
finally, we see continued solid demand growth in 
the consumer electronic market, driven by home 
office solutions and gaming.

Bluetooth Low Energy revenue increased 59% to 
USD 503 million and now accounts for more than 
80% of our total revenue, whereas proprietary 
revenue increased by 10% to USD 84 million. We 
also begin to see meaningful revenue in Cellular 
IoT, and although the technology is still in early 
commercial phase, the revenue almost tripled to 
USD 17 million last year. 

These already strong growth figures could have 
been significantly higher without the wafer 
supply shortages and logistics bottlenecks in the 
semiconductor value chain. This is supported by our 
order backlog, which increased from less than USD 
500 million at the end of 2020 to almost USD 1.7 
billion at the end of 2021.

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The strong demand trends give a positive indication 
for continued revenue growth. Back in 2019, we 
presented an ambitious goal to become a USD 
1 billion revenue company in five years. Despite 
the current supply chain constraints, we used our 
Capital Markets Day in October 2021 to pull that 
target one year closer, to 2023.

We are a fabless semiconductor company, and our 
growth plans require increasing wafer deliveries 
from our foundry partners in Asia. However, 
committed wafer deliveries will enable solid 
revenue growth in 2022 and support our new 2023 
revenue target. 

In the current tight supply situation, we are laser-
focused on helping our customers as best we can. 
Our own product allocation is a tough balancing 
act between the demands of large high-volume 
customers with long production schedules, and the 
demands of the many smaller broad market clients 
who might have one single product on the market. I 
believe we have handled the situation in a fair and 
balanced manner. Our top 10 Bluetooth low energy 
customers accounted for just under 40% of sales in 
both 2020 and 2021. We look forward to seeing the 
tight wafer supply ease up over time.

Looking ahead, we expect growth in large platform 
ecosystems and industrial IoT to continue, and also 
see IoT playing an increasingly important role in 
supporting sustainable economic development. We 
expect annual revenue growth of around 25% from 
2023 through 2026, with an increasing share of the 
volume and revenue coming from new connectivity 
technologies and from new products, services, 
and applications. 

Investing early in high growth opportunities is one 
of our strategic strong points. We have done just 
that with our investments into cellular IoT and next-
generation Wi-Fi, and into power management 
and cloud services. These investments have 
significantly expanded our opportunity pipeline and 
broadened our market potential. Around 40% of our 
investments are in areas that account for around a 
combined 3% of our revenue. These areas will grow 
into a significantly higher share of revenue over the 
next five to ten years. 

We will continue to grow, and we will do it 
profitably. Our gross margin has consistently 
stayed above 50% over the past couple of years, 
and our ambition is to maintain the gross margin 
above 50% going forward. With high revenue 
growth and increasing operational leverage, 
we have raised our long-term EBITDA-margin 
ambition from 20% to 25%. 

As we grow, so does our responsibility for 
sustainability within the operational value chain, 
production, our business model, and our end-user 
markets. Sustainability has become an integral 
part of our strategy, our governance and reporting 
structures. For the first time, we are integrating our 
ESG report into the Annual Report. 

I am proud to see that our work on the ESG 
aspect of our business is rated among the industry 
leading companies, as an ESG Industry Top-Rated 
company. This year our stock was also included 
among 400 constituents in the STOXX Global ESG 
Leaders Index. 

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NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | MESSAGE FROM THE CEOFollowing the annual targets of our renewable 
energy program, this year we have had a significant 
increase in renewable energy usage in both 
our operations and outsourced manufacturing 
processes. We continuously strive for achieving our 
targeted GHG emission reduction until reaching 
our ultimate goal which is for Nordic to be carbon 
neutral by 2030.

As the CEO of the company, I speak for all of us 
when I say we remain fully committed to the UN 
Sustainable Development Goals (SDGs), and we 
strongly believe that IoT has the potential to solve 
many of the environmental and societal challenges 
we face. We want to be a part of these solutions 
and believe sustainable business is good business. 

Revenue (USD million)

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NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | MESSAGE FROM THE CEONORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORS

Report from 
the Board of Directors

Nordic reported solid revenue growth, improving gross margin, and 
significantly improved results in 2021. Strong product demand has created 
opportunities for increased growth, although delivery capabilities have been 
capped by the global wafer shortage. The strong demand gives confidence 
in Nordic’s growth ambitions. The company has pulled its USD 1 billion 
revenue target one year closer to 2023 and outlined a revenue growth 
ambition of at least 25% annually in 2023-2026.

Group Overview
Nordic Semiconductor is a fabless semiconductor 
company designing, marketing, selling, and 
supporting hardware products and embedded 
software that enable wireless connectivity solutions.

Nordic’s product offering includes integrated circuits 
(ICs), System on chips (SoCs), System in packages 
(SiPs), and software development kits (SDKs). The 
components for these products are manufactured, 
assembled, and packaged at world-class 
subcontractors in Asia, and distributed to branded 
electronics manufacturers through an extensive 
network of global and regional distribution partners. 

Nordic  Semiconductor  is  headquartered  in  Norway 
and  now  has  offices  in  the  US,  China,  Finland, 
Poland, UK, Germany, India, Singapore, Taiwan, the 
Philippines, Japan, South Korea, and Sweden.

Strategy and mission
Nordic’s mission is to be a world-leading supplier 
of connectivity solutions. The company has ultra-
low power proprietary, Bluetooth, and multiprotocol 
technologies for short-range connectivity, next-
generation Wi-Fi technologies for medium-range 
connectivity, and cellular IoT technology for 
long-range connectivity. Nordic is one of a few 
companies aiming to offer all three of the world’s 
most popular IoT technologies: Bluetooth, Wi-Fi, 
and cellular. 

During 2021, the company also announced that it is 
a key contributor in the development of the new 5G 
wireless standard DECT-2020 NR.

Nordic's strategy for building globally leading 
and sustainable business is founded on a set of 
distinctive advantages:

■  Lead on connectivity – ultra-low power and high 

performance at the right price

■  Excite developers – ease of use, value added 

solutions, and strong tech support

■  Scalability – proven scalability across technologies, 

markets, and customers

■  Customer engagement – combining broad market 

and tier-1 engagement models

■  Employee engagement – attracting and retaining 

world-class talent

■ 

Investing early – willingness to invest in high-
growth opportunities

■  High ambitions – clear strategic roadmap 

to generate long-term profitable growth and 
value generation

Nordic has developed a market-leading position 
in the short-range connectivity space, with a 
broad portfolio of integrated circuits, systems, and 
solutions for a wide variety of applications. The 
company is in early commercial development of its 
cellular IoT products for long-range application, and 
in the pre-commercial development stage for Wi-Fi 
and DECT-2020 NR. Overall, the company shipped 
more than 700 million units in 2021, to a broad 
customer base ranging from single developers to 
global industry leading high-volume customers. 
To handle demand, it has been key to develop 
scalable solutions across technologies, markets, 
and customers. 

To build and maintain a strong market position in 
this fast-paced and innovative market, it is crucial 
to engage developers. Nordic believes its world-
leading developer support is a strong competitive 
advantage and keeps growing its ‘DevZone’ 
developer community. ‘DevZone’ now has around 
more than 100,000 users, and the company shipped 
more than 100,000 units of its reusable development 
kits during 2021. 

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It is equally important to be able to engage both 
broad market customers and large tier-1 clients. 
Nordic has built a market leading position for broad 
market customers ever since the introduction of 
Bluetooth Low Energy products in 2012. At the same 
time, the company has also worked diligently to 
establish strong customer relationships with tier-1 
customers like major global platform companies. We 
are seeing the return on this in the form of strong 
demand growth over the past couple of years. 

The end-user markets for Nordic’s products include 
both consumer products and an increasing variety 
of industrial applications. The bulk of the company’s 
products have historically found their way into 
consumer electronics, which remains the single 
largest end-user market today. All end-user markets 
contributed to the revenue growth in 2021, although 
the highest growth was found in the Building/Retail 
segment, led by innovative products in logistics and 
asset tracking. The company also sees high growth 
in the Healthcare segment, where fast technology 
adoption holds the potential to disrupt traditional 
methods for drug monitoring and drug delivery. 

Revenue increased by 51% in 2021, and 41% in 2020, 
meaning revenue has more than doubled in just two 
years. The order backlog increased to USD 1.7 billion 
from around USD 500 million at the end of 2020. 
This reflects both strong product demand but also 
illustrates that the current global wafer shortage is 
capping the company’s product delivery capabilities. 

Strong growth requires continuous organizational 
development and expansion of Nordic’s competence 
and capabilities across all business competencies. 
Nordic had 1,197 employees at the end of the 
year, of which 926 were in R&D, 137 in sales and 
marketing, and 72 in supply chain management. 
This was an increase of 22%, or 33% including the 
onboarding of the Wi-Fi team acquired at the very 
end of 2020, of 80 people. Overall, the company 
has increased a global workforce by more than 
50% during a global pandemic. Growing at such a 
pace in this environment has been demanding for 
the organization.

Operational review

Supply chain constraints
Nordic's main commercial products are Bluetooth 
and multiprotocol System on chips (SoCs), providing 
short-range connectivity, and System in packages 
(SiPs), providing connectivity on long-range 
LTE-M and NB-IoT cellular networks. As a fabless 
semiconductor company, Nordic has these products 
manufactured and assembled at subcontractors 
in Asia and delivered to customers by global and 
regional distributor partners. As described in the 
interim reports during the year, the shortage of 
capacity forced Nordic’s main wafer supplier to cap 
the allocation of wafers in 2021, which in turn has 
affected Nordic delivery capabilities. 

Nordic has worked relentlessly to help its customers 
manage the challenges this has created, both by 
trying to secure additional wafers and by pulling in 
wafers from subsequent quarters to allow for early 
delivery. Overall, Nordic shipped around 700 million 
products in 2021, which was an increase of 40 
percent from 2020. 

Nordic’s own backend production capacity and 
in-house testing capabilities have been sufficient 
to meet the higher volumes, following investments 
in additional testing equipment and component 
inventory buffers in both 2020 and 2021. 

The strained situation in the semiconductor value 
chain will continue in 2022. However, Nordic 
expects that wafer allocations will enable Nordic to 
generate 2022 revenues that put the company on 
track for its 2023 target of USD 1 billion in revenue.

New technology platform 
The company is progressing well with a 
development program for a new cross technology 
platform, which will make sure the company 
maintains the lead on connectivity and delivers the 
type of features and performance that future IoT 
solutions will require. This is a multi-year endeavor 
involving large teams on multiple sites, and carried 
out in cooperation with leading customers. 

In the transition to new platforms, Nordic will use 
leading process technologies optimized for IoT to 
secure stable supply and disruptive performance. 
The first products to be ramped in volumes will be 
new short range products, starting in the second 
half of 2023.

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NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSBluetooth and multiprotocol developments 
Nordic had a market share of 42% of new design 
certifications in the Bluetooth Low Energy market 
in 2021, according to FCC and Bluetooth SIG data 
compiled by DNB Markets. A total of 1,390 new 
designs were certified in 2021, of which 587 had 
Nordic inside. 

The market share has been consistent over time, 
and the company has had a market share of 42% 
of the more than 6,200 designs that have been 
certified over the past five years. This also fits well 
with data from industry researchers Omdia, who in 
2021 estimated that Nordic’s share of units sold in 
the Bluetooh Low Energy market was 42% in 2020. 
These figures make Nordic the clear market leader, 
both in number of designs and number of units sold. 

One of the main reasons for strong market share is 
the broad portfolio of Bluetooth and multiprotocol 
products and solutions. While many competitors 
offer only one or a few alternatives, Nordic offers a 
wide range of SoC versions ranging from entry-level 
SoCs for cost-constrained applications, to highly 
advanced SoCs for complex high-performance 
applications. This enables the company to meet 
different customer requirements at the right 
price point. 

Over the years, the company has built a range of 
seven different SoCs in the highly successful nRF52 
Series, from the entry-level nRF52805 to the high-
end nRF52840. Nordic saw a steady flow of new 
customer product launches across the entire nRF52 
Series in 2021.

Nordic saw many designs using its award-
winning nRF5340 SoC, which went into volume 
production towards the end of 2020. The dual core 
nRF5340 supports Bluetooth 5.2/Bluetooth Low 
Energy, Bluetooth mesh, Thread, and Zigbee, with 
established support for AI and machine learning. 

The nRF5340 SoC is being used in the Matter 
project. The partners in Matter are working to 
secure seamless connectivity and interoperability 
of devices, hubs, apps, and services from different 
device manufacturers and software vendors. The 
project is backed by Apple, Amazon, Google, and 
hundreds of larger and smaller companies,  Several 
Nordic customers were among the first to launch 
Matter-compatible smart home products towards 
the end of 2021.  

Nordic is continuously improving the capabilities of 
its nRF Connect Software Development Kits (SDK), 
which now include support for Apple Homekit 
and third-party device connection to Apple Find 
My network. 

Cellular IoT
Nordic is applying a scalable and flexible ‘go-to-
market’ strategy in the cellular IoT (cIoT) market, 
seeking to make accessible the broad market for 
innovative customers and cIoT solutions. Traditional 
business models in this area have typically been 
focused on cell phones or 2G/3G industrial 
application with one-to-one support, which limits 
uptake and the commercial opportunity.

Nordic’s solutions comprise a globally certified 
ultra-low power product that offers connectivity, 
application microcontroller unit (MCU) and memory, 
open-source software, and readily available 
technical support through Nordic ‘DevZone’ 
or distributors. 

The product in this offering is the award-winning 
nRF9160 cellular IoT System in Package (SiP), 
which is recognized as market leading on power 
consumption, size, and form factor. The product has 
been upgraded during the year, including improved 
GPS functionality and location APIs for multicell 
location services. 

Nordic has established a broad carrier certification 
program for its cellular IoT products, with global 
operators as well as leading national and regional 
operators in the US, Canada, Brazil, China, Japan, 
and South Korea. In Norway, the company has 
partnered with Telenor to use Nordic’s prototyping 
tool Thingy:91 in combination with the operator’s 
‘Managed IoT Cloud’ (MIC) offering.

Nordic's end-customers are currently working 
on hundreds of different cIoT projects across 
a wide variety of verticals, including industrial 
and consumer asset tracking, industrial sensors 
and metering, smart home consumer products, 
healthcare applications, and modules. Several 
projects entered the commercial phase during 
2021 and began generating meaningful revenue 
for Nordic. 

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NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSDuring 2021, Nordic launched its first commercial 
service offering. The nRF Cloud Location Services 
offer Nordic’s cellular IoT customers a simple and 
convenient way to manage location for fleets of 
IoT devices in the field. Nordic is partnering with 
multiple third parties to secure a high-quality 
service, including GPS assistance data and 
location history and timestamp data for individual 
IoT devices. The company expects to launch 
more services based on the nRF Cloud platform 
going forward.

Wi-Fi
Nordic entered the medium-range connectivity 
market through the acquisition of a Wi-Fi 
development team and IP technology assets and 
patents for Wi-Fi 4, 5, and 6 in late 2020. Wi-Fi 
has been a ‘missing link’ capability requested by 
customers to complete Nordic’s strong positions 
in the short-range and long-range markets. At 
the time of acquisition, Nordic said it expected to 
see meaningful revenue contribution from Wi-Fi 
products within three years. Development in the 
Wi-Fi area is progressing as planned, with the 
company on track for its first market introduction in 
the second half 2022. 

DECT
Towards the end of 2021, Nordic announced that it 
is a key contributor to a new 5G wireless standard 
called DECT-2020 New Radio (NR), which will add 
yet another connectivity standard to the portfolio. 
The DECT-2020 standard will allow enterprises to 
easily set up, manage, and build decentralized, 
low-cost private 5G wireless IoT networks. With 
an outdoor range of up to 2 kilometers, Nordic 
categorizes DECT-2020 NR as a WNAN, or Wireless 
Neighborhood Area Network.

Power management 
In May, Nordic launched the nPM1100 PMIC, the 
company’s first catalog power management 
product. The nPM1100 offers clear value-add for 
existing Bluetooth Low Energy customers, due to 
the tight integration with Nordic’s SoC portfolio. The 
PMIC combines a USB compatible battery charger 
with a highly efficient DC/DC converter, in an ultra-
compact wafer level chip scale package (WLCSP). 
The extremely compact form factor makes it ideal 
for space constrained applications like connected 
medical devices, smart home sensors, remote 
controls, or advanced wearables. 

The power management integrated circuit ensures 
reliable power supply and stable operation for 
Nordic’s nRF52 and nRF53 Series SoCs with minimal 
power usage and is also available as a generic 
PMIC on a standalone basis. While it is still too early 
to assess the commercial development, the launch 
of the nPM1100 marked a commitment to establish a 
line of PMIC products going forward.

Design partner & Solutions partner program
In 2021, Nordic launched a ‘Nordic Partner 
Program’ with both design partners and solution 
partners to help customers accelerate time to 
market. This creates an ecosystem that can 
assist Nordic customers by providing products, 
services and solutions that complement Nordic’s 
portfolio of hardware, firmware, development 
tools, and reference designs. Initial partners in 
the program include CA Engineering, Indesign, 
Sigma Connectivity, Shenzhen Minew Technologies, 
Meshtech, grandcentrix, NORBIT, and Telenor. 

Review of the annual accounts
In accordance with the provisions of the Norwegian 
Accounting Act, the Board of Directors confirms 
that the accounts have been prepared on a 
going concern basis and that the going concern 
assumption applies. Nordic prepares consolidated 
annual accounts in accordance with IFRS 
(International Financial Reporting Standards) as 
approved by the EU, relevant interpretations, and 
the Norwegian Accounting Act. A summary of 
internal controls related to the accounting process 
can be found in the Corporate Governance section 
of this Annual Report.

Note that the Group has identified gross margin, 
EBITDA, EBITDA margin, short-range EBITDA 
margin, total operating expenses, cash operating 
expenses, and order backlog as Alternative 
Performance Measures in addition to the financial 
information as prepared in accordance with 
IFRS as adopted by the EU. Please see separate 
chapter on Alternative Performance Measures for 
further details.

Income Statement
The Group classifies its revenues into the following 
technologies: short-range wireless components, 
including Bluetooth LE based and proprietary 
products, long range (cellular IoT), ASIC 
components, and Consulting services.

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NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSRevenue by technology:

USDm

Bluetooth

2021

2020

Change

503.1

316.0

59.2%

10.1%

Proprietary wireless

83.9

76.1

Short-range wireless 
components

Cellular IoT

ASIC Components

Consulting services

587.0

392.2

49.7%

17.0

6.1

0.4

6.5

6.3

0.2

161.0%

(3.4)%

73.9%

Total

610.5

405.2

50.7%

Total revenue increased by 50.7% to USD 610.5 
million in 2021, up from USD 405.2 million in 2020. 
The growth comes as a result of higher volumes, 
higher prices, and a favorable product mix.

Growth is currently capped by limited availability of 
wafers, and the revenue hence does not reflect the 
full underlying demand across the end-user markets.

Revenue from Bluetooth increased by 59.2% to USD 
503.1 million in 2021. Bluetooth accounted for 82% of 
Group revenue in 2021. The revenue increase reflects 
strong demand across all end-product markets both 
from tier-1 customers and the broad market.

Revenue from Nordic’s proprietary products 
increased by 10% to USD 83.9 million in 2021. 
Proprietary revenues have more or less returned to 
the revenue levels seen in 2015-2018 and accounted 
for 14% of Group revenue in 2021.

Revenue from cellular IoT increased by 161.0% 2021 
to USD 17.0 million as more projects are gaining 
commercial traction. However, revenue from Cellular 
IoT is also impacted by supply constraints.

Sales of ASIC products decreased by 3.4% in 2021 to 
USD 6.1 million. Nordic is not designing new ASICs, 
hence future revenue depends on demand from 
existing customers and applications.

Split by end-product markets, revenue from the 
short- range wireless components are divided into 
consumer electronics, wearables, building & retail, 
healthcare, and others. Effective 2022, Nordic will 
change the reporting structure for the end-product 
markets to better reflect the underlying verticals, 
with four end-user markets in Consumer, Industrial, 
Healthcare, and Others.

The main change will be that consumer-driven 
products will be moved from the current Wearables, 
Building & Retail, and Healthcare categories to the 
Consumer category.

Wireless components revenue by end-product markets, 
excluding cellular IoT:

USDm

2021

2020

Change

Consumer electronics

Wearables

Building/retail

Healthcare

Other

Total

221.6

68.8

163.8

61.5

71.4

163.1

63.0

81.9

37.8

46.4

587.0

392.2

35.9%

9.2%

100.0%

62.4%

54.0%

49.7%

Consumer electronics revenues increased by 36% 
in 2021. PC accessories remain the largest sub-
segment, although gaming accessories and home 
entertainment have become increasingly important 
revenue drivers over the past years.

Wearables revenues grew 9% in 2021. Growth in this 
market has been adversely impacted by product 
allocations and prioritization of higher-margin 
application areas.

Building/retail revenues increased by 100% in 
2021. Industrial and home automation applications 
within lighting systems, sensors and control, and 
smart home are among the main drivers for growth 
in this market.

Healthcare revenues increased by 62.4% in 2021. 
The pandemic  has generated strong momentum for 
connected medical devices. The company continues 
to view the Healthcare segment as a market with 
potentially disruptive growth possibilities, and as 
one of the key growth drivers for combined short-
range and long-range products and solutions. 

The ‘Other’ segment revenues increased by 54%. 
This mainly reflects sales to module manufacturers 
servicing many end-products in all markets 
and regions.

Gross profit

USDm

2021

2020

Change

Gross Profit

326.6

213.9

Gross Margin

53.5% 52.8%

52.7%

0.7%

Gross profit amounted to USD 326.6 million, an 
increase of 52.7% from the previous year. Hence, 
gross margin increased to 53.5% in 2021 from 
52.8% in 2020.

12

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSThe continued strong underlying gross margin 
reflects a favorable product mix. Nordic has 
focused allocations to high margin products in the 
supply constrained situation. In addition, the Group 
increased prices to absorb the communicated price 
increase for wafers, which will increase cost of 
goods sold in 2022.

In October 2021, Nordic presented its mid-term 
ambition of 50% gross margin. Gross margin will 
depend on technology and customer mix, with lower 
margin expected in cellular IoT module business.

Total cash operating expenses amounted to USD 
199.9 million, when adjusting for non-cash items, 
capitalized development expenses, equity-based 
compensation, and depreciation and amortization. 
This was an increase from USD 141.3 million in 2020.

Nordic capitalized USD 5.6 million development 
expenses in 2021, down from USD 8.4 million in 
2020. Equity based compensation was USD 7.6 
million, compared to USD 4.3 million in 2020. 
Please see the section on Alternative Performance 
Measures for more details. 

Operating expenses

EBITDA and Operating profit

USDm

2021

2020

Change

USDm

2021

2020

Change

Payroll expenses

Other OPEX

149.8

52.1

101.2

36.0

OPEX excl. D&A

201.9

137.2

Depr. & Amort.

37.8

31.1

48.0%

44.9%

47.2%

21.7%

Total

239.7

168.2

42.5%

Operating expenses amounted to USD 201.9 million 
in 2021, excluding depreciation and amortization. 
This was an increase of 47.2% from USD 137.2 million 
in 2020.

The higher expenses mainly reflect a 22.4% increase 
in the number of employees from 978 to 1,197 
during the year, as well as higher activity level. The 
comparable headcount number in 2020 includes 
81 employees from the acquisition of Imagination 
Technologies per December 31, 2020. If these are 
excluded in 2020, headcount growth in 2021 was 
33%.The increased workforce reflects increased 
R&D activity and strengthened sales efforts for both 
Bluetooth and cellular IoT.

Measured by function, expensed R&D accounted 
for USD 139.4 million of operating expenses in 
2021, compared to USD 89.0 million in 2020. R&D is 
expected to continue to increase in absolute terms 
for both the short-range and long-range businesses. 
R&D intensity, measured as a percentage of 
revenue, increased slightly from 22% in 2020 to 
23% in 2021. Nordic has a strong commitment to 
innovation and will continue to invest 15%-20% of 
revenue in R&D.

Sales, general and administration (SG&A) expenses 
increased to USD 62.5 million from USD 48.1 million 
in 2020. SG&A is also expected to continue to 
increase in absolute terms, as the Group builds 
up its long- range organization. However, Nordic 
has showed operational leverage in 2021. As a 
percentage of revenue, SG&A decreased from 12% 
in 2020 to 10% in 2021.

EBITDA

124.7

76.8

62.4%

EBITDA margin

20.4%

18.9%

1.5%

Short-range EBITDA

175.6

106.9

64.2%

Short-range EBITDA 
margin

29.6% 26.8%

2.8%

Operating profit (EBIT)

86.9

45.7

90.1%

EBIT margin

14.2%

11.3%

3.0%

Earnings before interest, tax, depreciation, and 
amortization (EBITDA) amounted to USD 124.7 
million, an increase from USD 76.8 million in 2020. 
The corresponding EBITDA margin increased 1.5 
percentage points to 20.4%.

Short-range EBITDA totaled USD 175.6 million 
equivalent to a margin of 29.6% in 2021. This 
compared to a Short-range EBITDA of USD 106.9 
million and a margin of 26.8% in 2020.

Depreciation and amortization amounted to USD 
37.8 million in 2021, compared to USD 31.1 million 
in 2020.

Operating profit (EBIT) amounted to USD 86.9 
million, compared to USD 45.7 million in 2020. 
EBIT margin increased to 14.2% in 2021 from 11.3% 
in 2020.

Net financial items

USDm

Net interest

Net financial items

Total

2021

2020

-0.4

0.7

0.3

-0.8

-2.0

-2.8

Nordic had net interest expense of USD 0.4 million 
in 2021, compared to net interest expense of USD 
0.8m in 2020. During 2020, Nordic made a USD 40 
million drawdown on Revolving Credit Facility as 
a precautionary move to secure the liquidity when 
the pandemic first hit. The loan was repaid during 
Q3 2020.

13

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSProfits and taxes

USDm

Profit before tax

Income tax expense

Net profit after tax

2021

2020

87.3

-16.1

71.2

42.9

-4.5

38.4

The Group recognized tax charges of USD 16.1 
million, corresponding to an average tax rate of 
18.4%. This compares to USD 4.5 million and an 
average tax rate of 10.5% in 2020. 

The company’s statutory tax rate is 22%. The low 
tax rate in both years are related to settlement of 
equity compensation to employees, not recognized 
in the profit and loss. In 2020, the tax rate  was also 
reduced as a result of foreign exchange losses in 
statutory NOK accounts.

Tax payable amounted to USD 17.4 million, 
compared to USD 5.0 million in 2020, with the 
balance reflecting changes in deferred tax and 
tax benefit.

Financial position
Balance sheet
Nordic has total assets of USD 596.8 million at the 
end of 2021, of which USD 488.0 million in current 
assets and USD 108.8 million non-current assets.

These assets were financed by total equity of 
USD 458.2 million at the end of 2021, non-current 
liabilities of USD 14.9 million and current liabilities of 
USD 123.7 million.

Current assets were USD 488.0 million at the end 
of 2021, compared to USD 401.9 million at the end 
of 2020. This included cash and cash equivalents 
of USD 279.3 million at the end of the year, up from 
USD 242.5 million at the end of 2020.

Inventory decreased to USD 54.9 million from 
USD 62.0 million at the end of 2020 and accounts 
receivables increased to USD 141.7 million from 
USD 88.0 million at the end of 2020, due to 
higher revenues.

Overall, net working capital amounted to USD 108.4 
million, compared to USD 78.3 million at the end 
of 2020. Measured as a percentage of full year 
revenue, net working capital decreased to 17.8% 
from 19.3% at the end of 2020. This is mainly a result 
of a lower inventory in percentage of revenue.

Non-current assets decreased to USD 108.8 million 
at the end of 2021 compared to USD 113.9 million 
end of 2020.

Fixed assets totaled USD 33.9 million at year end, 
up from USD 28.3 million in 2020. Software and 
other intangible assets decreased to USD 15.8 
million from 19.9 million. Capitalized development 
expenses decreased to USD 31.5 million from USD 
34.6 million at the end of 2020.

Total shareholders’ equity amounted to USD 458.2 
million at the end of 2021 up from USD 402.5 million 
at the end of 2020. The Group equity ratio was 
hence 77%, compared to 78% at the end of 2020.

Total liabilities amounted to USD 138.6 million, 
compared to USD 113.3 million at the end of 2020. 
Non-current liabilities decreased to USD 14.9 million 
from USD 21.5 million. Lease liabilities of USD 14.3 
million are included in the non-current liabilities.

Current liabilities increased to USD 123.7 million from 
USD 91.9 million. The increase is mainly explained 
by higher accounts payable, volume rebates and 
short-term employee benefit obligations and 
related taxes.

Cash flow and funding

USDm

2021

2020

Net cash flow from:

Operating activities

Investing activities

Financing activities

Currency adj.

Net change in cash and cash 
equivalents

Cash and cash equivalents 1.1

95.8

65.3

-30.7

-38.0

-27.3

123.6

-1.1

1.0

36.8

242.5

151.9

90.6

Cash and cash equivalents 31.12

279.3

242.5

Cash flow from operating activities was USD 95.8 
million in 2021, compared with USD 65.3 million in 
2020. The improved operating cash flow is a result 
of higher earnings and lower percentage of net 
working capital.

Cash flow used for investing activities was an 
outflow of USD 30.7 million in 2021, compared to 
an outflow of USD 38.0 million in 2020. Capital 
expenditure increased to USD 25.0 million from 
USD 16.5 million, including software, whereas 
capitalized development expenses declined to USD 
5.6 million from USD 8.4 million. In 2020 the outflow 
included USD 13.2 million related to the acquisition 
of Wi-Fi technology and IP-assets from Imagination 
Technologies Group.

14

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSCash outflow from financing activities was USD 27.3 
million in 2021, mainly reflecting cash settlement of 
employee options. In comparison, there was a cash 
inflow of USD 123.6 million in 2020, mainly reflecting 
the private placement made in September 2020 of 
USD 121.3 million.

Including the effect of exchange rates, net change 
in cash and cash equivalents was a cash inflow of 
USD 36.8 million in 2021, compared to USD 151.9 
million in 2020.

Cash and cash equivalents increased to USD 279.3 
million at the end of 2021, from USD 242.5 million 
at the end of 2020. The cash is mainly held in 
the Group’s functional currency USD, in order to 
minimize the impact of currency fluctuations.

In addition to cash at hand, Nordic has undrawn 
revolving credit facilities (RCFs) of USD 65 
million with the company’s main bank. Including 
these credit lines, available cash amounted to 
approximately USD 344 million at the end of 2021, 
compared to approximately USD 320 million at the 
end of 2020.

Available credits at year end 2021 included a USD 
40 million RCF and a USD 25 million RCF expiring 
in November 2022. The RCFs were refinanced in 
December 2019. The only financial covenant on the 
RCFs is for the company to maintain an equity ratio 
above 40%, which compares to the actual equity 
ratio of 77% at the end of 2021.

Tight cash management is a key priority for the 
Group, as a strong financial position is required 
to realize the Company’s strategic priorities and 
growth opportunities. The Board of Directors’ 
assesses the liquidity position as adequate given 
the company current activity level, investment plans, 
and business outlook.

Allocation of net profit for 
parent company
The parent company Nordic Semiconductor ASA 
has a net profit after tax of USD 65.7 million in 2021, 
compared to USD 35.8 million in 2020.

The entire net profit is attributable to the equity 
holders of the parent. Net profit after tax 
corresponds with ordinary earnings of USD 0.34 and 
fully diluted earnings per share of USD 0.34 for 2021. 
This compares to ordinary and fully diluted earnings 
per share in 2020 of USD 0.20 and 0.18, respectively.

Nordic pursues an ambitious long-term growth 
strategy which requires significant investments 
in R&D and sales and marketing. The Board of 
Directors recommends that Nordic maintains a 
solid balance sheet with a high equity ratio and a 
cash reserve that enables the company to continue 
driving its technology and product roadmap.

The Board of Directors will hence propose to the 
Annual General Meeting that the net profit of the 
parent company is transferred to ‘Other equity’, and 
that no dividend is distributed for 2021.

Risk Management
Nordic has a well-established corporate level risk 
framework to manage risks and opportunities that 
may impact the strategic objectives in a proactive 
and systematic manner. All members of the 
Executive Management Team are responsible for 
risk management within their respective functions, 
while Legal & Compliance owns the framework. 
The outcome of ongoing risk evaluations are 
put into actions and priorities proportionate to 
identified risks and opportunities to reach or 
maintain target risk levels. The Board of Directors 
oversee risk management through biannual reviews 
of the Group’s most important areas of exposure 
and internal controls, and on an ongoing basis in 
relation to the assessment of specific projects or 
other matters of regular business. 

Risk Factors
Based on the information currently known to us, we 
believe that the following information identifies the 
most significant risks affecting our business. Any of 
the factors described below, or any other risk factor 
discussed elsewhere in this report, could have a 
negative impact on our results or on our outlook.

Six major groups of risks are identified within the 
Nordic Group: Strategic, Operational, Financial, 
Legal & Compliance, Environmental, and Social. 
Some of the risks are outside of Nordic’s control, 
including industry and specific cyclical risks.

Strategic risk and external factors
Demand for semiconductors and electronic products 
is sensitive to global economic conditions and 
international trade flows. While the underlying, 
long-term market trends point towards increasing 
demand for Nordic’s products, our operations 
are exposed to a variety of factors with real or 
perceived impact on the economy.

Geopolitical risk and trade tensions
Geopolitical risks, challenging global economic 
conditions, trade frictions, political unrest, war and 
uncertainty can result in reduced demand for our 
products or negatively affect our supply chain.

15

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSThe reliance on Taiwan for supply to the 
semiconductor industry could create a critical 
situation for the global economy. Nordic 
experienced a tightening of supply at the beginning 
of 2021, and it continued throughout the year, with 
growth limitations also confirmed for 2022. The 
supply constraint has a direct ripple effect on other 
identified risks, such as Nordic's dependency on key 
customers, as the gap between their demand and 
what Nordic can deliver is increasing.

Response: 
Nordic actively monitors the geopolitical situation 
and is taking actions to reduce the impact on the 
business, for example supporting our customers in 
optimizing their value chain,  placing early orders 
to secure supply, as well as exploring additional 
sourcing options.

Coronavirus
The pandemic has continued to affect Nordic's 
products, distributor inventories, and other parts 
of the industry supply chain in 2021 with temporary 
constraints and increased lead times. At the same 
time, the pandemic has also triggered major interest 
in wearables and other connected devices that 
initially supported social distancing and contact 
tracing to slow down the progress of Covid-19. 
Nordic's technology has been used in dozens of 
such innovative designs, resulting in an overall 
increase in demand of products.

Response: 
First and foremost, Nordic's focus has been to 
safeguard our employees by ensuring operations 
are in full compliance with relevant regulations, 
followed by ensuring business continuity for 
customers, suppliers, and partners. A reduction in 
travel and physical meetings has been compensated 
with more extensive online presence, such as 
online developer and customer support. Nordic is 
continuously monitoring the situation and we will 
make necessary adjustments in alignment with 
any new recommendations from governments, 
manufacturers, customers, and distributors.

Climate change and natural disasters
The nature of our business as a fabless 
manufacturer, means that Nordic is heavily reliant 
on semiconductor manufacturing in Taiwan. Nordic's 
manufacturing partners are exposed to adverse 
effects of climate change and natural disasters.

Response: 
Nordic is in dialogue with our manufacturing 
partners to assess and implement multiple 
initiatives to understand and manage the effects 
of climate change and natural disasters on their 
own operations. In addition, Nordic is exploring 
additional sourcing options.

Changes in competitive landscape
Nordic Semiconductor’s strategic goal is to 
maintain or preferably grow its market share and 
remain a leading vendor of wireless connectivity 
and embedded processing solutions for internet 
connected things.

The markets in which we operate are highly 
competitive in terms of price, functionality, and 
software solutions. In a growing market, we face 
tough competition from existing players as well as 
new entrants, mainly from China. With Bluetooth 
LE being adopted across more than 25 identified 
market verticals, it is likely that more focused 
and specialized competitors gain market share, 
especially in verticals where Nordic’s position 
is weaker.

Response: 
In order to stay competitive, Nordic continues 
to invest in products, software, and strategic 
partnerships. The company has further developed 
its products to include support for additional low 
power, short-range connectivity standards, such 
as Zigbee and Thread, across its nRF52 Series 
and its new generation nRF53 Series. Nordic’s 
multiprotocol portfolio ensures that the company is 
well positioned to benefit from projects seeking to 
improve compatibility across different standards.

We depend on the development of new 
products and enhancing our existing products, 
but the success of our substantial research and 
development activities can be uncertain. However, 
Nordic has guided to invest 15-20% of revenue in 
R&D. This is required in order to stay competitive in 
this market.

Risk of Bluetooth being replaced
There is a risk that Bluetooth becomes unattractive 
compared to other technologies, or is bundled with 
non- Nordic technologies. The biggest immediate 
threat comes from various Wi-Fi standards tightly 
integrated with Bluetooth in combo-chipset. There 
are other wireless standards, like UWB, that may be 
a risk factor in the long term in some of the verticals 
where Bluetooth plays a dominant role today.

Response: 
Nordic is a part of the Bluetooth Special Interest 
Group (Bluetooth SIG), which is continuously 
developing the Bluetooth standards. In addition, 
Nordic has developed Zigbee and Thread solutions 
and acquired a Wi-Fi team with Wi-Fi assets. Nordic 
will continue to monitor the trends in the market, 
keeping the product portfolio relevant.

16

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSCellular IoT
There is a risk that we may not be successful in 
executing our strategy to capture the cellular IoT 
market opportunity in terms of scale, time, and 
volume. Nordic launched the nRF91 Series at the 
end of 2018, which is Nordic’s first family of low 
power devices for cellular IoT. There is still a risk 
that cellular IoT will not be as successful as Nordic 
had hoped for, or that the market is skewed toward 
NB- IoT where simpler, lower cost devices dominate. 
Customers may also choose competing low power 
wide area network (LPWAN) technologies or cancel 
roll-out of products due to lack of any of the 
LPWAN technologies.

Response:
Nordic’s solution has integrated LTE-M, NB- IoT, GPS 
functionality, RF Front-End, and power management 
into a very small System in Package (SiP), under the 
highest security standards and with significantly 
better energy efficiency than any comparable 
products currently on the market. Software 
development tools and highly qualified technical 
support through DevZone puts Nordic in a good 
position to take a large share of the cellular market.

As carriers continue to roll out LTE-M and NB-IoT 
capabilities and certification programs, there are 
more and more customers looking at adopting 
these two technologies. In order to mitigate the risk 
of cellular not being as successful as Nordic had 
hoped for, Nordic focuses on delivering user-friendly 
products and working closely with regulators and 
carriers to remove barriers to entry.

Key personnel
Our business is our employees. Losing key 
employees and not attracting key competencies 
will affect sales, quality of products, delay time 
to market, and more. In order to deliver on our 
strategy and roadmap, we depend on attracting 
the best talent. During the pandemic, turnover has 
been lower due to employees need for security 
superseding needs to seek new challenges. After the 
main restrictions have been lifted, Nordic expects 
staff turnover to be slightly above target of 5%. 

Response: 
Nordic focuses on talent attraction, recruitment, 
and retainment, as well as succession planning 
and continues to develop organizational culture 
and branding. We are continuously improving and 
adapting our employer value propositions to attract 
and keep key talent.

Operational risk
Product availability, quality, safety and integrity
Nordic is a fabless semiconductor company, 
outsourcing component manufacturing and relying 
on distribution partners for sales to the broad 
market of original electronics manufacturers and 
to end-users.

As a fabless company, Nordic Semiconductor 
outsources the capital-intensive production of silicon 
wafers, packaging and testing of its products to 
third-party suppliers, mainly in South-East Asia. 
The manufacturing pipeline involves multiple stages 
with multiple suppliers. The failure of any of these 
third-party vendors to deliver products or otherwise 
perform as required could damage revenue in the 
short-term, and customer relationships in the long-
term.

The manufacturing processes involved often depend 
on specific tooling’s developed and provided by 
Nordic Semiconductor, specifically the chip design 
itself, as well as certain test programs and hardware 
used for quality screening. Failure on Nordic 
Semiconductor’s end to provide good quality or 
enough quantity of such tooling may have the same 
consequences as outlined above.

Response: 
Under normal circumstances, Nordic mitigates the 
risk of lack of products by keeping a buffer stock 
of wafers or finished goods to cover short-term 
demand. For medium-term requirements, Nordic 
seeks to have second sourcing and insurance for 
supply disruptions related to disasters. Nordic’s 
partners are selected through extensive qualification 
programs. Lastly, Nordic has its own testers, 
improving availability of the products and ensuring 
the right quality.

Product ramp
There is a risk that Nordic is not able to ramp up 
production of new products according to customer 
requirements, either resulting in not meeting 
customer volume demands, or resulting in high 
yield loss.

Response: 
Given the timetables for some key product 
introductions, tight control over the New Product 
Introduction process is imperative, including 
quality assurance during high volume product 
ramps. In addition, Nordic has invested heavily in 
its own failure analysis lab, to solve any issues as 
quickly as possible.

17

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSInformation Security and cyber risk
Our operations are complex with several centralized 
critical operations, and any disruption to these 
operations impact our ability to deliver products 
to customers. Furthermore, Nordic’s operations are 
highly dependent on a fully reliable IT-infrastructure 
with all systems operating at close to 100%. 
Downtime can impact development of new products 
(delay launch, day-to-day support to customers, 
manufacturing, and delivery of end products to 
customers). Activities related to cyber-attacks are a 
risk for our day-to-day operations.

Response: 
Employing world class data protection is a top 
priority, in addition to reducing the risk related to 
human behavior by providing regular awareness 
training to all employees. Nordic has implemented 
disaster recovery plans and backup routines in order 
to mitigate any effects of potential cyber-attacks, 
and seeks to maintain appropriate insurance 
coverage to support the management of potential 
threats and attacks.

Product Security 
There is a risk that released products have security 
vulnerabilities, and that Nordic does not meet 
all customers’ expectations with regards to their 
preferred mitigating measures that may vary from 
application to application. Although Nordic certifies 
products in accordance with security industry 
standards, there is a risk of loss of reputation and 
recognition due to cyber-attacks in end-products.

Response:
Nordic continues to invest in security architecture 
and we continuously enhance our well-established 
processes for incident management. Our dedicated 
Product Security Officer is working with industry 
standards on security and certifying Nordic products 
to relevant standards. Our Product Security Incident 
Response Team Manager manages vulnerability 
reporting and follows up on our engagement 
with our external bug bounty program with 
HackerOne. Nordic’s liability is limited to substantial 
conformance with own specifications for our generic 
line of products.

Financial risk
Nordic’s strategy and growth ambitions require an 
adequate cash position to fund the R&D activities 
needed to drive the technology and product 
roadmaps forward.

Maintaining a solid R&D cash coverage, measured 
as cash holding divided by R&D spending, is also 
necessary to pass the procurement due diligence 
of tier-one customers, who are expected to 
make up an increasing part of the revenue base 
going forward.

At the end of 2021, the R&D cash coverage stood 
at 24 months' expenditure. Nordic had available 
cash of approximately USD 344 million at the end 
of 2021, including credit facilities described above 
under ‘Cash Flow and Funding’. The Board of 
Directors assesses the current liquidity risk as low.

Interest-rate risk
Nordic holds minimal interest-bearing debt, whereas 
cash and cash equivalents are held as cash, mainly 
in USD. We consider the direct risk associated with 
interest rate fluctuations as low.

Foreign currency risk
Nordic is exposed to foreign exchange risk, as 
our sales revenue and direct production costs are 
almost entirely nominated in USD, whereas our 
operating expenses primarily are in NOK and EUR. 
Hence, fluctuations in the exchange rates between 
these currencies may impact profit margin.

Nordic does not use any financial instruments to 
hedge the currency risk. A 1% increase in USD/NOK 
would  translate into USD 0.5 million in added profit 
before tax, all other things equal. The company 
presents its accounts in USD, with profits translated 
into NOK for taxation purposes.

Credit risk
Nordic is exposed to credit risk related to both its 
distributors and certain end-customers. The main 
counterparties are leading international distributors 
of electronic components based in Asia, and the 
company has historically not suffered any significant 
credit losses.

Nordic’s 10 largest customers (distributors) 
accounted for 85% of total revenue in 2021, with no 
significant losses on receivables.

Credit monitoring routines are integrated 
into any new credit lines, requiring security in 
the form of payment guarantees or advance 
payment requirements if needed. The company’s 
receivables are not credit insured. The credit risk is 
considered low.

Legal and compliance
Compliance
Nordic has a zero tolerance for bribery and 
corruption, and is committed to the highest 
standards of ethics and integrity wherever we 
operate. With an increasing global presence, the 
focus on governance and ensuring compliance to 
foreign and local requirements is important. 

Nordic is strengthening its focus on governance 
and compliance by the employment of a Group 
Compliance Officer and further improvements of its 
governance and compliance frameworks to ensure 
relevant policies, training, and monitoring of main 
risk areas as well as management of reports of 
concern through whistleblower channels. 

18

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSIn the normal course of business, we might be 
involved in legal proceedings related to commercial 
disagreements, claims related to product quality, 
intellectual property as well as governmental 
inquires. An unfavorable ruling in any of these cases 
can have a material impact on our results.

Product liability
Our products are complex and vulnerabilities in 
our products may not have been detected during 
product development and manufacturing. This may 
result in decreased revenue for our customers and a 
damaged reputation if no work-around is possible. 
Customer contracts and Product Warranty is clear 
in its apportioning of product liability, however there 
is a risk that legal action can be brought forward 
representing a material risk on our results.

Response: 
Nordic follows very high standards in terms of 
quality assurance. Investing in lab equipment and 
testers reduces time used on fault-finding, enables 
workarounds to be implemented faster, and 
effectively screens production defects. Nordic tries 
to limit the contractual liability to an acceptable 
level in the industry.

Intellectual property rights
Enabling licensing of intellectual property rights 
in and to patents that are essential for the radio 
communication standards on which Nordic base its 
products is one of our key priorities. Many owners 
of standard essential patents have decided to only 
license the end-device, leaving it up to Nordic’s 
customers to get third party IP necessary for their 
products, as opposed to licensing Nordic’s products.

Nordic Semiconductor has never been prevented 
from selling its established line of products due 
to intellectual property rights, and is continuously 
investigating any allegations by patent holders 
that Nordic’s products infringe on the intellectual 
property of others. Nordic is taking steps to ensure 
that any such allegations do not prevent the selling, 
purchasing and use of our products.

The Bluetooth specifications are intended to be 
written so that all patent claims which are necessary 
to implement them are held by members of the 
Bluetooth SIG. Any necessary claims held by 
members of the Bluetooth SIG, are automatically 
licensed to members like Nordic as a condition of 
membership. However, there are other participants 
in the industry, that own patents and are not 
members of the Bluetooth SIG, who assert their 
patents towards companies like Nordic.

Patent infringement and licensing practices in both 
Cellular IoT and Bluetooth are considered when 
Nordic assesses potential loss in connection with 
litigation. While we believe the risk of loss is minimal 
due to the company’s vast experience and prior 
art in working with Bluetooth, we will defend any 
claims asserted against Nordic vigorously, in light of 
the inherent uncertainties of access to licensing on 
component level.

Response:
Nordic is a willing licensee and invites the owners 
of standard essential patents to NB-IoT and LTE-M 
to license Nordic’s products on FRAND terms on 
component level, or to enable access to such license 
to its customers. Nordic Semiconductor ASA plays 
an active part in raising awareness around the 
implications which the lack of licenses has on the 
industry. Furthermore, Nordic is and has always 
been active in, and contributing to, standard setting 
organizations, promoting openness and availability 
for all to standard essential patents.

Personnel and organization
The Group had 1 197 employees at the end of 2021. 
The number of employees increased 22% from 978 
at the end of 2020.

The growth reflects increased R&D investments in 
both the short-range business and cellular IoT.

The number of R&D personnel increased by 24% to 
926 during 2021. R&D employees represent 77% of  
total headcount.  Sales & Marketing staff increased 
by 10% to 137 people at year end, while Supply 
Chain increased by 26% to 72 employees. The 
remaining 62 employees work in staff functions. 

At the end of 2021, 679/56.5% of employees were 
employed outside of Norway, compared to 529/54% 
of employees at the end of 2020.

An engagement survey late 2021 reported that 
87% of employees are satisfied or very satisfied 
with working at Nordic, and 92% stated they 
are proud to work at Nordic, both well above 
global benchmarks, 

Sick leave (Norway specific)
Sick leave remained below industry average in 2021, 
with absence due to illness of 1.8%, up from 1.4% 
in 2020. No occupational illnesses or injuries were 
reported in 2021.

19

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSDiversity and inclusion
The Board of Directors’ People and Compensation 
Committee at Nordic Semiconductor works actively 
together with the Executive Management Team 
to ensure non-discrimination and equality, while 
fostering diversity and inclusion. 

Diversity and inclusion are focal areas for leadership 
development and training initiatives, as well as the 
annual people, performance and compensation 
review. In 2021 we conducted a diversity and 
inclusion awareness training for more than 90% of 
our global leaders. 

With 44 different nationalities represented at 
the company’s headquarter and 56 nationalities 
globally, Nordic has a unique position for fostering 
an inclusive and diverse company culture, where 
having a highly specialized skill-set combined with a 
desire for innovation are the common denominators.

Gender balance
At the end of 2021 the percentage of female 
employees was 14.0%, compared to 13.8% in 2020.

The Norwegian operation's workforce is 17.5% 
female, up from 16.0% in 2020. The skewed gender 
balance must be viewed in relation to an industry 
context. In Norway, women working in the private 
sector represent around 37%** of the work force, 
but only around 14%** of electrical engineers and 
computer science professionals are women.

The Executive Management Team consists of 
eight men and two women, whereas the Board of 
Directors consists of four male and three female 
shareholder elected members, in addition to four 
male employee-elected members.

Employee gender distribution

2021

2020

Total percentage female employees

14.0%

13.8%

Percentage of new female hires 
globally

18.5%

13.0%

Percentage of new female hires in 
Norway

26.0%

21.0%

Percentage of new female junior 
hires in Norway

24.0% 24.0%

Promoted or hired females to 
management positions

23.8% 25.0%

Gender equality is a fundamental principle for 
Nordic. Continuous internal and external recruiting 
efforts are made to grow our percentage of female 
employees in all areas. 

Nordic has strengthened the company's employer 
branding with emphasis on promoting gender 
equality and employee diversity. During 2021 the 
People function was further strengthened, enabling 
a more active involvement in the recruitment process 
to ensure inclusive hiring practices. 

As a consequence, we have seen an increase in 
the number of applications from female students 
and graduates, and a corresponding increase in 
the percentage of new female hires above market 
averages and prior years outcomes . 

Age diversity
Nordic Semiconductor aspires to be a healthy and 
attractive workplace for employees of all ages and 
stages of life. The company has implemented a 
Phase of Life Policy, aiming to facilitate employee 
development and knowledge growth throughout 
the employee journey. The phase of life policy 
consists of three stages: Junior, Middle and Senior 
stage. Each phase is based on the perception 
that employees have different needs and selected 
priorities relevant to the various stages of their lives. 
This gives Nordic an opportunity to accommodate 
the personal needs and requirements of our 
employees.

The average age of permanent employees in Nordic 
was 39.3 years in 2021, which is slightly lower than 
in 2020 (40.2). We have employees between 21 and 
70 years old.

Equal pay
Total Rewards was established as a separate area 
of expertise in 2021, as we aspire to increase our 
competitive power to attract and retain global 
talent. An employee preference survey was 
conducted in 2021, to help focus and calibrate the 
company's reward strategy.

Nordic's reward strategy is based on the principle 
that work of equal value shall receive equal pay. 
Salary levels are determined based on objective 
measures such as seniority, education and 
experience, in addition to local market practice and 
cost of living. 

** Based on data from Statistics Norway from 2019

20

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSCareer ladder
In Nordic 77% of employees are employed within 
Research and Development (R&D). To ensure equal 
pay for this core group, Nordic has developed a 
standardized framework to determine and adjust 
salary levels referred to as the Nordic Career 
Ladder. All R&D team base salaries are determined 
by Career Ladder placement and advancement. 
Salary increases are managed through a globally 
aligned salary review process. 

Within the R&D department in Norway, the average 
salary in 2021 for females was 88% of the average 
salary for males. The global average salary for 
female employees was 78% of the average salary 
for males. This excludes the Executive Management 
Team, where the average salary for female 
employees was 76% compared to their male peers.

The average salary gap between women and men 
is largely caused by a higher proportion of men in 
senior positions and with longer tenure. Gender 
differences in salary are also influenced by function 
and location.

Employment opportunities and part-time employment
Nordic strives to offer full-time employment in 
all positions, however accommodates part-time 
employment when requested to the extent possible.

1.9% of Nordic's permanent employees are in 
part-time positions (excluding student-interns), all 
by choice or following medical advice. In 2021 the 
share of male part-time employees was 78% whilst 
22% were women, largely reflecting the overall 
gender split.

Part time employees are offered and often 
accept an opportunity to reevaluate their working 
percentage during the annual performance 
conversation with their manager. 

Parental leave (Norway specific)
Since 1993, a part of the parental leave is legally 
devoted to the father as a way to promote gender 
equality in the labor market in Norway. Nordic pays 
parental benefits beyond the National Insurance 
Scheme. While the national Insurance Scheme 
refunds an annual salary up to 6 G, Nordic offers 
up to 9 G, if the employee has been working for 
at least 6 of the past 10 months before the birth 
of the child.

During 2021, 31 employees at Nordic were on 
parental leave, 24 men and 7 women. The average 
number of weeks on leave for men was 12.75 weeks, 
while the average for women was 21.8.

Diversity and inclusion initiatives in 2022
During 2022, Nordic Semiconductor will develop 
and implement a longer-term, global diversity 
and inclusion strategy with defined organizational 
targets. Our plan for 2022 includes the following 
initiatives: 

■  Conduct diversity and inclusion awareness training 

for all people managers

■  Establish a global job leveling structure as a 

foundation for a compelling, consistent, fair and 
market-oriented approach to size and align all roles.

■  Assess all global visual and written employer 
branding, job advertisements and marketing 
material to ensure inclusive messaging

■	 Track and analyze gender distribution on all job 

advertisement applications

■ 

Implement an efficient employee engagement tool 
to continuously measure the internal perception on 
diversity and inclusion and more

■  Continue our focus of attracting and promoting 

female candidates 

■  Leverage best-of-breed assessment tools in internal 

recruitment and promotions 

Environmental, Social and Governance 
(ESG)
Nordic has committed to to the following ESG 
frameworks:

■  UN Global Compact’s (UNGC) ten principles 

on human rights, labor, environment, and anti-
corruption

■	 Responsible Business Alliance’s (RBA) Code of 

Conduct for social, environmental and ethical issues 
in the electronics industry supply chain

■  UN Sustainable Development Goals (SDGs)

■	 Nordic’s Corporate Social Responsibility policy

The Nordic ESG framework is established according 
to the company’s management systems for Quality 
(ISO 9001), Environmental (ISO 14001), Occupational 
Health and Safety (ISO 45001), and Information 
Security (ISO 27001). These standards enable a 
systematic approach to improving the company’s 
business processes and performance on material 
ESG topics. Material topics include but are not 
limited to Environmental product compliance, GHG 
emission, responsible sourcing of minerals, diversity 
and inclusion, Health & safety, Anti-corruption, 
Information Security and data privacy.

21

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSThe ESG section of this report below presents 
Nordic Semiconductor's ESG  status, programs, 
and performance during 2021. The ESG section 
is prepared in accordance with GRI reporting 
standards (Core option) and follows the 
requirements of Norwegian Accounting Act, Section 
3-3c. The ESG section also represents the company’s 
official Communication on Progress as a signatory 
to the UN Global Compact.

Environmental statement
Nordic seeks to minimize its environmental impact 
on areas of hazardous substances, resource 
consumption, GHG emission, and manage waste 
in an environmentally friendly and resource 
efficient manner.

The company has established routines to monitor 
these conditions under management systems 
certified under ISO 9001 and ISO 14001. Nordic 
complies with all current applicable laws and 
regulations, such as REACH and RoHS directives. 

Manufacturing is outsourced to leading third-party 
providers who are required to operate in compliance 
with the ISO 14001 environmental standards, in 
addition to other certifications, requirements, 
and qualifications.

Aware of the effects of climate change and the 
contribution of the semiconductor industry to GHG 
emission, Nordic started its renewable energy 
program in 2020 to reduce GHG emission from both 
its operations and its outsourced manufacturing 
activities. Procurement of renewable energy 
happens on annual basis, with the long-term goal of 
complete carbon neutrality for scope 2 by 2025 and 
scope 3 by 2030.

Nordic Semiconductor environmental key targets for 
2022 are stated as below.

■	 Renewable energy purchase to achieve:

■	 GHG emission reduction for Scope 2 by 50%

■	 GHG emission reduction for Scope 3 by 20%

■	 80% of prototyping platforms with recyclable 

plastic enclosure

■	 5% of device containers with recycled plastic 

EU Taxonomy
On 12 July 2020, the EU Taxonomy Regulation, which 
provides for the establishment of a framework to 
facilitate sustainable investment, was enacted. The 
EU Taxonomy Regulation introduces a classification 
system of environmentally sustainable activities 
by defining technical screening criteria for each 
environmental objective through delegated acts. 
The EU Taxonomy Regulation also mandates larger 
European companies to report on and disclose 
the extent to which their business activities are 
eligible and aligned with the regulations’ definition 
of environmental sustainability. The first delegated 
acts apply as of January 1, 2022 and classifies the 
economic activities of a defined set of industries 
with a large focus on manufacturing processes, 
which are decided to be the most important for the 
first two of the six environmental objectives (climate 
change mitigation and climate change adoption). 

Nordic Semiconductor ASA, as a publicly listed 
European company with more than 500 employees, 
is under the EU Taxonomy Regulation to the extent 
that we are mandated to disclose if and, to which 
extent our business activities are recognized 
within the definitions of the current EU Taxonomy 
Regulation and its delegated acts. 

An assessment of the EU Taxonomy Regulation and 
its delegated acts for the financial year of 2021, 
has concluded that the business activities of Nordic 
Semiconductor are not included in its current scope, 
and therefore disclosed as non-eligible economic 
activities. Nordic Semiconductor continues to 
monitor changes in the EU Taxonomy Regulation to 
ensure necessary preparations and compliance with 
the regulation.

For more information on sustainability development 
and performance, we refer to the ESG section of 
this report, where we provide more details on our 
objectives and activities related to environmental 
and social impact, as well as our governance 
framework and how these themes are integrated in 
the way we work.

22

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSCorporate Governance
Nordic is subject to corporate governance 
requirements according to the Norwegian Public 
Limited Companies Act, the Norwegian Accounting 
Act, section 3-3b, the Oslo Stock Exchange's Oslo 
Rulebook II -Issuers Rules, Chapter 4.5 section 5-8a 
of the Norwegian Securities Act, and the Norwegian 
Code of Practice for Corporate Governance ("the 
Code of Practice") as adopted by the Norwegian 
Corporate Governance Board (NUES). 

A thorough review of compliance with the Code of 
Practice is included in the Standards of Corporate 
Governance chapter of this Annual Report.

Nordic has a Directors and Officers Liability 
Insurance on behalf of the members of the 
Board of Directors and CEO. The insurance 
additionally covers any employee acting in a 
managerial capacity and includes subsidiaries 
owned with more than 50%. The insurance policy 
is issued by a reputable, specialized insurer with 
appropriate rating. 

Shareholder Matters
The Nordic Semiconductor shares are listed on 
the Oslo Stock Exchange (OSE) under the ticker 
NOD. Total return for the Nordic share was 116% in 
2021, compared  the Oslo Stock Exchange (OSEBX) 
which increased 23% during 2021, and the PHLX 
Semiconductor Sector Index (SOX) which increased 
41% during 2021.

The Nordic share closed at NOK 297.6 at year-end 
2021, corresponding to a market capitalization of 
NOK 57.4 billion.

Nordic had 191.0 million shares outstanding at the 
end of 2021, of which 1.8 million treasury shares. 
Purchase of treasury shares is viewed as an 
effective way to cover the obligations related to 
equity-based compensation.

On the Annual General Meeting in April 2021 the 
Board was given the authorization to purchase own 
shares, and to hold treasury shares within the limits 
of the Norwegian Public Limited Liability Companies 
Act. The company will seek the same approval on 
the 2022 Annual General Meeting.

Nordic had approximately 14 600 shareholders at 
the end of 2021, compared to 8 800 at the end of 
2020. The top 20 shareholders held 57.3% of the 
registered shares.

51.4% of the shares were held by institutions and 
individuals based in Norway, down from 58.7% in 
2020. The following table outlines the geographical 
split of our shareholder base. The geographical split 
is based on results from our shareholder analysis 
vendor showing data as of December 31, 2021.

Region

Norway

USA

Other Europe

UK

Sweden

Rest of World

December 31, 2021

51.4%

29.8%

7.9%

5.3%

3.4%

2.2%

Nordic aims to have an open dialog with 
shareholders and investors. The company conducted 
virtual investor roadshows both in Norway and 
internationally in connection with the interim results 
and participated on several industry and investment 
virtual seminars during the year.

Through active communication with the capital 
market and shareholders in 2021, Nordic ensured 
that all relevant information required for external 
evaluation of the company was published in 
accordance with applicable rules and guidelines 
issued by the Oslo Stock Exchange.

23

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSOutlook
Nordic Semiconductor is experiencing strong 
demand from globally leading technology 
companies and other tier-1 customers, as well as 
from customers in the broad market. This is reflected 
in revenues that have more than doubled over the 
past two years, and in an order backlog that more 
than tripled to almost USD 1.7 billion during 2021. 

The currently limited availability of wafers is 
preventing the company from taking full advantage 
of the strong demand, although revenue increased 
by 51% to USD 611 million. The company expects 
to be allocated wafer volumes and to generate 
revenue in 2022 that keeps the company on track 

for its 2023 revenue target of USD 1 billion. Nordic 
sees continued strong growth opportunities well 
beyond 2023, and overall looks for annual revenue 
growth of at least 25% in 2023-2026. 

Nordic reported a gross margin of 53.5% for 2021, 
partly due to one-off effects of price changes 
towards the end of the year. The company targets 
an overall gross margin of 50% going forward. 
Combined with higher scale and improving 
operational leverage, Nordic expects this to enable 
a long-term EBITDA-margin level above 25%.

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSOslo, March 17, 2022

Jan Frykhammar

Board member

Birger Steen

Chair

Anita Huun

Board member

Inger Berg Ørstavik

Svenn-Tore Larsen

Board member

Chief Executive Officer

Endre Holen

Board member

Øyvind Birkenes

Board member

Jon Helge Nistad

Annastiina Hintsa

Board member, employee

Board member

Joel Stapleton

Susheel Raj Nuguru

Morten Dammen

Board member, employee

Board member, employee

Board member, employee

25

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | REPORT FROM THE BOARD OF DIRECTORSFinancial statements

Income statement (for the year ended December 31)

GROUP

PARENT

2021

2020 Amount in USD 1000

Note

2021

2020

610 528

405 217 Total Revenue

-283 415 -190 690 Cost of materials

-472

-584 Direct project costs

326 640

213 943 Gross profit

-149 824

-101 211 Payroll expenses

3

4

611 577

406 242

-283 415

-190 690

-472

-584

327 690

214 968

9/10/12/18

-84 483

-61 444

-52 098

-35 954 Other operating expenses

5/11

-130 450

-84 325

-37 798

-31 063 Depreciation

86 920

45 714 Operating profit

730

642 Financial income

-1 129

-1 416 Financial expenses

739

-2 016 Net foreign exchange gains (losses)

87 260

42 925 Profit before tax

-16 089

-4 534 Income tax expense

71 171

38 391 Net profit after tax

Attributable to:

71 171

38 391 Equity holders of the parent

0.37

0.37

2021

0.21 Ordinary earnings per share (USD)

0.20 Fully diluted earnings per share (USD)

2020 Statement of comprehensive income

71 171

38 391 Net profit after tax

-150

-84

Actuarial gains (losses) on defined benefit plans  
(before tax)

33

19 Income tax effect

-1 186

688 Currency translation differences

11/12/21

-32 893

-27 128

79 864

42 071

6/22/23

737

6/21/22/23

-1 001

6/22

704

642

-1 336

-2 014

7

8

8

7

80 305

39 363

-14 618

-3 564

65 687

35 799

65 687

35 799

0.34

0.34

2021

0.20

0.18

2020

65 687

35 799

-150

33

-84

19

69 868

39 014 Total Comprehensive Income

65 570

35 734

Attributable to:

69 868

39 014 Equity holders of the parent

65 570

35 734

27

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSStatement of financial position (as of December 31)

GROUP

PARENT

2021

2020 Amount in USD 1000

Note

2021

2020

ASSETS

Non-current assets

2 386

2 393 Goodwill

31 542

34 563 Capitalized development expenses

15 764

19 905 Software and other intangible assets

6 331

3 668 Deferred tax assets

18 935

25 092 Right of use assets

24

12

12

7

21

249

249

31 542

34 563

15 232

19 286

5 748

3 029

14 923

20 616

33 885

28 284 Fixed assets

11/22/23

28 824

24 960

0

0 Shares in subsidiaries

1/13

6 696

1 590

108 844

113 906 Total non-current assets

103 215

104 294

Current assets

54 943

61 955 Inventory

141 748

88 034 Accounts Receivable

11 951

9 372 Other current receivables

4

14/22/23

15/22/23

54 943

61 955

141 748

88 034

11 283

10 062

279 331

242 547 Cash and cash equivalents

16/22/23

273 430

238 615

487 973

401 909 Total current assets

596 817

515 814 TOTAL ASSETS

EQUITY

317

317 Share Capital

235 448

235 448 Share premium

222 443

166 727 Other components of equity

458 209

402 492 Total equity

LIABILITIES

Non-current liabilities

580

448 Pension liabilities

481 405

398 666

584 620

502 960

317

317

235 448

235 448

204 924

153 501

440 690

389 266

554

448

17

17

18

14 281

21 004 Non-current lease liabilities

21/22/23

11 673

18 338

14 861

21 452 Total non-current liabilities

12 226

18 785

Current liabilities

28 392

22 812 Accounts payable

20/22/23

27 558

21 059

17 427

4 976 Income taxes payable

7 599

5 594

520

8 789 Public duties

5 520 Current lease liabilities

302 Current financial liabilities

7

20

21/22/23

22/23

17 181

4 889

6 266

3 921

520

7 777

3 616

302

64 215

49 472 Other current liabilities

15/20/23

76 258

57 265

123 747

91 872 Total current liabilities

138 608

113 323 Total liabilities

596 817

515 814 TOTAL EQUITY AND LIABILITIES

131 703

94 908

143 930

113 694

584 620

502 960

28

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTS 
 
Oslo, March 17, 2022

Jan Frykhammar

Board member

Birger Steen

Chair

Anita Huun

Board member

Inger Berg Ørstavik

Svenn-Tore Larsen

Board member

Chief Executive Officer

Endre Holen

Board member

Øyvind Birkenes

Board member

Jon Helge Nistad

Annastiina Hintsa

Board member, employee

Board member

Joel Stapleton

Susheel Raj Nuguru

Morten Dammen

Board member, employee

Board member, employee

Board member, employee

29

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNordic Semiconductor Group

Consolidated statement of changes in equity

Amount in USD 1000

Share 
capital

Treasury 
shares

Share 
premium

Other paid 
in capital

Currency 
translation 
reserve

Retained 
earnings

Total equity

Equity as of 01.01.2020

303

-5

113 355

6 819

-309

112 042

232 205

Net profit for the period

Other comprehensive 
income

Share based compensation

Sale of treasury shares 
(option exercise)

Capital increase*

Equity as of 31.12.2020

Net profit for the period

Other comprehensive 
income

Share based compensation

Option exercise

14

317

3 265

5 897

2

122 093

38 391

38 391

688

-65

623

3 265

5 899

122 108

-2

235 448

15 980

379

150 368

402 492

71 171

71 171

-1 185

-117

-1 302

6 670

-20 821

6 670

-20 821

Equity as of 31.12.2021

317

-2

235 448

1 829

-806

221 421

458 209

Nordic Semiconductor Parent

Consolidated statement of changes in equity

Amount in USD 1000

Share 
capital

Treasury 
shares

Share 
premium

Other paid 
in capital

Retained 
earnings

Total equity

Equity as of 01.01.2020

303

-5

113 355

4 530

103 570

221 754

Prior year adjustment

Net profit for the period

Other comprehensive income

Sale of treasury shares (option 
exercise)

Share based compensation

Capital increase*

Equity as of 31.12.2020

Net profit for the period

Other comprehensive income

Option exercise

Share based compensation

-21

-21

35 799

35 799

-65

-65

5 899

3 792

122 108

2

122 093

5 897

3 792

-3

235 448

14 219

139 283

389 266

65 687

65 687

-117

-117

6 670

-20 816

6 670

-20 816

14

317

Equity as of 31.12.2021

317

-3

235 448

74

204 853

440 690

* The group increased the share capital with NOK 1 144 million, approximately USD 125 million.
The amount net of transaction cost was USD 122.1 million after tax.

30

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSStatement of cash flows
for the year ended December 31.

GROUP

PARENT

2021

2020 Amount in USD 1000

Note

2021

2020

Cash flows from operating activities

87 260

42 925 Profit before tax

80 305

39 363

-6 332

-2 955 Taxes paid for the period

7

-5 045

-1 922

37 798

31 063 Depreciation and amortization

11/12/21

32 893

27 128

-41 043

-29 561 Change in inventories, trade receivables and payables

4/14/20/22

-40 204

-29 333

6 670

3 151 Share-based compensation

134

138 Movement in pensions

11 332

20 530 Other operations related adjustments

95 818

65 292 Net cash flows from operating activities

Cash flows used in investing activities

-25 050

-16 480 Capital expenditures (including software)

-5 644

-8 398 Capitalized development expenses

11/12

12

0

0

0 Investment in subsidiaries

-13 158 Business Combination, net of cash acquired

-30 694

-38 035 Net cash flows used in investing activities

Cash flows from financing activities

0

0

10 455 Changes in treasury shares

17

121 277 Capital increase

-20 758

-4 557 Cash settlement of options contract

-6 493

-3 552 Repayment of lease liabilities

0

0

40 000 RCF drawdown

-40 000 RCF repayment

4 359

2 357

106

138

16 460

21 845

88 873

59 576

-20 301

-14 752

-5 644

-8 398

-2 878

0

0

-11 694

-28 824

-34 844

0

0

10 455

121 277

-20 758

-4 557

-4 476

-2 496

0

0

40 000

-40 000

-27 250

123 622 Net cash flows from financing activities

-25 234

124 677

-1 090

1 024

Effects of exchange rate changes on cash and cash 
equivalents

36 784

151 902 Net change in cash and cash equivalents

242 547

90 645 Cash and cash equivalents as of 1.1.

0

0

34 815

149 409

238 615

89 205

279 331

242 547 Cash and cash equivalents as of 31.12.

16/22

273 430

238 615

2 285

4 202

Restricted cash incl. in the cash and cash equivalents 
as of 31.12.

16

2 285

4 202

31

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 1: Background

1.1 Corporate information
Nordic Semiconductor ASA is a public limited 
company whose ordinary shares are listed on 
the Oslo Stock Exchange with ticker code NOD. 
The Company is domiciled in Norway, and the 
registered head office is at Otto Nielsens veg 12, 
7052 Trondheim.

The Group includes the ultimate parent company 
Nordic Semiconductor ASA and the wholly owned 
subsidiaries, Nordic Semiconductor Norway AS, 
Nordic Semiconductor UK Ltd, Nordic Semiconductor 
Inc., Nordic Semiconductor Poland Sp. z.o.o, Nordic 
Semiconductor Finland OY, Nordic Semiconductor 
Japan KK, Nordic Semiconductor Germany GmbH, 
Nordic Semiconductor India Pvt. Ltd, Nordic 
Semiconductor Sweden AB, Nordic Semiconductor 
Hong Kong Limited, and Nordic Semiconductor 
(Shenzhen) Limited.

Nordic Semiconductor is a Norwegian fabless 
semiconductor company specializing in wireless 
communication technology that powers the Internet 
of Things (IoT). Nordic was established in 1983 and 
has around 1200 employees across the globe. The 
company’s award-winning Bluetooth Low Energy 
solutions pioneered ultra-low power wireless, 
making it the global market leader. Nordic’s 
technology range was later supplemented by ANT+, 
Thread and Zigbee, and in 2018 Nordic launched 
its low power, compact LTE-M/NB-IoT cellular IoT 
solutions to extend the penetration of the IoT. The 
Nordic portfolio was further complemented by Wi-Fi 
technology in 2021.

1.2 Basis for preparation
The financial accounts for the Group have been 
prepared in accordance with International Financial 
Reporting Standards (“IFRS”) as endorsed by the 
European Union and Norwegian authorities, and are 
effective as of December 31, 2021. The consolidated 
financial statements also comply with IFRS as 
issued by the International Accounting Standards 
Board (“IASB”) and the disclosure requirements as 
specified under the Norwegian Accounting Law 
(Regnskapsloven).

The consolidated financial statements are presented 
in US dollars (USD), which is the functional currency 
of the parent company. All USD amounts are 
rounded to the nearest thousand, if nothing else 
is noted. As a result of rounding differences, it is 
possible that amounts and percentages do not add 
up to the total.

Gross profit is revenue less cost of materials and 
direct project costs. Cost of materials include 
direct and indirect cost of production. Nordic 
Semiconductor uses gross profit for internal 
reporting and has therefore chosen to include it in 
the external financial reporting.

The Group has only one operating segment. The 
Group does not report or monitor profitability on 
a lower level, but breaks down its revenue into 
the following end product markets: Consumer 
Electronics, Wearables, Healthcare, Building and 
Retail, Others, Cellular IoT, ASIC components, and 
Consulting Services. The Group also breaks down 
its revenue in the geographical areas in which its 
distributors are located.

The financial accounts were audited and approved 
for publication by the Board of Directors on March 
17, 2022, and will be presented for approval at the 
Annual General Meeting on April 28, 2022.

1.3 Accounting standards adopted in 2021
In 2021, there are few revisions by the International 
Accounting Standards Board to the financial 
reporting requirements in accounting policies. The 
Group has adopted the following amendment:

Amendments to IFRS 16 - Covid-19-Related 
Rent Concessions
The amendment exempts lessees from having to 
consider individual lease contracts to determine 
whether rent concessions occurring as a direct 
consequence of the covid-19 pandemic are lease 
modifications and allows lessees to account for 
such rent concessions as if they were not lease 
modifications. It applies to covid-19-related rent 
concessions that reduce lease payments due on or 
before June 30, 2022.

In 2021, there has been one lease agreement with 
rent concessions as a direct consequence of the 
covid-19 pandemic. The direct impact on profit and 
loss was not material for the Group.

32

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 2: Significant Accounting Principles 

2.1 Basis for consolidation
The consolidated financial statements incorporate 
the results, cash flows, and assets and liabilities of 
the parent company and its subsidiaries.

A subsidiary is an entity that is controlled, either 
directly or indirectly, by the parent company. Control 
exists when the parent company is exposed, or 
has rights, to variable returns from its involvement 
with the investee and has the ability to affect those 
returns through its power to direct the relevant 
activities of the investee. Generally, such power 
exists where the parent company holds a majority 
of the voting rights of an investee.

Subsidiaries are consolidated from the date 
control is obtained until the date that control 
ceases. All subsidiaries are wholly owned by the 
parent company and there are no non-controlling 
interests. Intercompany transactions, balances, and 
unrealized gains on transactions between group 
companies are eliminated.

2.2 Significant accounting judgements, 
estimates and assumptions
The preparation of financial statements requires 
that management uses judgement, estimates, and 
assumptions that effect the amounts reported 
in the financial statements and its disclosures. 
Management bases its estimates and judgement 
on previous experience and on various other 
factors deemed to be reasonable and sensible 
given the specific circumstances. The main areas 
of uncertainty for assessments and estimates are 
the balance sheet date, which represent a risk of 
creating significant changes to the value of assets 
and liabilities, are discussed below.

Estimates are continuously reassessed based on 
changes in the underlying assumptions. Changes in 
accounting estimates are recognized in the period 
in which such changes occur. If such changes also 
apply to future periods, the effect is distributed 
between current and future periods.

Revenue recognition
Revenue recognition principles are described in 2.4 
Revenue recognition.

Nordic Semiconductor predominantly sells 
to electronic distributors under a distribution 
agreement. The distributors will hold a given 
level of Nordic Semiconductor's inventory that 
is subsequently shipped to an end customer. 
Nordic Semiconductor uses a “sell in” model in 
connection with revenue recognition to distribution 

customers. Under a “sell in” model, management 
needs to make judgements and estimates the 
amount that can affect the reported amounts of 
revenues and expenses. The main judgments are 
described as follows.

Variable consideration for “Ship and Debit”
When a distributor sells components to specified 
customer accounts, the distributor will receive an 
additional rebate after the sale is made, commonly 
known as a “Ship and Debit” rebate. In estimating 
the variable consideration, the Group is required 
to use the expected value method. The Group 
estimates the rebate based on historical discounts 
to each distributor, the distributors’ inventory level 
as of 31 December 2021, and expected sales mix. An 
estimate for this rebate is provided in the accounts, 
reducing the revenue and increasing refund 
liabilities. See note 3.3.

Development costs
Development costs are capitalized in accordance 
with the principles in 2.5 Intangible assets.

In order to determine the amount to be capitalized, 
it is necessary for management to make 
assumptions regarding expected future cash flow, 
and the expected period of benefits. Capitalized 
development costs are subject to amortization on a 
straight-line basis over the period of expected future 
benefits, normally 3-5 years. Uncertainty exists with 
respect to the estimated period of expected future 
benefit, as this depends on the future technological 
development in the market. During 2021 USD 5.6 
million was capitalized. The carrying amount of 
capitalized development costs as of December 31, 
2021 and 2020 was USD 32 million and USD 35 
million respectively.

Leases - Estimating the incremental borrowing rate
The interest rate implicit in the lease cannot readily 
be determined, therefore the incremental borrowing 
rate (IBR) is used to measure lease liabilities.

The lessee's IBR is defined in IFRS 16 as “the rate 
of interest that a lessee would have to pay to 
borrow over a similar term, and with a similar 
security, the funds necessary to obtain an asset of 
a similar value to the right-of-use asset in a similar 
economic environment”.

The Group has a centralized treasury department, 
and all financing is from the parent company 
in order to minimize the costs of finance. The 
subsidiaries are self-financed with low credit risk due 
to cost-plus inter-company invoicing for services, 
and do not enter into financing transactions into 
third parties. The Group entities have stand-alone 
arrangements for lease payments either with 
deposits or bank guarantee. 

33

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSThe IBR reflects what the companies of the Group 
‘would have to pay’ , which requires estimation 
when no observable rates are available (such as 
for subsidiaries that do not enter into financing 
transactions) or when they need to be adjusted to 
reflect the terms and conditions of the lease (for 
example, when leases are not in the subsidiary’s 
functional currency). The Group estimates the IBR 
using observable inputs (such as market interest 
rates) when available and is required to make 
certain entity-specific estimates (such as the 
subsidiary’s standalone credit rating).

2.3 Foreign currency translation
Each entity within the Group has a functional 
currency, which is normally the currency in which the 
entity primarily generates and expends cash. The 
parent company is the most significant entity in the 
Group, and its functional currency is USD.

At entity level, a foreign currency is a currency other 
than the entity’s functional currency. Transactions 
in the profit and loss statement denominated 
in foreign currencies are recorded in the entity’s 
functional currency at the exchange rate prevailing 
at the date of the transaction. Monetary assets 
and liabilities denominated in foreign currencies are 
translated at the exchange rate prevailing at the 
balance sheet date. Currency translation differences 
arising at entity level are recognized in profit or loss.

The Group’s presentation currency is USD, and 
foreign operations are those of the parent 
company’s subsidiaries and branches whose 
functional currency is not USD. On consolidation, 
assets and liabilities of foreign operations are 
translated into USD according to the exchange rates 
prevailing on the balance sheet date. Profit or loss 
items are translated according to monthly average 
exchange rates. Changes in net assets resulting 
from exchange rate movements are recognized 
in other comprehensive income and taken to the 
currency translation reserve.

2.4 Revenue recognition
The Group is in the business of developing and 
selling integrated circuits. Revenue from customers 
is mainly generated from sale of products. Services 
delivered consists of consulting services. The Group 
and the customer do not receive financing from 
the sales, and therefore there are no significant 
financing components to be accounted for 
separately from the revenue transaction. The normal 
credit term is 30-60 days upon delivery. In other 
words, the contract does not require the customer 
to pay in advance or require the customer to pay a 
significant amount after delivery.

Sale of products
Sales of products are mostly made to distributors 
(customers). Revenue from product sales is 
recognized when control of the goods is transferred 
to the customer . The time of delivery is considered 
to be when the goods are transferred to the 
transport carrier. Upon delivery, the Group has the 
right of payment for the asset, the customer has 
legal title to the asset, physical possession has been 
transferred to the customer, and the customer has 
full ownership of the asset.

Revenue recognized on the sale of products is 
measured at the fair value of the consideration 
received or receivable, excluding sales taxes and 
after making allowance for variable considerations 
such as rebates and product returns.

Ship and debit rebate
The Group sells products to certain distributors on 
“ship and debit” terms. It means that the distributor 
may be entitled to a rebate if the distributor sells 
the product to end customers at a price lower than 
the price at which the distributor purchased the 
products from the Group. The difference in price is 
then claimed (debited) by the distributor.

The Ship and Debit rebates are recognized as 
reduction in revenue and an increase in liabilities 
before the sale has taken place.

Stock rotation rights
Some distributors are entitled to limited rights 
of return, referred to as stock rotation rights. 
The Group tracks the distributor's inventory and 
can initiate a stock rotation earlier if a certain 
product is selling better with another distributor. 
As the products have similar margin, there are no 
significant losses for the Group when stock rotations 
are initiated. The Group does not make provisions 
or adjustments for stock rotation unless we expect 
the goods returned to be obsolete. Stock rotation 
provisions are made if necessary, based on most 
likely amount method.

End-customer volume rebates
Some end customers have entered into agreements 
with Nordic to receive a rebate based on their 
purchase quantity and price from the distributor. 
The rebates are recognized as reduction in revenue 
and increase in liabilities before payout by the 
end customer.

Sale of services
Revenue from services is recognized as the services 
are rendered/delivered.

34

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSContract balances
Contract assets
A contract asset is the right to consideration in 
exchange for goods or services transferred to the 
customer. If the Group performs by transferring 
goods or services to a customer before the 
customer pays consideration or before payment is 
due, a contract asset is recognized for the earned 
consideration that is conditional.

Contract assets are subject to impairment 
assessment. Refer to accounting policies on 
impairment of financial assets in note 2.8

Trade receivables
A receivable represents the Group’s right to an 
amount of consideration that is unconditional (i.e., 
only the passage of time is required before payment 
of the consideration is due). Refer to accounting 
policies of financial assets in note 2.9

Contract liabilities
A contract liability is the obligation to transfer 
goods or services to a customer for which the 
Group has received consideration (or an amount 
of consideration is due) from the customer. If a 
customer pays consideration before the Group 
transfers goods or services to the customer, a 
contract liability is recognized when the payment is 
made or the payment is due (whichever is earlier). 
Contract liabilities are recognized as revenue when 
the Group performs under the contract.

Assets and liabilities arising from rights of return
Right of return asset
Right of return asset represents the Group’s right 
to recover the goods expected to be returned by 
customers. The asset is measured at the former 
carrying amount of the inventory, less any expected 
costs to recover the goods, including any potential 
decreases in the value of the returned goods.

The Group updates the measurement of the asset 
recorded for any revisions to its expected level of 
returns, as well as any additional decreases in the 
value of the returned products. As the customers 
are only able to exchange the goods, the Group 
does not have a right of return asset.

Refund liabilities
A refund liability is the obligation to refund some 
or all of the consideration received (or receivable) 
from the customer and is measured at the amount 
the Group ultimately expects it will have to return 
to the customer. The Group updates its estimates 
of refund liabilities (and the corresponding change 
in the transaction price) at the end of each 
reporting period.

Cost to obtain a contract
The Group does not pay commission to employees 
and all costs related to getting a customer order is 
immediately expensed. The amortization period for 
a contract asset would be one year or less, hence 
the Group is able to use the practical expedient and 
expense costs directly.

2.5 Intangible assets
Research and development expenditure

Research costs are expensed as incurred.

Costs associated with development are capitalized 
if the following criteria are met in full:

■  The product or the process is clearly defined 
and the cost elements can be identified and 
measured reliably;

■  The technical feasibility is demonstrated;

■  The product or the process will be sold or used in 

the business;

■  The asset will generate future financial benefits;

■  Sufficient technical, financial and other resources for 

project completion are in place

Costs expensed in prior accounting periods will 
not be capitalized. Depreciation begins when 
the product is transferred from development to 
production. Depreciation is calculated on a straight-
line basis over 5 years. Uncertainty exists with 
respect to the expected period of benefits, as this 
depends on the future technological development in 
the market.

Goodwill
Goodwill acquired in a business combination is 
carried at cost as established at the acquisition 
date, less impairment losses, if any.

Other intangible assets
Other intangible assets comprise identifiable 
intangibles acquired in business combination (IP, 
developed technology), licenses and computer 
software. The assets held by the Group have finite 
useful lives determined by the expected usage of 
the asset by the entity. The assets are amortized on 
a straight-line basis over its estimated useful lives, 
normally 3-5 years.

The other intangible assets are carried at cost less 
accumulated amortization and impairment losses, if 
any. Cost comprises the purchase price of the asset 
(including non-refundable purchase taxes) and any 
costs directly attributable to preparing the asset for 
its intended use. In the case of an asset acquired in 
a business combination, the cost is its fair value at 
the acquisition date.

35

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSThe amortization period and the amortization 
method for intangible assets are reviewed at least 
at the end of each reporting period. Changes in 
the expected useful life or the expected pattern 
of consumption of future economic benefits 
embodied in the asset are considered to modify the 
amortization period or method, as appropriate, and 
are treated as changes in accounting estimates.

2.6 Government grants
Grants received are tax refunds and are classified 
as operating grants. Operating grants are 
accounted for at the same time as the costs they 
are intended to cover. Tax refunds are accounted for 
as a cost reduction. See note 5 and 9.

2.7 Property, plant and equipment
Property, plant and equipment is valued at the 
lower of cost net of accumulated depreciation 
and net realizable value. When an asset is sold or 
discontinued, the gain or loss from the transaction is 
recognized in the income statement. Cost comprises 
the purchase price of the asset including fees/ taxes 
and any direct costs associated with commissioning 
the asset for use.

Repair and maintenance costs are expensed 
when incurred. If repair and maintenance increase 
the value of the asset, the cost will be added to 
the asset on the balance sheet. Depreciation is 
calculated on a straight-line basis over the following 
periods of time:

Office and lab equipment

1-5 years

Computer equipment

3-5 years

Leasehold improvements

5 years

The assets’ residual value, useful lives and methods 
of depreciation are reviewed on an ongoing basis 
and adjusted prospectively, if necessary.

2.8 Impairment of non-financial assets
The Group’s non-financial assets includes:

■  Goodwill

■  Capitalized development expenses

■  Other intangible assets (software and IP)

■  Property, plant and equipment

■  Right-of-use assets

Non-financial assets are tested for impairment 
whenever there is an indication that their carrying 
amounts may not be recoverable. Goodwill and 
intangible assets still under development are subject 
to an annual impairment test.

A CGU of one non-financial asset is the smallest 
group of assets that includes the asset and 
generates cash inflows that are largely independent 
of the cash inflows from other assets or groups 
of assets. Goodwill does not generate cash flows 
independently of other assets and is, therefore, 
tested for impairment at the level of the CGU or 
group of CGUs that are expected to benefit from 
the synergies of the related business combination.

If any indication exists, the Group estimates the 
asset’s recoverable amount. An asset’s recoverable 
amount is the higher of an asset’s or cash 
generating unit’s (CGU) fair value less costs of 
disposal and its value in use.

The recoverable amount is determined for an 
individual asset, unless the asset does not generate 
cash inflows that are largely independent of 
those from other assets or groups of assets. 
When the carrying amount of an asset or CGU 
exceeds its recoverable amount, the asset is 
considered impaired and is written down to its 
recoverable amount.

In determining fair value less costs of disposal, 
recent market transactions are taken into account. 
If no such transactions can be identified, an 
appropriate valuation model is used. These 
calculations are corroborated by valuation multiples 
or other available fair value indicators.

In assessing value in use, the estimated future cash 
flows are discounted to their present value using a 
pre-tax discount rate that reflects current market 
assessments of the time value of money and the 
risks specific to the asset.

2.9 Financial instruments
A financial instrument is any contract that gives rise 
to a financial asset of one entity and a financial 
liability or equity instrument of another entity.

The Group is recognizing a financial asset or 
liability when it becomes a party to the instrument's 
contractual terms.

The Group’s financial assets and liabilities includes 
money market fund, accounts receivable and other 
current receivables, accounts payable, currency 
swap and other depreciation are reviewed on 
an ongoing basis and adjusted prospectively, 
if necessary.

36

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSFinancial assets
Initial recognition and measurement
At initial recognition, the Group measures a 
financial asset at its fair value plus or minus, in the 
case of a financial asset not at fair value through 
profit or loss, transaction costs that are directly 
attributable to the acquisition of the asset. There 
is an exemption for accounts receivables, that do 
not contain a significant financing component 
or for which the Group has applied the practical 
expedient, are measured at the transaction price 
determined under IFRS 15. Refer to the accounting 
policies in section 2.4 Revenue recognition.

Depending of the financial asset’s contractual 
cash flow characteristics and the Group’s business 
model for managing them, the assets are at 
initial recognition and subsequently measured 
at amortized cost, fair value through other 
comprehensive income (OCI) or fair value through 
profit or loss.

Financial assets are classified and measured at 
amortized cost or fair value through OCI, if it gives 
rise to cash flows that are ‘solely payments of 
principal and interest (SPPI)’ on the principal amount 
outstanding. This assessment is referred to as the 
SPPI test and is performed at an instrument level.

The Group’s business model for managing financial 
assets refers to how it manages its financial assets 
in order to generate cash flows. The business 
model determines whether cash flows will result 
from collecting contractual cash flows, selling the 
financial assets, or both.

Subsequent measurement
For purposes of subsequent measurement, financial 
assets are classified in four categories:

■  Financial assets at amortized cost (debt instruments)

■  Financial assets at fair value through OCI 

with recycling of cumulative gains and losses 
(debt instruments)

■  Financial assets designated at fair value through 

OCI with no recycling of cumulative gains and losses 
upon derecognition (equity instruments)

■  Financial assets at fair value through profit and loss 

(held for trading)

The categories relevant for the Group is amortized 
cost, including accounts receivables and other 
current receivables, and fair value through profit or 
loss (held for trading), including money market fund.

The Group measures financial assets at amortized 
cost if both of the following conditions are met:

■  The financial asset is held within a business model 

with the objective to hold financial assets in order to 
collect contractual cash flows, and

■  The contractual terms the financial assets give rise 
on specified dates to cash flows that are solely 
payments of principal and interest on the principal 
amount outstanding

Financial assets at amortized cost are subsequently 
measured using the effective interest rate (EIR) 
method and are subject to impairment. Gains and 
losses are recognized in profit or loss when the 
asset is derecognized, modified or impaired.

Financial assets at amortized cost are subsequently 
at fair value with resulting gains and losses 
recognized in profit or loss.

Derecognition
A financial asset (or, where applicable, a part of a 
financial asset or part of a group of similar financial 
assets) is primarily derecognized (i.e., removed from 
the Group’s consolidated statement of financial 
position) when:

■  The rights to receive cash flows from the asset have 

expired, or

■  The Group has transferred the asset according to 

IFRS 9 paragraph 3.2.4 and 3.2.5

Impairment of financial assets
For trade receivables and contract assets, the 
Group applies a simplified approach in calculating 
expected credit losses (ECLs). The Group does not 
track changes in credit risk, but instead recognizes 
a loss allowance based on lifetime ECLs at each 
reporting date. The Group has established a 
provision matrix that is based on its historical 
credit loss experience, adjusted for forward-
looking factors specific to the debtors and the 
economic environment.

Financial liabilities
Initial recognition and measurement
All financial liabilities are recognized initially at fair 
value and, in the case of loans and borrowings 
and accounts payables, net of directly attributable 
transaction costs.

Subsequent measurement
All financial liabilities are measured at amortized 
cost, except for financial liabilities at fair value 
through profit or loss.

After initial recognition, borrowings are subsequently 
measured at amortized cost using the EIR method. 
Gains and losses are recognized in profit or loss 
when the liabilities are derecognized as well as 
through the EIR amortization process.

Amortized cost is calculated by taking into account 
any discount or premium on acquisition and fees 
or costs that are an integral part of the EIR. The 
EIR amortization is included as finance costs in the 
statement of profit or loss.

37

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSFinancial liabilities at fair value through profit or 
loss include financial liabilities held for trading 
and financial liabilities designated upon initial 
recognition as at fair value through profit or loss.

Financial liabilities are classified as held for trading 
if they are incurred for the purpose of repurchasing 
in the near term. This category includes derivative 
financial instruments (currency swap) entered into 
by the Group that are not designated as hedging 
instruments in hedge relationships as defined 
by IFRS 9.

Gains or losses on liabilities held for trading are 
recognized in the statement of profit or loss. 

Derecognition
A financial liability is derecognized when the 
obligation under the liability is discharged or 
cancelled or expires. When an existing financial 
liability is replaced by another from the same 
lender on substantially different terms, or the terms 
of an existing liability are substantially modified, 
such an exchange or modification is treated as 
the derecognition of the original liability and the 
recognition of a new liability. The difference in the 
respective carrying amounts is recognized in the 
statement of profit or loss.

Offsetting of financial instruments
Financial assets and financial liabilities are offset 
and the net amount is reported in the consolidated 
statement of financial position if there is a currently 
enforceable legal right to offset the recognized 
amounts and there is an intention to settle on a net 
basis, to realize the assets and settle the liabilities 
simultaneously.

2.10 Cash and cash equivalents
Cash and cash equivalents include cash at bank, 
short- term deposits with an original maturity 
of three months or less and money market 
fund. Money market funds are defined as cash 
equivalents because they are highly liquid and not 
subject to material fluctuations in value.

2.11 Inventory
Inventory is valued at the lower of cost and net 
realizable value after deduction for obsolescence. 
Net realizable value is estimated as the selling price 
less cost of completion and the cost necessary to 
make the sale. Costs are determined by using the 
FIFO method. Work in progress includes variable 
cost and non-variable cost which can be allocated 
to items based on normal capacity. Obsolete 
inventory is written down completely.

2.12 Leases
The Group assesses at contract inception whether 
a contract is, or contains, a lease. That is, if the 
contract conveys the right to control the use of an 
identified asset for a period of time in exchange 
for consideration.

The Group applies a single recognition and 
measurement approach for all leases, except for 
short-term leases and leases of low-value assets. 
The Group recognizes lease liabilities to make lease 
payments and right-of-use assets representing the 
right to use the underlying assets.

Right-of-use assets
The Group recognizes right-of-use assets at the 
commencement date of the lease (i.e., the date 
the underlying asset is available for use). Right-
of-use assets are measured at cost, less any 
accumulated depreciation and impairment losses. 
The cost of right-of-use assets includes the amount 
of lease liabilities recognized, initial direct costs 
incurred, and lease payments made at or before 
the commencement date less any lease incentives 
received. Right-of-use assets are depreciated on a 
straight-line basis over the lease term. If ownership 
of the leased asset transfers to the Group at 
the end of the lease term or the cost reflects 
the exercise of a purchase option, depreciation 
is calculated using the estimated useful life 
of the asset.

The Group has used the optional exemption in IFRS 
16 and not accounted lease concessions, such as 
reduction in lease payments, due to Covid-19 as a 
lease modification. The following conditions are met:

■  The reversed consideration is substantially the same 

or less than the original consideration 

■  The reduction in lease payments relates to payments 

due on or before 30 June 2022

■  No other substantive changes have been made to 

the terms of the lease

That means reductions in lease payments are 
accounted for as negative variable lease payments 
and be recognized in profit and loss.

The right-of-use assets are also subject to 
impairment, see note 2.8

38

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSLease liabilities
At the commencement date of the lease, the 
Group recognizes lease liabilities measured at the 
present value of lease payments to be made over 
the lease term. The lease payments include fixed 
payments (including in substance fixed payments) 
less any lease incentives receivable, variable lease 
payments that depend on an index or a rate, and 
amounts expected to be paid under residual value 
guarantees. The lease payments also include the 
exercise price of a purchase option reasonably 
certain to be exercised by the Group and payments 
of penalties for terminating the lease, if the lease 
term reflects the Group exercising the option to 
terminate. Variable lease payments that do not 
depend on an index or a rate are recognized 
as expenses in the period in which the event or 
condition that triggers the payment occurs.

In calculating the present value of lease payments, 
the Group uses its incremental borrowing rate at 
the lease commencement date because the interest 
rate implicit in the lease is not readily determinable. 
After the commencement date, the amount of lease 
liabilities is increased to reflect the accretion of 
interest and reduced for the lease payments made. 
In addition, the carrying amount of lease liabilities 
is remeasured if there is a modification, a change 
in the lease term, a change in the lease payments 
(e.g., changes to future payments resulting from a 
change in an index or rate used to determine such 
lease payments) or a change in the assessment of 
an option to purchase the underlying asset. 

Short-term leases and leases of low-value assets 
The Group applies the short-term lease recognition 
exemption to its short-term leases (i.e., those leases 
that have a lease term of 12 months or less from 
the commencement date and do not contain a 
purchase option) and low-value assets. The low 
value election is made on a lease-by-lease basis, 
and it refers to underlying assets with a value in 
order of USD 5 000 or less. Lease payments on 
short-term leases and leases of low value assets are 
recognized as expense on a straight- line basis over 
the lease term.

2.13 Income taxes
Income tax expenses consist of taxes due and 
changes to the net deferred tax assets or liabilities.

Deferred tax assets and liabilities are calculated 
based on the differences between the carrying 
value of assets and liabilities in the financial 
accounts and their tax basis when such differences 
are considered at temporary in nature.

Deferred tax assets are recognized to the extent 
that it is probable that the individual company will 
have sufficient taxable income in later periods to 
utilize the tax assets.

Deferred tax liabilities are accounted for at 
the nominal value and classified as long-term 
obligations in the balance sheet.

Deferred income tax relating to items recognized in 
Other Comprehensive Income (“OCI”) or directly in 
equity is recognized outside profit or loss.

The parent company pays its tax obligation in NOK 
and the fluctuations between the NOK and the 
USD impact the financial items. The Group’s legal 
entities that do not have their tax base in USD are 
exposed to changes in the USD/ tax base currency 
rates. Effects within the current year are classified 
as tax expense.

2.14 Provisions
Provisions (such as legal claims and contractual 
severance) are recognized when the Group has 
a present obligation (legal or constructive) as a 
result of a past event, it is probable that economic 
benefits will be required to settle the obligation 
and a reliable estimate can be made. Provisions are 
reviewed each balance sheet date and the level 
reflects the best estimate of the obligation. When 
the time value is insignificant, the amount of the 
provision will be equal to the estimated expenditure 
required to settle the obligation. When the time 
effect is significant, the amount of the provision will 
be equal to the present value of future estimated 
expenditures to settle the obligation.

2.15 Employee benefits
Defined benefit pension plans
The Group had a defined benefit pension plan for 
its employees who were hired before December 
31, 2007. The group has also established a similar 
plan for employees in the Philippines. This plan 
is still open. Pension plan assets are valued at 
fair value. The defined benefit scheme in Norway 
was converted to a defined contribution scheme. 
In connection with the transfer, the employees 
received a “Paid up benefit” for all earned benefits 
in the defined benefit plan. As there exist certain 
obligations related to retirees and employees on 
sick leave, an actuarial calculation is performed 
and a liability for these employees is included as of 
December 31, 2021.

Defined contribution pension plans
Employees hired after January 1, 2008 have a 
defined contribution pension plan described in 
note 18. 

39

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSShare based compensation
The Group grants restricted stock units and other 
awards over its ordinary shares to all employees. 
The cost of equity-settled transactions is determined 
by the fair value at the date when the grant is 
made using an appropriate valuation model, further 
details of which are given in note 19.

2.16 Treasury shares
When treasury shares are purchased, the purchase 
price, including directly attributable costs are 
recognized as changes in equity. Treasury shares 
are presented as a reduction of equity. Gains or 
losses on transactions in treasury shares are not 
recognized in the income statement.

That cost is recognized in employee benefits 
expense, together with a corresponding increase 
in equity (other paid in capital), over the period 
in which the service and, where applicable, the 
performance conditions are fulfilled (the vesting 
period). See note 19.

Accounting treatment of social security tax is not 
treated in IFRS 2. Social security tax is accrued over 
the vesting period based on the actual value of the 
stock unit.

2.17 Cash flow statement
The cash flow statement is prepared in accordance 
with the indirect method. Cash and cash equivalents 
include cash, bank deposits and other short-term 
liquid investments.

2.18 Events after the balance sheet date
Information available after the balance sheet 
date and applicable to conditions existing at the 
balance sheet date is included in the preparation of 
the financial statements. Events after the balance 
sheet date that do not affect the Group’s financial 
position as of the balance sheet date, but that will 
affect the Group’s financial position in the future, 
are disclosed if they are significant. See note 24.

40

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 3: Revenues

All figures in USD 1000

3.1 Disaggregated revenue information
Revenue classified by end product applications:
The Group focuses on the sale of standard 
components for wireless communication. These 
wireless components are broken into the following 
end product areas: Consumer Electronics, 
Wearables, Building and Retail, Healthcare and 
Others. In 2021, wireless components accounted for 
96.1% of sales versus 96.8% in 2020. In addition to 
standard components, the Group sells customer-
specific ASIC components (Application Specific 
Integrated Circuits) and related Consulting Services.

GROUP

2021

2020 Revenue

221 623

163 131 Consumer Electronics

68 761

62 967 Wearables

163 765

81 871 Building/Retail

61 452

37 830 Healthcare 

71 408

46 364 Others

587 009

392 163 Wireless Components

17 035

6 527 Long-range (cellular IoT)

6 083

6 297 ASIC components

400

0

230 Consulting services

0 Management fee

The Group recognized the first long-range 
(cellular IoT) revenue in the second half of 2018. 
Most of Nordic’s cellular IoT customers are still in 
the development phase or in early commercial 
phase. When cellular IoT revenue materialize, 
Nordic will report the revenue in the relevant end 
product areas.

PARENT

2021

2020

221 623

163 131

68 761

62 967

163 765

81 871

61 452

37 830

71 408

46 364

587 009

392 163

17 035

6 083

400

6 527

6 297

230

1 049

1 025

611 577

406 242

610 528

405 217 Total revenue from contracts with customers

Revenue classified by customers’ location:
The Group also classifies its revenues on a geographical basis according to its customers’ location.

GROUP

2021

2020

53 116

37 726 Europe

61 663

34 038 Americas

495 749

333 453 Asia/Pacific

610 528

405 217 Total revenue from contracts with customers

PARENT

2021

2020

53 886

38 519

61 910

34 234

495 781

333 488

611 577

406 242

The Group sells its components to distributors, which then sell components onward to electronics 
manufacturers which build end products and sell them to customers across the world. One distributor 
represented more than 10% of the Group’s total revenues in 2021 with 28% of total revenues. This distributor 
is based in Asia. In comparison, two distributors represented more than 10% of the Group’s total revenues in 
2020 with 30% and 11% respectively.

41

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSRevenue from contracts with customers classified by timing of revenue recognition:

GROUP

2021

2020

610 128

404 987 Goods transferred at a point in time

400

230 Services transferred over time

610 528

405 217 Total revenue from contracts with customers

PARENT

2021

2020

610 128

404 987

1 449

1 255

611 577

406 242

3.2 Contract balances
Trade receivables are non-interest bearing and are generally on terms of 30 to 60 days. See note 22 for 
further details.

GROUP

2021

2020

141 748

88 034 Trade receivables

3.3 Right of return assets and refund liabilities

GROUP

2021

2020

20 530

16 184 Refund liability – arising from ship & debit

PARENT

2021

2020

141 748

88 034

PARENT

2021

2020

20 530

16 184

10 258

8 515 Refund liability – arising from end-customer volume rebates

10 258

8 515

3.4 Performance obligations
The performance obligations for the sale of components is normally satisfied upon the time of delivery. 
Payment is generally due 30 to 60 days within delivery.

For the consulting services the performance obligation is satisfied over-time and the customer is generally 
invoiced at month-end for the work performed.

The Group has decided to use the practical expedient and not disclose unsatisfied or partially unsatisfied 
performance obligations. All remaining performance obligations are expected to be recognized 
within one year.

42

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 4: Cost of materials / inventory 

All figures in USD 1000

GROUP

2021

2020

276 403

199 578 Purchased materials

7 012

-8 888 Changes in inventory

283 415

190 690 Cost of materials

9 704

18 751 Raw materials

18 440

17 566 Work in Progress

26 799

25 638 Finished goods

54 943

61 955 Total inventory

5 712

3 242 Amount Written down

PARENT

2021

2020

276 403

199 578

7 012

-8 888

283 415

190 690

9 704

18 751

18 440

17 566

26 799

25 638

54 943

61 955

5 712

3 242

As Nordic Semiconductor is a fabless manufacturer, all inventories, including raw materials and finished 
goods, are located at sub-contractors.

Note 5: Other operating expenses

All figures in USD 1000

GROUP

2021

2020

19 580

12 733 Service and maintenance

15 527

11 470 Other consultancy fees

1 582

1 558

6 198

-108

-1 515

1 068

8 207

—

953 Office rental expenses

1 005 Office equipment

6 180 Material and components

-22 Tax grant

-2 647 Capitalized development expenses

1 246 Travel and meeting expenses

5 036 Other operating expenses

— Other operating expenses intercompany

52 097

35 954 Total other operating expenses

Auditor remuneration, excl. of VAT
Fees to the auditor are included in consultancy fees above.

GROUP

2021

90

4

3

96

2020

69 Statutory audit services

— Tax advisory services

8 Other audit related services

78 Total revenues

PARENT

2021

2020

18 288

11 658

1 030

1 201

5 142

-108

11 877

8 059

615

797

5 581

-22

-1 515

-2 647

742

891

7 297

4 780

86 715

54 394

130 450

84 325

PARENT

2021

2020

72

—

3

74

61

—

8

69

43

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 6: Net financial items

All figures in USD 1000

GROUP

2021

2020

340

389

730

822

307

-739

390

340

515 Interest income

127 Other financial income

642 Financial income

768 Interest expenses on lease liabilities

648 Other financial expense

2 016 Foreign exchange loss (net)

3 432 Financial expense

-2 790 Net financial expense

Note 7: Tax

All figures in USD 1000

GROUP

2021

2020 Tax consists of

-17 427

-4 976 Tax payable

2 663

-1 325

855 Change in deferred tax / benefit

-413 Prepaid taxes during the year

-16 089

-4 534 Tax expense

GROUP

2021

2020 Reconciliation of nominal and actual tax expense

87 260

42 925 Profit before tax

-19 197

-9 444 Tax at nominal rate 22 %

47

-62 Tax effect of different tax rates in other countries

4 605

2 551 Tax effect permanent differences

—

25

-104 Tax effect of tax benefit not being recognized in the balance sheet

620 Excess tax provision previous year

-1 568

1 904 Currency effect from translation to USD

-16 089

-4 534 Tax expense

PARENT

2021

2020

350

387

737

733

268

515

127

642

768

568

-704

2 014

297

441

3 350

-2 708

PARENT

2021

2020

-17 181

-4 889

2 719

-156

600

725

-14 618

-3 564

PARENT

2021

2020

80 305

39 363

-17 667

-8 660

-89

-99

4 679

2 694

—

25

—

620

-1 566

1 881

-14 618

-3 564

The group has not recognized net deferred tax benefit of USD 129 000 related to the subsidiary in India.

44

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSBalance sheet

Income statement

Other. Comp. income

2020

2021

2020

GROUP

Deferred taxes:

Inventory

Fixed Assets

Leasing

Options (share based payments)

Pension obligation

Financial instrument

Accruals

2021

1 517

2 439

36

1 729

122

114

489

2020

494

1 825

157

982

99

66

145

2021

1 023

613

-121

747

-10

48

344

Deferred tax benefit - gross

6 446

3 769

2 644

Gain and loss account

Net other tax-obligations

Deferred tax obligation - gross

Currency effect of translation to USD

33

82

115

43

58

101

-10

24

14

165

Net deferred tax benefit (obligation)

6 331

3 668

Deferred tax expense

2 795

730

33

Balance sheet

Income statement

Other. Comp. income

2020

2021

2020

PARENT

Deferred taxes:

Inventory

Fixed Assets

Leasing

Options (share based payments)

Pension obligation

Financial instrument

Accruals

2021

1 517

2 044

36

1 729

122

114

302

2020

494

1 187

157

982

99

66

145

2021

1 023

857

-121

747

-10

48

157

Deferred tax benefit - gross

5 864

3 130

2 700

Gain and loss account

Net other tax-obligations

Deferred tax obligation - gross

Currency effect of translation to USD

33

82

115

43

58

101

-10

24

14

127

Net deferred tax benefit (obligation)

5 749

3 029

Deferred tax expense

2 813

513

33

33

19

33

19

0

19

33

19

33

19

0

0

-151

417

143

275

12

66

123

886

-9

58

49

-107

-151

162

143

275

12

66

123

631

-9

58

49

-69

0

19

45

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSGroup

2021

2020 Reconciliation of net deferred tax obligation

3 668

2 795

33

-165

2 813 Opening balance as of 1.1

730 Tax expense recognized in the P&L

19 Tax expense recognized in OCI

107 Currency effect from translation to USD

Parent

2021

3 029

2 813

33

-127

2020

2 429

513

19

69

6 331

3 668 Net deferred tax obligation / benefit 31.12

5 748

3 029

Group

2021

2020 Net deferred tax recognized in OCI as of 31.12

33

33

19 Net gain on actuarial gains and losses

19 Total tax other comprehensive income

Note 8: Shares outstanding

Basis for calculation of basic earnings per share

Earnings for the year (USD ‘000)

Weighted average number of outstanding shares (‘000)

Earnings per share (USD)

Basis for calculation of fully diluted earnings per share

Earnings for the year (USD ‘000)

Weighted average number of outstanding shares (‘000)

Earnings per share (USD)

The number of shares was as follows:

Parent

2021

2020

33

33

19

19

2021

71 171

2020

38 391

190 961

181 021

0.37

0.21

71 171

38 391

193 042

194 704

0.37

0.20

Date

01.01.2021

31.12.2021

Number of shares issued

Shares outstanding

Balance at beginning of period

Balance at end of period

192 781 600

192 781 600

190 958 613

190 962 563

Options granted to employees are considered to be potential ordinary shares. They have been included in 
the determination of diluted earnings per share if they have been vested at the reporting date, and to the 
extent to which they are dilutive. The options have not been included in the determination of basic earning 
per share. Details relating to the options are set out in note 19.

46

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 9: Payroll expenses 

All figures in USD 1000

GROUP

2021

2020

Combined expenses for salary and other compensation  
are distributed as follows: 

104 476

72 522 Salary and vacation pay

25 239

18 553 Other compensation

14 011

9 520 Payroll tax

-431

-535 Tax grant

10 650

6 898 Defined contribution pension

-4 121

-5 747 Capitalized development expenses (hourly costs)

149 824

101 211 Total

1 090

831 Weighted average number of full time employees

GROUP

2021

2020 Employees as of December 31, are distributed as follows:

518

273

93

52

49

49

48

34

28

19

13

5

4

3

3

2

2

1

1

449 Norway

211 Finland

74 Poland

39 India

46 USA

37 Taiwan

23 UK

31 Philippines

18 Sweden

17 China

15 Hong Kong

4 South Korea

3 Germany

4 Japan

1 The Netherlands

2 Spain

2 Australia

1 Switzerland

— Singapore

1 197

977 Total

PARENT

2021

2020

56 579

42 462

16 747

12 804

11 869

9 007

-431

-535

3 840

3 453

-4 121

-5 747

84 483

61 444

599

520

PARENT

2021

518

2020

449

—

—

—

—

49

—

34

—

19

—

5

—

—

3

2

2

1

1

634

—

—

—

—

37

1

31

4

17

15

4

—

—

1

2

2

1

—

564

47

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 10: Executive compensation 

All figures in USD 1000

Note 10.1: Management remuneration
Pursuant to the changes in the Public Limited Liability Companies Act, i.e. addition of a new section 6-16 
(b), and associated new regulations, Nordic will publish a separate management remuneration report 
for presentation at the Annual General Meeting on 28 April 2022, containing detailed information on 
remuneration to Executive Management Team (EMT) for the reporting year 2021. The remuneration report 
includes detailed information on EMTs remuneration complementing the numbers presented below. This 
includes an overview of the operational, financial, environmental, social and governance targets that form 
basis for the short-term incentives.

EMT members’ salaries and other benefits, including long term incentive plans are presented in the table 
below.  Unless otherwise stated, Nordic did not have any loans to or guarantees made on behalf of any of 
the EMT members in 2021 and 2020.

The remuneration paid or awarded to the CEO and other members of the EMT was aligned with Nordics’s 
remuneration policy. The policy is available in its full at nordicsemi.com.

Total compensation* expensed during the year for the CEO and other executives:

2021

Svenn-Tore Larsen, CEO

Pål Elstad, CFO/EVP Finance

Svein Egil Nielsen, CTO/EVP R&D and Strategy

Geir Langeland, EVP Sales & Marketing

Ebbe Rømcke, SVP Quality & Sustainability

Ole Fredrik Morken, EVP Supply Chain****

Marianne Frydenlund, SVP Legal

Ståle Ytterdal, SVP IR & Strategic Sales

Kjetil Holstad, EVP Product Management

Katarina Finneng, EVP People & Communications

Salary

Bonus 
**

Options 
***

RSUs & 
PSUs

Other 
Comp. 

Pension 
expenses

488

289

327

306

203

328

182

224

208

239

270

143

162

168

96

109

90

97

101

118

11

7

8

7

5

6

2

5

4

6

237

112

128

132

75

90

68

78

74

69

4

2

2

2

2

2

2

2

2

2

18

18

18

18

18

18

18

18

18

18

Total

1 027

571

645

633

399

552

361

424

407

451

Total

2020

2 794

1 355

60

1 063

19

179

5 470

Salary

Bonus 
**

Options 
***

RSUs & 
PSUs

Other 
Comp. 

Pension 
expenses

Total

Svenn-Tore Larsen, CEO

Pål Elstad, CFO/EVP Finance

Svein Egil Nielsen, CTO/EVP R&D and Strategy

Geir Langeland, EVP Sales & Marketing

Ebbe Rømcke, SVP Quality & Sustainability

Ole Fredrik Morken, EVP Supply Chain****

Marianne Frydenlund, SVP Legal

Ståle Ytterdal, SVP IR & Strategic Sales

Kjetil Holstad, EVP Product Management

Katarina Finneng, EVP People & Communications

412

245

278

262

173

299

152

200

173

190

185

111

125

116

74

84

70

77

75

91

33

21

23

22

12

21

5

10

7

5

57

31

36

33

21

26

19

20

20

17

1

2

2

2

2

2

1

2

2

3

15

15

15

15

15

15

15

15

15

15

704

426

480

449

297

446

262

324

291

322

Total

2 384 1 008

159

280

19

150

4 001

*Management compensation is paid in NOK. Exchange rate for 2021: 8.56 and 2020:9.41 
**Bonus 2020 is edited to earned during the year from paid during the year
***Option cost is the expense of fair value of options based on Black Scholes calculation
****Includes expat allowances (housing, school, etc.)

48

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSThe Group has granted EMT members the following RSUs and performance shares (PSUs):

EMT member

2021

2020

Svenn-Tore Larsen, CEO

10 933 RSUs

6 213 PSUs

10 621 RSUs

10 621 PSUs

Pål Elstad, CFO/EVP Finance

3 056 RSUs

3 056 PSUs

6 345 RSUs

6 345 PSUs

Svein Egil Nielsen, CTO/EVP R&D and Strategy

3 455 RSUs

3 455 PSUs

7 172 RSUs

7 172 PSUs

Geir Langeland, EVP Sales & Marketing

6 139 RSUs

3 189 PSUs

6 621 RSUs

6 621 PSUs

Ebbe Rømcke, SVP Quality & Sustainability

2 059 RSUs

2 059 PSUs

4 276 RSUs

4 276 PSUs

Ole Fredrik Morken, EVP Supply Chain***

2 325 RSUs

2 325 PSUs

5 241 RSUs

5 241 PSUs

Marianne Frydenlund, SVP Legal

1 927 RSUs

1 927 PSUs

4 000 RSUs

4 000 PSUs

Ståle Ytterdal, SVP IR & Strategic Sales

2 066 RSUs

2 066 PSUs

4 414 RSUs

4 414 PSUs

Kjetil Holstad, EVP Product Management

2 156 RSUs

2 156 PSUs

4 276 RSUs

4 276 PSUs

Katarina Finneng, EVP People & Communications

2 524 RSUs

2 524 PSUs

5 241 RSUs

5 241 PSUs

During 2021 the executives exercised the following options:

Executives

Grant year

Number 
of options 
exercised

Strike price  
in NOK

Cash payout 
in USD 1000

Svenn-Tore Larsen, CEO

Pål Elstad, CFO/EVP Finance

Svein Egil Nielsen, CTO/EVP R&D and Strategy

Geir Langeland, EVP Sales & Marketing

Ebbe Rømcke, SVP Quality & Sustainability

Ole Fredrik Morken, EVP Supply Chain***

Marianne Frydenlund, SVP Legal

Ståle Ytterdal, SVP IR & Strategic Sales

Kjetil Holstad, EVP Product Management

Katarina Finneng, EVP People & Communications

2016

2018

2019

2016

2018

2019

2018

2019

2016

2018

2019

2018

2019

2016

2018

2019

2018

2019

2016

2018

2019

2018

2019

2019

65 575

62 000

25 442

43 804

42 000

15 761

42 000

18 763

43 804

42 000

16 511

21 000

10 507

23 804

42 000

13 134

5 000

8 631

15 000

15 000

11 633

10 000

9 381

13 333

47.72

47.27

45.10

47.72

47.27

45.10

47.27

45.10

47.72

47.27

45.10

47.27

45.10

47.72

47.27

45.10

47.27

45.10

47.72

47.27

45.10

47.27

45.10

45.10

729

682

267

487

462

165

462

197

487

462

173

231

110

264

462

138

55

91

167

165

122

110

99

140

*The RSU for management vest after three years for management two years for employees
** Not Board Employee Representative for this period
*** Purchased shares, no cash payout from the company

49

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 10.2: Board remuneration

Total compensation expensed for Board Members

Birger Steen, Chair

Inger Berg Ørstavik, Board Member

Endre Holen, Board Member

Jan Magnus Frykhammar, Board Member

Øyvind Birkenes, Board Member

Annastiina Hintsa, Board Member

Anita Huun, Board Member

Jon Helge Nistad, Board Employee Representative (Board remuneration only)

Asbjørn Sæbø, Board Employee Representative (Board remuneration only)

Susheel Nuguru, Board Employee Representative (Board remuneration only)

Morten Dammen, Board Employee Representative (Board remuneration only)

Joel Stapleton, Board Employee Representative (Board remuneration only)

2021

132

2020

120

57

72

65

50

50

57

18

0

18

18

18

53

50

62

45

45

53

11

3

11

11

8

Total

554

472

50

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 11: Fixed assets

All figures in USD 1000

GROUP

2021

Opening balance

Additions

Acqusition cost as of 31.12

Opening balance

Depreciation expenses

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

PARENT

2021

Opening balance

Additions

Acqusition cost as of 31.12

Opening balance

Depreciation expenses

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

GROUP

2020

Opening balance

Additions

Additions from business combinations

Office and lab 
equipment

Computer 
equipment and 
machinery

Fixture 
and 
fittings

Property

Total

30 055

7 925

37 980

18 725

6 468

25 192

12 788

53 470

5 556

12 536

1 159

66 006

6 716

39 302

3 104

8 697

854

47 999

3 958

333

—

333

—

—

0

89 414

21 619

111 034

61 131

16 019

77 149

18 007

2 757

333

33 885

Office and lab 
equipment

Computer 
equipment and 
machinery

Fixture 
and 
fittings

Property

Total

20 565

4 917

25 482

11 031

4 532

15 563

9 919

50 051

4 795

11 840

674

61 891

5 468

37 014

2 737

8 368

667

45 382

3 405

333

—

333

—

—

0

16 509

2 064

333

75 743

17 430

93 174

50 782

13 567

64 349

28 824

Office and lab 
equipment

Computer 
equipment and 
machinery

Fixture 
and 
fittings

Property

Total

25 113

4 881

60

45 386

4 735

8 025

58

814

6

333

—

—

333

—

—

0

75 568

13 721

124

89 414

48 943

12 188

61 131

14 168

2 453

333

28 284

51

Acqusition cost as of 31.12

30 055

53 470

5 556

Opening balance

Depreciation expenses

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

12 957

5 768

18 725

11 330

33 670

2 317

5 632

787

39 302

3 104

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSPARENT

2020

Opening balance

Additions

Office 
and lab 
equipment

Computer 
equipment 
and 
machinery

16 789

3 775

42 311

7 739

Acqusition cost as of 31.12

20 565

50 051

Opening balance

Depreciation expenses

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

GROUP AND PARENT

Estimated useful life

7 477

3 554

11 031

9 533

31 615

5 400

37 014

13 037

Fixture and 
fittings

Property

Total

4 095

699

4 795

2 084

653

2 737

2 057

333

—

333

—

—

0

333

63 529

12 213

75 743

41 176

9 607

50 782

24 960

3 - 5 years

3 - 4 years

5 years

Depreciation method

Straight-line

Straight-line

Straight-line

No 
depreciation

Total depreciation expenses consist of depreciation of fixed assets and depreciation of intangible assets 
(note 12).

Impairment
There has been no indications of impairment losses 
during the year.

Change in estimate with respect to useful lives and 
depreciation methods
There has been no basis for changing useful lives 
and depreciation methods during the year.

Non-depreciable property assets:
The Parent company has an apartment in 
Trondheim for use by employees in the Oslo office 
while in Trondheim. The apartment is assessed at 
acquisition cost. The residual value is expected to 
be at least equal to the book value.

Scrapped capital assets
All capital assets that are ready to be scrapped 
have been fully depreciated and have no residual 
book value.

Capital assets temporarily out of operation
The Group has no capital assets that are temporary 
out of operation.

52

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 12: Intangible assets

All figures in USD 1000.

GROUP

2021

Acquisition cost

Opening balance

Additions

Acqusition cost as of 31.12

Accumulated depreciation

Opening balance

Depreciation expenses

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

PARENT

2021

Acquisition cost

Opening balance

Additions

Acqusition cost as of 31.12

Accumulated depreciation

Opening balance

Depreciation expenses

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

Software 
and other 
intangible 
assets

Capitalized 
development 
expenses

Goodwill

Total

47 799

3 096

50 896

27 894

7 238

35 132

15 764

74 373

5 646

80 019

39 811

8 665

48 477

31 542

2 393

-7

2 386

—

—

0

2 386

124 566

8 735

133 302

67 705

15 904

83 610

49 693

Software 
and other 
intangible 
assets

Capitalized 
development 
expenses

Goodwill

Total

46 517

2 870

49 387

27 231

6 924

34 155

15 232

74 373

5 644

80 017

39 811

8 665

48 476

31 541

249

—

249

—

—

0

249

121 140

8 514

129 653

67 042

15 589

82 631

47 022

PARENT

49 886

25 335

75 221

80 866

Estimated useful life

3 - 10 years

1 - 5 years

No 
depreciation

Depreciation method

Straight-line

Straight-line

NA

GROUP

R&D expenses: 

102 189 Personnel expenses

37 211 Other operating expenses

139 400 Total cost recognized in income statement

145 046 Total cost for R&D (incl. capitalized development cost)

Expensed research and development activities relate to new technologies and new services and products.

53

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSImpairment
There has been no indications of impairment losses during the year.

Change in estimate with respect to useful lives and depreciation methods
There has been no basis for changing useful lives and depreciation methods during the year.

GROUP

2020

Acquisition cost

Opening balance

Additions

Additions from business combinations

Acqusition cost as of 31.12

Accumulated depreciation

Opening balance

Depreciation expenses

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

Software 
and other 
intangible 
assets

Capitalized 
development 
expenses

Goodwill

Total

33 231

3 121

11 447

47 799

21 824

6 070

27 894

19 905

65 976

8 398

—

74 373

31 986

7 825

39 811

34 563

—

—

2 393

2 393

—

—

0

2 393

99 207

11 518

13 840

124 566

53 810

13 895

67 705

56 861

54

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSPARENT

2020

Acquisition cost

Opening balance

Additions

Additions from business combinations

Acqusition cost as of 31.12

Accumulated depreciation

Opening balance

Depreciation expenses

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

Software 
and other 
intangible 
assets

Capitalized 
development 
expenses

Goodwill

Total

32 533

2 539

11 445

46 517

21 413

5 818

27 231

19 286

65 976

8 398

—

74 373

31 985

7 825

39 811

34 563

—

—

249

249

—

—

0

249

Estimated useful life

Depreciation method

3 - 10 years

1 - 5 years

No 
depreciation

Straight-line

Straight-line

NA

GROUP

R&D expenses:

65 242 Personnel expenses

23 796 Other operating expenses

89 038 Total cost recognized in income statement

97 436 Total cost for R&D (incl. capitalized development cost)

98 509

10 937

11 694

121 140

53 399

13 643

67 042

54 098

PARENT

34 968

16 607

51 575

59 973

55

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 13: Subsidiaries

All figures in USD 1000

The following subsidiaries have been included in the financial statements:

Subsidiaries consolidated in

Established Year

Location Share Ownership

Voting Rights

Nordic Semiconductor Inc

Nordic Semiconductor Poland S.P z o.o

Nordic Semiconductor Finland OY

Nordic Semiconductor Japan KK

Nordic Semiconductor Germany GmbH

Nordic Semiconductor Norway AS

Nordic Semiconductor UK Limited

Nordic Semiconductor India Pvt. Ltd

Nordic Semiconductor Sweden AB

Nordic Semiconductor Hong Kong 
Limited

Nordic Semiconductor (Shenzhen) Limited  

2006

2013

2014

2017

2018

2020

2020

2020*

2020**

2021

2021

USA

Poland

Finland

Japan

Germany

Norway

UK

India

Sweden

Hong Kong

China

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Subsidiaries as of 31 December 2021

Ownership

Share of votes

Net profit 2021

Equity 31. Dec 
2021

Nordic Semiconductor Inc, USA

Nordic Semiconductor Poland S.P z o.o

Nordic Semiconductor Finland OY

Nordic Semiconductor Japan KK

Nordic Semiconductor Germany GmbH

Nordic Semiconductor Norway AS

Nordic Semiconductor UK Limited

Nordic Semiconductor India Pvt. Ltd

Nordic Semiconductor Sweden AB

Nordic Semiconductor Hong Kong 
Limited

Nordic Semiconductor (Shenzhen) Limited

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

347

555

3 375

-20

4

1 505

397

580

243

39

0

2 689

1 713

15 234

92

84

3 377

1 635

1 405

308

52

0

*Company was previously called Imagination Technologies Hyderabad Pvt Ltd, it was acquired by Nordic Semiconductor Norway AS 31.12.2020. 
**Company was previously called Imagination Technologies AB, it was acquired by Nordic Semiconductor Norway AS 31.12.2020. 

56

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTS■	 All intellectual property (IP) is owned by Nordic Semiconductor ASA. Nordic Semiconductor ASA is the ultimate 

parent company of the Group. All subsidiaries invoice Nordic Semiconductor ASA according to the Group's transfer 
pricing policy.

■  Nordic Semiconductor Inc is a market development and product promotion and support company, but has since 

2016 run a small R&D department as well.

■  Nordic Semiconductor Poland Sp. z.o.o. is an extension of the software development team in the parent company.

■  Nordic Semiconductor Finland OY is a development company, working with mainly long range technology. The 

R&D team in Finland works closely alongside the rest of the R&D teams in the Group.

■  Nordic Semiconductor Japan KK is a market development and product promotion and support company,

■  Nordic Semiconductor Germany GmbH is a market development and product promotion and support company,

■  Nordic Semiconductor Norway AS is the parent company of Nordic Semiconductor UK Limited, Nordic 

Semiconductor India Pvt. Ltd, Nordic Semiconductor Sweden AB, Nordic Semiconductor Hong Kong Limited  and 
Nordic Semiconductor (Shenzhen) Limited.

■	 Nordic Semiconductor UK limited is a development company, working with Wi-Fi and PMIC technology. The R&D 

team in the UK works closely alongside the rest of the R&D teams in the Group.

■  Nordic Semiconductor India Pvt. Ltd is a development company, working with Wi-Fi technology. The R&D team in 

India works closely alongside the rest of the R&D teams in the Group.

■	 Nordic Semiconductor Sweden AB is a development company, working mainly with Wi-Fi technology. The R&D 

team in Sweden works closely alongside the rest of the R&D teams in the Group.

■  Nordic Semiconductor Hong Kong Limited is a market development and product promotion and 

support company.

■  Nordic Semiconductor (Shenzhen) Limited had no activities in 2021. From 2022 it will be a market development and 

product promotion and support company,

57

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 14: Accounts Receivable

All figures in USD 1000

GROUP

2021

2020

141 748

88 034 Gross receivables

236

— Provision for doubtful accounts

141 984

88 034 Accounts Receivable, net

Note 15: Intercompany

All figures in USD 1000

PARENT

Loan to group companies

Receivables group companies

Total

Payables

Accounts payable, group companies

Total

PARENT

Service fee for management services 

Total revenue intercompany

Service fee for R&D and product promotion

Total intercompany expenses

Note 16: Cash and cash equivalents

All figures in USD 1000

GROUP

PARENT

2021

2020

141 748

88 034

236

—

141 984

88 034

2021

—

1 692

1 692

—

2020

2 551

1 070

3 621

—

25 596

17 268

25 596

17 268

2021

1 049

1 049

2020

1 025

1 025

86 715

54 394

86 715

54 394

PARENT

2021

2020 Cash and cash equivalents as of the balance sheet date were as follows: 

2021

2020

223 786

183 644 Cash at bank

2 285

4 202 Restricted cash (witholding tax account)

53 259

54 701 Money market funds

217 886

179 712

2 285

4 202

53 259

54 701

279 330

242 547 Cash and cash equivalents in statement of financial position

273 430

238 615

■	 Cash at banks earns interest at floating rates based on daily bank deposit rates.

■	 The parent company presents total bank deposits in the international cash pool, while Nordic Semiconductor OY 
presents its share of the international cash pool as a receivable from group company. Nordic Semiconductor ASA 
and Nordic Semiconductor OY participate in the cash-pool, which is operated by Danske Bank.

■	 Restricted deposits is held by Nordic Semiconductor ASA, and are subject to regulatory restrictions and are 

therefore not available for general use by the entities within the group.

■	

Interest on bank deposit is set to floating rates based on daily bank deposit rates.

For information on liquidity risk, see Note 23: Financial risk management.

58

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 17: Share capital and shareholder information

Share capital
The share capital in Nordic Semiconductor as of December 31, 2021 consists of one share class with a total 
of 192 781 600 shares with a face value of NOK 0.01, with a total share capital of NOK 1 927 816. Each share 
grants the same rights in the company, and in the event of any increase in capital, existing shareholders have 
pre-emptive rights for any new shares.

During the year the following changes have been made in the number of shares, share capital and 
share premium:

GROUP

Number of shares

Share capital  
(USD 1000)

Treasury shares  
(USD 1000)

Share premium  
(USD 1000)

Holdings as of 1.1

192 781 600 179 781 600

317

303

-3

-5

235 448

113 355

2021

2020

2021

2020

2021

2020

2021

2020

Issue of share 
capital

Change in treasury 
shares

13 000 000

14

122 093

2

Holdings as of 31.12

192 781 600 192 781 600

317

317

-3

-3

235 448

235 448

Long-Term Incentive plan
With reference to the annual general meeting, on 
April 20, 2021, Nordic Semiconductor approved 
a Restricted Stock Unit (RSU) program for all 
employees, and a combination of RSUs and 
Performance Shares for Executive Management.

See note 19 for further information.

Dividend
No dividend was paid during 2021.

Treasury shares
The Company owned 1,819,037 treasury shares on 
December 31, 2021. At January 1, 2021, the Company 
owned 1,822,987 treasury shares. Based on a 
resolution of the annual general meeting of April 
20, 2021, the Board has authority to purchase the 
company’s own shares with a limit of a face value 
of NOK 192 000 through one or more transactions. 
This authority is limited to 9.96% of the company’s 
share capital, and the price per share that the 
company may pay for shares shall not be lower 
than the face value and not higher than NOK 300. 
This authority applies until the company’s regular 
general meeting in 2022, and by June 30, 2022 the 
latest.

59

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSShareholder overview
The largest shareholders in Nordic Semiconductor ASA were as follows as of December 31, 2021 (based on 
shareholder register):

Shareholder

Folketrygdfondet

Accelerator Limited

Capital Research and Management

Invesco Advisers

Hardman Johnston Global Advisors

DNB Asset Management

Danske Bank

The Vanguard Group

Oberweis Asset Management

Alfred Berg Kapitalforvaltning

KLP Kapitalforvaltning

Contour Asset Management

Summit Investment Partners

Passesta

BlackRock Fund Advisors

Alden

Handelsbanken Fonder

BlackRock Advisors

Robeco Institutional Asset Management

Storebrand Asset Management

Total for the 20 largest shareholders

Other shareholders

Total shares outstanding

Shares

Percentage

21 622 147

17 572 950

10 201 206

5 891 306

5 346 502

5 315 761

5 227 787

5 125 845

4 712 544

4 499 903

3 754 378

3 356 897

2 811 777

2 685 000

2 261 959

2 150 000

2 102 213

2 055 074

1 904 989

1 884 347

110 482 585

82 299 015

192 781 600

11.2%

9.1%

5.3%

3.1%

2.8%

2.8%

2.7%

2.7%

2.4%

2.3%

1.9%

1.7%

1.5%

1.4%

1.2%

1.1%

1.1%

1.1%

1.0%

1.0%

57.3%

42.7%

100.0%

The largest shareholders in Nordic Semiconductor ASA were as follows as of December 31, 2021 based on 
data provided by an investor relations advisory service provider*, and is obtained through an analysis of 
beneficial ownership and fund manager information provided in replies to disclosure of ownership notices 
issued to all custodians on the Nordic VPS share register.

60

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSShares held by the Board of Directors and Executive Management were as follows as of December 31, 2021:

Board of Directors

Birger Steen

Endre Holen

Jan Frykhammar

Anita Huun

Øyvind Birkenes

Inger Berg Ørstavik

Annastiina Hintsa

Jon Helge Nistad

Susheel Raj Nuguru

Morten Dammen

Joel Stapleton

Shares

192 643

153 484

22 854

11 854

9 196

3 854

2 854

0

0

0

0

Executive Management

Shares

Svenn-Tore Larsen

1 905 400

Geir Langeland

Ole Fredrik Morken

Ståle Ytterdal

Ebbe Rømcke

Pål Elstad

Svein-Egil Nielsen

Kjetil Holstad

Marianne Frydenlund

Katarina Finneng

187 700

180 000

126 000

69 900

18 846

17 000

6 604

2 500

600

Total

396 739

Total

2 514 550

*Every reasonable effort has been made to verify the data; however neither Nordic nor the investor relations advisory service 
provider, can guarantee the accuracy of the analysis.

61

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 18: Pensions

Defined benefit plan
The pension liability for the group consists of 
liabilities in Norway, Poland, India and The 
Philippines. Nordic has set up a pension plan for the 
Philippine office as of January 2014. The retirement 
plan is unfunded and of the defined benefit type 
which provides a retirement benefit calculated 
based on number of years of credited service. At the 
end of 2021 the pension liability was USD 290 367.

For the company in Finland pensions are financed 
by contributions from the insured employees 
and employers. The Norwegian company in the 
Group is required to have mandatory employment 
pension for employees in Norway, according to the 
Mandatory Employment Pension Act.

The defined benefit plan was closed for new 
members effective January 1, 2008 and from 
this point a new defined contribution plan was 
established. The two different types of pensions are 
described below:

Defined Pension Plan

Current service cost

Interest expense

Expected return on plan assets

Administration fee

Total pension expense excl. Social security tax

Social security tax

Total pension expense incl. Social security tax

Net pension obligation for the year was calculated as follows:

Pension obligations

Plan assets

Estimated net obligation

Social security tax

Total actual net obligation ink. Social security tax

2021

2020

—

17

-14

2

5

1

6

2021

1 195

964

231

33

263

—

19

-15

2

5

1

6

2020

1 174

961

213

30

243

Total pension liability for the Group

2021

2020

Employees in Norway

Employees in Philippines

Employees in the UK

Employees in Poland

Total

263

290

4

22

580

243

205

—

—

448

Defined contribution pension plan
All employees in Norway have a defined contribution pension plan from 01.01.2016. The main benefit is a 
contribution of 7% of salary up to 7.1 basis points (G) and 18% of salary between 7.1 and 12 basis points. Along 
with this the company has a disability pension of approximately 66% of salary including estimated social 
security based on 40 years of full employment. In 2021, the cost of the defined contribution pension was USD 
3 806 310, and the plan had 534 members.

62

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTS 
Note 19: Long-term incentive plans

On March 15, 2019, Nordic Semiconductor granted 
1,752,366 share options to 666 employees. The 
options were granted at a strike price of NOK 
39.44 (10% above volume weighted average share 
price the five days prior to the grant date). If the 
company’s share price exceeds a cap of NOK 
118.32, the company may settle the option grant by 
compensating the employee the difference between 
the cap and the strike price.

On May 3, 2019, Nordic Semiconductor granted 
196,644 share options and 55,814 performance 
shares to the management group. The options were 
granted at a strike price of NOK 45.1 (10% above 
volume weighted average share price the five days 
prior to the grant date If the company’s share 
price exceeds a cap of NOK 135.3, the company 
may settle the option grant by compensating the 
employee the difference between the cap and the 
strike price. The performance shares are issued 
conditional upon the achievement of a certain set of 
objectives. The performance shares vest and will be 
delivered at par value upon the completion of the 
performance period, which is three years.

On April 29, 2020, Nordic Semiconductor granted 
754,224 Restricted Stock Units (RSUs) and 
Performance shares to 775 employees. A share price 
of NOK 58.4 was used as basis for the calculation 
of RSUs and Performance Shares, which was the 
weighted average share price the five trading days 
after the Annual General Meeting. The RSUs vest 
after two and three years. The performance shares 
are issued conditional upon the achievement of a 
certain set of objectives. The performance shares 
vest and will be delivered at par value upon the 
completion of the performance period, which is 
three years.

On April 28, 2021, Nordic Semiconductor granted 
452,353 Restricted Stock Units (RSUs) and 
Performance shares to 1,087 employees. A share 
price of NOK 182.2 was used as basis for the 
calculation of RSUs and Performance Shares, which 
was the weighted average share price the five 
trading days after the Annual General Meeting. 
The RSUs vest after two and three years. The 
performance shares are issued conditional upon 
the achievement of a certain set of objectives. The 
performance shares vest and will be delivered at 
par value upon the completion of the performance 
period, which is three years.

A summary of share options transactions during 2021 and 2020 below:

2021

2020

Outstanding options 1.1

Granted

Forfeited

Exercised

Expired

Outstanding options 31.12

Of which exercisable

A summary of RSUs transactions during 2021 and 2020 below:

Outstanding RSUs 1.1

Granted

Forfeited

Exercised

Outstanding RSUs 31.12

A summary of performance shares during 2021 and 2020 below:

Outstanding performance shares 1.1

Granted

Forfeited

Exercised

Outstanding performance shares 31.12

2 548 589

5 470 374

—

—

28 992

53 976

1 974 394

2 850 587

—

17 222

545 203

2 548 589

— 954 923

2021

690 617

2020

—

423 383

696 017

55 053

5 400

—

—

1 058 947

690 617

2021

2020

114 020

55 813

28 970

58 207

—

—

—

—

142 990

114 020

The fair value of the options, RSUs and performance shares are set on the grant date and expensed over the 
vesting period. USD 4,287 thousand was expensed during 2021 and USD 3,123 thousand in 2020.

63

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSThe fair value per RSU and performance share 
without market condition granted in 2021 was NOK 
199.30. The fair value of the performance shares 
with Relative Total Shareholder Return performance 
condition granted in 2021 was NOK 305,7207. The 
valuation is based on a Monte Carlo simulation 
model with the following assumptions:

Volatility
It is assumed that historic volatility is an indication 
of future volatility. The expected volatility is 
therefore stipulated to be the same as the historic 
volatility, which equaled 47.88% on the date of 
grant in 2021 for the company and 37.73% for the 
SOX Index.

Share price on the grant date
The closing share price of the company and peer 
group companies (SOX Index) of NOK 199.30 and 
USD 3 178.49, respectively.

Risk-free interest rate
The risk-free interest rate is set equal to the relevant 
interest rate on government bonds on the date 
of grant in 2021, i.e. 0.62 % in Norway and 0.29% 
in the US.

Expected lifetime
Performance shares vest on the April 28, 2024. 
Performance end date is December 31, 2023, so 
as of vesting date the quantity to vest is known. 
Performance shares expire 3 years from grant date, 
i.e. 28th of April 2024.

Correlation coefficients
Correlation coefficient quantifies the degree to 
which the companies’ share prices jointly react to 
the news flow. The historic correlation coefficients 
has been calculated by using daily share price 
logarithmic returns of peer group. companies in 
local currency.

Note 20: Current liabilities

All figures in USD 1000

GROUP

2021

2020

28 392

22 812 Accounts payable

—

— Accounts payable from subsidiaries

17 427

4 976 Taxes payable

17 452

11 398 Employee benefit obligations

—

277 Board members benefit obligations

7 599

8 620

8 789 Social security tax and payroll tax

7 633 Holiday pay

20 530

16 184 Ship and debit rebate

10 757

8 515 End-customer rebate

1 011

567

362 Contractual severance payment

596 Legal claims

5 594

5 520 Current lease liabilities

520

302 Currency swap

5 197

4 446 Accrued expenses

79

60 Other current liabilities

123 747

91 872 Total Current liabilities

PARENT

2021

2020

27 558

21 059

25 596

17 268

17 181

4 889

10 312

6 417

—

6 266

5 548

277

7 791

5 019

20 530

16 184

10 757

8 515

—

567

3 921

520

—

596

3 616

302

2 879

2 928

68

46

131 703

94 908

64

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 21: Leases

All figures in USD 1000.

The Group is a lessee and has entered into 
agreements to lease office space, office equipment, 
machinery and vehicles.

The Group's office leases range between 1 to 6 
years, equipment and machinery range between 
1 to 5 years and vehicles are leased for less than 
3 years.

There are no leases with variable lease payments, 
other than lease payments linked to an consumer 
price index. Extension and termination options 
are included in a number of property and 
equipment leases across the Group. These are 
used to maximize operational flexibility in terms 
of managing the assets used in the Group’s 
operations. The majority of extension and 

termination options held are exercisable only by the 
Group and not by the respective lessor. Extension 
options have not been included in the lease liability, 
because the Group could replace the assets without 
significant cost or business disruption.

The Group also has certain leases of office buildings 
and office equipment and machinery with lease 
terms of 12 months or less and leases of office 
equipment and machinery and vehicles with low 
value. The Group applies the ‘short-term lease’ and 
‘lease of low-value assets’ recognition exemptions 
for these leases.

In 2021, there has not occurred any material 
rent concessions as a direct consequence of the 
Covid-19 pandemic.

Minimum lease payments payable on leases are 
presented in note 23.

Amounts recognized in the balance sheet:
The balance sheet shows the following amounts relating to leases:

GROUP

31.12.2021

31.12.2020 Right of use assets

18 786

24 730 Property

149

362 Office equipment and machinery

18 935

25 092 Total

GROUP

31.12.2021

31.12.2020 Lease liabilities

5 594

14 281

5 520 Current

21 003 Non-Current

19 876

26 523 Total

GROUP

2021

-80

—

2020

6 042 Additions and adjustments to the right-of-use assets

— Disposals to the right-of-use assets

PARENT

31.12.2021

31.12.2020

14 774

20 255

149

362

14 923

20 617

PARENT

31.12.2021

31.12.2020

3 921

11 673

15 594

PARENT

2021

-1 998

—

3 616

18 338

21 954

2020

2 197

—

In 2021, Nordic Semiconductor ASA signed an office rental agreement in Oslo with commencement date  of 1 
January, 2023. The existing Oslo office agreement will therefore end four years earlier, 31 December 2022. The 
total adjustment to the right-of-use asset is a reduction of USD 3m.

65

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSThe statement of profit or loss shows the following amounts relating to leases:

GROUP

PARENT

2021

5 662

213

5 875

822

214

543

7 454

7 265

2020 Depreciation of right-of-use assets

4 617 Properties

363 Office equipment and machinery

4 980 Total depreciation

844 Interest expense

339 Expenses relating to short-term leases

523 Expenses relating to leases of low-value assets

6 686 Total amount recognized in profit and loss

5 563 The total cash outflow for leases

2021

3 524

213

3 737

733

182

285

4 937

4 938

2020

3 514

363

3 877

768

169

296

5 110

4 358

Set out below are the carrying amounts of lease liabilities and the movements during the period:

GROUP

Cash flow information for lease liabilities

PARENT

26 523 Net liabilities as at 1 January 2021

-6 567 Cash flows from financing activities incl. foreign exchange adjustment

-80 Acquisitions and adjustments

— Disposals

19 876 Net liabilities as at 31 December 2021

21 953

-4 361

-1 998

—

15 594

66

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 22: Financial instruments

All figures in USD 1000.

Capital structure
Nordic Semiconductor's strategy relating to its 
capital structure is to maintain sufficient cash and 
cash equivalents to meet the Group’s requirements 
for ongoing operations and for new investments. 
Management believes that it is especially important 
to retain a strong credit rating and significant 
liquidity as the Group competes in a global market 
against larger companies.

Nordic Semiconductor manages its capital structure 
and makes revisions in light of changes in the 
overall economy and its operating assumptions. In 
order to maintain or amend the capital structure, 
Nordic may purchase its own shares on the market, 
pay dividends to shareholders, pay back capital to 
shareholders or issue new shares.

Nordic Semiconductor targets to have an equity 
ratio above 50% at all times, measured as total 
equity divided by total assets.

GROUP

2021

2020

458 209

402 492 Total equity

596 817

515 814 Total assets

77%

78% Equity share

Financial assets
The group holds the following financial assets at amortized cost:

GROUP

2021

2020 Amortized cost

141 748

88 034 Accounts receivable

3 601

4 170 Other current receivables

226 071

187 846 Cash at bank

371 421

280 050 Total financial assets at amortized cost

GROUP

2021

2020 Fair value through profit or loss

53 259

53 259

54 701 Money market fund

54 701 Total financial assets at fair value through profit or loss

Changes in financial assets at fair value through profit or loss:

GROUP

2021

54 701

—

337

2020

— As at 1 January 

51 809 Acquisition of financial instruments

87 Changes in fair value

-1 779

2 805 Currency translation differences

53 259

54 701 As at 31 December 

PARENT

2021

2020

440 690

389 266

584 620

502 960

75%

77%

PARENT

2021

2020

141 748

88 034

3 606

220 171

365 526

PARENT

2021

53 259

53 259

PARENT

2021

54 701

—

337

-1 779

53 259

2 322

183 914

274 271

2020

54 701

54 701

2020

—

51 809

87

2 805

54 701

67

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSFinancial liabilities
The group holds the following financial liabilities:

GROUP

2021

2020 Amortized cost

28 392

64 215

14 281

5 594

22 812 Accounts payable

49 472 Other current liabilities

21 004 Non-current lease liabilities

5 520 Current lease liabilities

PARENT

2021

27 558

76 258

11 673

3 921

2020

21 059

57 266

18 338

3 616

112 483

98 807 Total financial liabilities at amortized cost

119 410

100 279

GROUP

2021

520

520

2020 Fair value through profit or loss

302 Acquisition of financial instruments

302 Total financial liabilities through profit or loss

Changes in financial liabilities at fair value through profit or loss:

PARENT

2021

520

520

PARENT

2021

302

218

520

2020

302

302

2020

—

302

302

GROUP

2021

302

218

520

2020

— As at 1 January 

302 Changes in fair value

302 As at 31 December 

Interest-bearing loans and borrowings:
The Group has long-term revolving credit facilities 
("RCF"), which enables it to borrow up to USD 
40m and USD 25m at any time with an interest 
rate equal to LIBOR + margin. The line of credit 
agreement of USD 40m and USD 25m expires in 
November 2022. As of December 31, 2021, Nordic 
has not drawn on any of the credit lines. The 
security is provided by inventory, receivables and 
operating equipment with book values as follows; 
inventories USD 55m, accounts receivable USD 142m 
and operating equipment USD 29m.

The following financial covenants are included for 
the revolving credit facilities:

■	 Equity ratio shall not be lower than 40 %.

The remainder of the Group’s financing is made 
through short-term, non-interest bearing debt. This 
financing typically consists of debt to suppliers, the 
public sector, employees and others. Nordic has 
entered into a Tenancy Guarantee with Danske 
Bank as unconditional guarantor for NOK 41.4m for 
the office in Trondheim and SEK 0.4m for the office 
in Stockholm. The first warranty is given to secure 
payments of up to 24 months of rent for the office 
in Trondheim.

Fair value measurement
The financial instruments that are carried at fair 
value are revalued on a recurring basis. The 
financial instruments are not designated at fair 
value through profit or loss on initial recognition.

In 2021, the Group has investments in these financial 
assets and liabilities using the following methods 
and assumptions:

■	 Money market fund is defined as cash equivalents 
because the asset is liquid and not subject to 
material fluctuations in value. The asset is measured 
at quoted market price in an active market at the 
balance sheet date.

■	 Currency swap represents the present value of 

the future contractual cash flows. The fixed side 
is specified in the swap agreement as the agreed 
currency rate and the floating side is the observable 
spot exchange rates.

68

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSNote 23: Financial risk management

All figures in USD 1000.

The Group's finance department is responsible for 
carrying out the policies and guidelines for financial 
risk management approved by the Board.

The Group is mainly exposed to counterparty credit 
risk, liquidity risk, and market risk (including interest 
rate risk and foreign currency risk). 

Credit risk
Credit risk is the risk that a counterparty will not 
meet its obligations under a financial instrument or 
customer contract, leading to a financial loss. The 
Group is exposed to credit risk from its operating 
activities (primarily accounts receivables) and from 
its financing activities, including foreign exchange 
transactions, cash and cash equivalents with 
banks and other financial institutions and other 
financial instruments.

The Group’s sale of components takes place 
through its distribution partners within defined 
geographic regions, where Asia is the dominant 
region. The Group depends on a relatively small 
number of customers. Customer credit risk is 
managed by each region subject to the Group’s 
established policy, procedures and control relating 
to customer credit risk management. Credit quality 
of a customer is assessed based on an extensive 
credit evaluation and individual credit limits are 
defined in accordance with this assessment. 
Outstanding accounts receivables are regularly 
monitored and assurance from distributors that end 
customer sales is secured through letter of credits 
is obtained.

The Group make an allowances for expected credit 
losses on receivables based on a provision matrix 
that is initially based on the historical observed 
default rates. The Group has calibrated the matrix 
to adjust the historical credit loss experience with 
forward-looking information.

Age distribution of customer receivables was:

GROUP

2021

2020 Gross total

112 399

29 327

68

190

74 901 Not due

12 632 Past due 0-30 days

125 Past due 31-120 days

376 Over 120 days

141 984

88 034 Total

PARENT

2021

112 399

29 327

68

190

2020

74 901

12 632

125

376

141 984

88 034

Historically there has not been any significant credit losses. 79 percent of trade receivables were within 
terms at the balance sheet date. On that basis, expected credit loss for trade receivables are limited and 
allowances for doubtful accounts at 31 December 2021 was 0.2m equal customer receivable overdue more 
than 120 days.

The Group has a limited number of customers, regular contact and long-term relationships with most of its 
customer base. Some of the customers are dependent on Nordic Semiconductor to stay in business.

Financial assets at fair value through profit or loss
The Group is also exposed to credit risk in relation to debt investments that are measured at fair value 
through profit and loss.

The maximum exposure to credit risk on the balance sheet date was:

GROUP

2021

2020

141 984

88 034 Accounts receivable

11 951

9 372 Other current receivables

153 935

97 406 Total

PARENT

2021

2020

141 984

88 034

11 283

10 062

153 267

98 096

69

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSLiquidity risk
Liquidity risk is the risk that the Group will encounter 
difficulty in meeting financial obligations when due 
and to close out market positions.

As of 31 December 2021, cash and cash equivalents 
amounted to USD 279.3m (USD 242.5m), see note 16 
for details. The total balance includes money market 
fund at fair value USD 53.3m.

Overall, we monitor cash flows at both Group 
and entity level. The Group seeks to minimize risk 
when investing its cash balances and. Investments 
can only be made in securities which have been 
approved by the Board.

The Group has no externally imposed capital 
requirements or agreements, and has no contracts 
or legal requirements which are not being upheld. 
The Group has the following due dates with regard 
to contracts for financial liabilities as of December 
31, 2021:

GROUP

Accounts payable

Currency swap

Other current liabilities

Lease liabilities *)

Total

PARENT

Accounts payable

Accounts payable subsidiaries

Currency swap

Other current liabilities

Lease liabilities *)

Total

Carrying 
amount

Contractual 
cash flow

Less than 
one year

One to five 
years

More than 
five years

28 392

28 392

28 392

520

89 241

19 876

520

89 241

22 366

520

89 241

5 910

138 028

140 518

124 063

—

—

—

13 868

13 868

—

—

—

2 588

2 588

Carrying 
amount

Contractual 
cash flow

Less than 
one year

One to five 
years

More than 
five years

27 558

25 596

520

74 109

15 594

27 558

25 596

520

74 109

17 949

27 558

25 596

520

74 109

4 209

143 376

145 732

131 991

—

—

—

—

11 153

11 153

—

—

—

—

2 588

2 588

*Lease liabilities is mainly office facility rent in Oslo and Trondheim, lease ending respectively 31 December 2022 and 31 
December 2027

70

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSInterest rate risk
The Group’s liquidity requirements and risk 
assessment determine its investment strategy and 
interest rate exposure.

Foreign exchange risk arises from future commercial 
transactions and recognized assets and liabilities 
denominated in a currency that is not the functional 
currency of the relevant group entity.

The Group’s policy is to maintain a short-term 
investment horizon for its surplus cash. The 
investment portfolio should not have an average 
duration longer than six (6) months.

The Group has long-term revolving credit facilities, 
which allows it to borrow up to a total of USD 65m 
at an interest rate of LIBOR + margin. The line of 
credit agreement of USD 40m and USD 25m expires 
end of November 2022.

If interest rates increase 1 basis point, the negative 
effect on profit before tax given current utilization 
of the RCF is USD 0 per year as the credit facility is 
not utilized.

Foreign currency risk
The Group is subject to foreign currency risk as 
it operates internationally with development and 
commercial activities.

The dominated functional currency for the Group 
is USD. Nearly all revenues and cost of goods are 
in USD, but approximately 45% and 25% of the 
Group’s operating expenses (excluding depreciation 
and amortization) and tax cash flows are 
denominated in NOK and EUR. The Group does not 
use hedging instruments to minimize its exposure 
to foreign currency risk from operating activities 
affecting profit and loss.

Below is a sensitivity analysis of changes in the NOK 
exchange rate on Group balance sheet items, and 
their impact on profit and loss:

Profit before tax

NOK exchange rate +/- 10%

+/-4 657

The tables below show the exposure in sales to foreign currency risk in the most significant currencies:

GROUP

2021

2020

Local currency  
(1,000)

USD  
(1,000)

Share of total 
revenue in %

Local currency  
(1,000)

USD  
(1,000)

Share of total 
revenue in %

USD

EUR

Other

Total

610 283

610 283

100.0%

404 011

404 011

175

314

208

37

—%

—%

1 061

—

1 206

—

99.7%

0.3%

—%

610 528

100.0%

405 217

100.0%

PARENT

2021

2020

Local currency  
(1,000)

USD  
(1,000)

Share of total 
revenue in %

Local currency  
(1,000)

USD  
(1,000)

Share of total 
revenue in %

USD

EUR

Other

Total

610 528

610 528

99.8%

404 217

404 217

538

5 163

636

411

0.1%

0.1%

1 605

—

1 830

194

99.5%

0.5%

—%

611 577

100.0%

406 241

100.0%

The Group uses derivative financial instruments to reduce its exposure to currency exchange rate 
movements and hold currency swap in relation to fixed income fund investments. Derivatives are not held for 
speculative purposes.

All derivative financial instruments are recognized as assets and liabilities measured at fair value, and all 
fair value gains and losses are recognized in profit or loss. Where the fair value of a derivative on initial 
recognition differs from the transaction price, if any, the difference is recognized immediately in profit or loss 
only if the fair value is evidenced by a quoted price in an active market or is based on a valuation technique 
that uses only data from observable markets.

71

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSThe tables below show the exposure at the end of reporting period in the most significant currencies: 
All amounts stated in USD 1000.

GROUP

USD

EUR

NOK

Other

Total

PARENT

USD

EUR

NOK

Other

Total

2021

2020

Accounts receivable Accounts payables

141 971

—

—

—

141 971

25 140

1 024

1 854

374

28 392

Accounts 
receivable

87 731

300

—

—

88 031

Accounts payables

19 898

2 007

480

427

22 812

2021

2020

Accounts receivable Accounts payables

141 971

—

—

—

141 971

25 140

461

1 854

103

27 558

Accounts 
receivable

Accounts payables

87 731

19 898

300

—

—

351

480

330

88 031

21 059

72

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSDetermination of fair value
As of December 31, 2021 the Group had no financial assets or financial liabilities where there is considered to 
be a difference between book value and fair value.

Below is an overview of Nordic’s financial instruments:

GROUP

2021

2020

Book value

Fair market value

Book value

Fair market value

Financial assets

Accounts receivable

Short-term receivables

Cash and cash equivalents

incl. money market fund

Financial liabilities

Accounts payable

Current financial liabilities

Other current liabilities

141 748

11 951

279 330

53 259

28 392

520

64 215

141 748

11 951

279 330

53 259

28 392

302

64 215

88 034

9 372

242 547

54 701

22 812

302

49 472

88 034

9 372

242 547

54 701

22 812

302

49 472

PARENT

2021

2020

Book value

Fair market value

Book value

Fair market value

Financial assets

Accounts receivable

Short-term receivables

Cash and cash equivalents

incl. money market fund

Financial liabilities

Accounts payable

Current financial liabilities

Other current liabilities

141 748

11 283

273 430

53 259

27 558

520

76 258

141 748

11 283

273 430

53 259

27 558

302

76 258

88 034

10 062

228 024

54 701

21 059

302

57 265

88 034

10 062

228 024

54 701

21 059

302

57 265

Book value is a reasonable estimate of fair value in cases where these numbers are identical.

Note 24: Events after the balance sheet date 

Note 25: Related party transactions

There are no events after the balance sheet date 
with materially affect on the financial statements.

Nordic Semiconductor ASA, the ultimate parent 
company of the Group, is listed on Oslo Stock 
Exchange. The Group has no material transactions 
with related parties.

The ultimate parent company has transactions 
with its wholly-owned subsidiaries, see Note 15: 
Intercompany for further information.

73

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | FINANCIAL STATEMENTSDECKLARATION TO THE ANNUAL REPORT

Responsibility Statement
The Chief Executive Officer and the Board of Directors confirm, to the best of our knowledge, that the 
financial statements for 2021 have been prepared in accordance with current accounting standards and give 
a true and fair view of the Parent company and the Group’s assets, liabilities, financial position and results of 
the operations. 

Oslo, March 17, 2022

Jan Frykhammar

Board member

Birger Steen

Chair

Anita Huun

Board member

Inger Berg Ørstavik

Svenn-Tore Larsen

Board member

Chief Executive Officer

Endre Holen

Board member

Øyvind Birkenes

Board member

Jon Helge Nistad

Annastiina Hintsa

Board member, employee

Board member

Joel Stapleton

Susheel Raj Nuguru

Morten Dammen

Board member, employee

Board member, employee

Board member, employee

75

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | DECLARATION OF ANNUAL REPORTNORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | STANDARDS OF CORPORATE GOVERNANCE

Standards of 
corporate governance

The Board of Directors ("Board") and Management of Nordic Semiconductor 
ASA ("Nordic" or the "Company") aim to execute their respective tasks in 
accordance with the highest standards for corporate governance to drive 
long-term value creation and promote sustainable business conduct.

Nordic Semiconductor is subject to corporate 
governance requirements according to the 
Norwegian Public Limited Companies Act, the 
Norwegian Accounting Act, section 3-3b, the 
Oslo Stock Exchange's Oslo Rulebook II - Issuers 
Rules, Chapter 4.5, section 5-8a of the Norwegian 
Securities Act, and the Norwegian Code of 
Practice for Corporate Governance ("the Code of 
Practice") as adopted by the Norwegian Corporate 
Governance Board (NUES). 

This statement follows the system used in the 
Code of Practice. The information requirements 
that follows from the Norwegian Public Limited 
Companies Act and Norwegian Accounting 
Act are integrated into the statement below 
where appropriate. 

Implementation of and reporting on 
corporate governance
Nordic Semiconductor’s standards for corporate 
governance provide a critical foundation for the 
company’s management. These standards must be 
viewed in conjunction with the company’s efforts 
to constantly promote a sound corporate culture 
throughout the organization. The company’s core 
values of engagement, contribution, knowledge, 
respect and responsibility are central to the Board’s 
and management’s efforts to build confidence in 
the company, both internally and externally. Nordic 
Semiconductor is a UN Global Compact signatory 
and is committed to the Ten Principles as set forth in 
the areas of Human Rights, Labor, Environment and 
Anti- corruption. Nordic Semiconductor has adopted 
the Responsible Business Alliance (RBA) Code 
of Conduct, which specifically focuses on topics 
relevant for the electronics industry, and promotes 
this to ensure sustainable business operations and 
supply chain.

Additional information on this work can be 
read in the dedicated sections on specific 
Environmental, Social, and Governance matters 
in this report, as well as  published on Nordic 
Semiconductor’s website.

Deviations from the Code of Practice: None

Business
Nordic designs, sells and delivers integrated circuits 
and related products and services for use in short 
and long- range wireless applications. The company 
specializes in ultra-low power components, based 
on its proprietary 2.4 GHz RF, various Bluetooth 
related standards and emerging standards for 
cellular IoT communications like NB-IoT and 
LTE-M. All manufacturing and direct distribution 
of components are outsourced to specialist 
subcontractors. The company is headquartered in 
Trondheim, Norway, and has offices in USA, China, 
Korea, India, Sweden, UK, Japan, Taiwan, Poland, 
Finland, Germany and the Philippines.

The scope of Nordic's business is defined in 
section 2 of its Articles of Association: “The 
objective for which the company is established 
is the development and sale of electronic 
components, integrated circuits, design tools and 
related solutions.”

The Board sets clear objectives for the business with 
a view to create long-term value for shareholders. 
The Board leads the company’s strategic planning 
and make decisions that form a basis for the 
company’s executive management to prepare 
and carry out investments to drive future growth 
in a sustainable manner. The objectives include 
matters that relate to environmental impact, social 
matters such as human and labor rights, equal 
treatment and prevention of discrimination, as well 
as the prevention of corruption. Strategic plans 
are evaluated on an ongoing basis, with a Board 
strategy review being conducted annually in an off-
site multi-day meeting. New and updated long-term 
objectives, strategies and risk profiles are revised 
and agreed on towards the end of the year, or in 
connection with major events.

More details on Nordic's objectives, strategies and 
risk profiles are presented in the Report of the 
Board of Directors. More information about Nordic's 
objectives and efforts related to Environmental, 
Social and Governance matters are presented in the 
dedicated section of this report. 

Deviations from the Code of Practice: None

76

Equity and dividends
The Board of Directors ensures that the company 
has a capital structure that is appropriate to the 
Company’s objectives, strategy and risk profile. 
The Company’s growth philosophy, as well as the 
cyclicality of its business, means that the Company 
will aim to maintain a high equity ratio and 
considerable liquidity. The Company aims primarily 
to provide shareholders with returns in the form of 
appreciation of the shares and has a long-term goal 
to pay dividends based on surplus cash generated 
by the company, while taking longer term growth 
targets into consideration. Nordic assesses its cash 
position to be adequate given the expected level of 
R&D and capex investments and believes a strong 
balance sheet is required to ensure flexibility and 
resilience. Cash generation is however expected 
to increase over the coming years and will allow 
for the evaluation of cash return to shareholders 
in 2023. The company’s dividend policy is reviewed 
each year by the Board of Directors. The Annual 
General Meeting can mandate the Board the 
authorization to pay dividends based on the latest 
approved Annual Report. The justification for this 
authorization needs to be explained and should 
reflect the Company’s dividend policy.

The Board of Directors, in accordance with the 
resolution of the Annual General Meeting held 
April 20, 2021 has been authorized to buy back 
up to 19,200,000 own shares for a total par value 
of NOK 192,000.00 in one or more transactions. 
The authorization is limited to 10 percent of the 
Company’s share capital, and the price per share 
which the Company may pay for shares acquired 
in this manner shall not be less than the par value 
nor greater than NOK 300. This power of attorney 
will remain in effect until the company’s ordinary 
Annual General Meeting in 2022. The Board 
believes that it is expedient for the Board to be 
authorized to purchase own shares, partly to fulfil 
the remuneration schemes for employees, and partly 
so that shares can be used as a consideration in 
connection with the acquisition of businesses or for 
subsequent sale or cancellation. Such authorization 
must be decided by the General Meeting and will 
apply until 30 June the following year.

In accordance with the decision passed at the 
general meeting held April 20, 2021, the Board 
of Directors has the authority to increase the 
company’s share capital by issuing up to 19,200,000 
shares with a total par value of NOK 192,000. The 
authority is to be used for purposes defined in the 
Notice of the Annual General Meeting, including 
strengthening the Company’s shareholder’s equity, 
to execute share capital increases with one or 
more strategic partners, or to complete a merger 
or acquisition using shares or cash. This power of 

attorney will remain in effect until the Company’s 
Annual General Meeting in 2022, and can be 
implemented through a private placement, rights 
issue or public offering.

Nordic Semiconductor has one class of shares, 
where each share has one vote at the Company’s 
shareholders’ meeting. Nordic Semiconductor strictly 
adheres to the principle of equal treatment of all 
shareholders. The Company’s transactions in its 
own shares are conducted in accordance with good 
stock exchange practice in Norway.

If the Board wishes to quickly raise capital, the 
Board has been authorized to direct a share 
capital increase to selected investors chosen 
by the Board, up to the limits quantified above. 
In this event, the Company will notify the stock 
exchange of its reasons for implementing a 
directed share placement. Existing shareholders’ 
preemptive subscription rights under §10-4 in the 
Norwegian Companies Act can be waived under 
these circumstances.

Such capital increases shall be executed at or near 
the current stock price listed on the Oslo Stock 
Exchange. This authorization remains valid until 
the Company’s ordinary annual general meeting in 
2022.

Deviations from the Code of Practice: None.

Equal treatment of shareholders and 
transactions with close associates
The Company is generally cautious in regard to 
transactions with shareholders, members of the 
Board of Directors, senior employees or related 
parties to the above. To ensure that the best code 
of conduct applies, the Board requires notification 
and review of any process or transaction in 
which both the company and a senior employee 
or member of the Board of Directors may have 
interests. Nordic Semiconductor will seek to comply 
with the principles of equal treatment of related 
parties and possible transactions with related 
parties that are laid down in the Code of Practice.

The Company considers Shareholders’ preemption 
rights in connection with an increase in share 
capital to be an important and fundamental right 
in a healthy shareholder community, and the 
preemption right can only be waived in exceptional 
circumstances. Waiving of this right will be based on 
the Company’s and shareholders’ mutual interests. 
In such case, there will be full transparency about 
the matter, and the shareholders will receive 
identical information simultaneously through a stock 
exchange announcement and subsequently on the 
Company's website.

77

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | STANDARDS OF CORPORATE GOVERNANCEThis also applies if the Board utilizes the 
authorizations it has been granted.

The Company’s transactions in own shares must 
always comply with the arm’s length principle and 
be on ordinary market terms.

Contact between the Board of Directors and 
the investors is normally conducted via company 
management. Under special circumstances the 
board, represented by the chairperson may conduct 
dialogue directly with investors.

Deviations from the Code of Practice: None.

Freely negotiable shares
Nordic  Semiconductor’s  shares  are  freely  tradable 
and there are no restrictions on the sale and purchase 
of  the  Company’s  shares  beyond  those  pursuant  to 
Norwegian law.

Each share carries one vote.

Deviations from the Code of Practice: None.

General Meeting
The Annual General Meeting is the company’s 
highest body and the shareholders exert their 
authority in the company through the Annual 
General Meeting. Nordic Semiconductor and 
the Board encourages all shareholders to 
participate and exercise their rights at the Annual 
General Meeting.

The Board of Directors should ensure that the 
Annual General Meeting is held in accordance 
with the Code of Practice ensuring all shareholders 
the ability to participate. The notice of the Annual 
General Meeting, including relevant information 
shall be announced and distributed at least 21 days 
in advance of the Annual General Meeting, and 
the final date for notification of attendance is one 
working day prior to the Annual General Meeting. 
The Board of Directors should further ensure that:

■  The resolutions and supporting information 

distributed are sufficiently detailed, comprehensive 
and specific to allow shareholders to form a view on 
all matters to be considered at the meeting

■  Any deadline for shareholders to give notice of their 
intention to attend the meeting is set as close to the 
date of the meeting as possible

■  The Chair of the Board of Directors and the Chair 
of the Nomination Committee are present at the 
general meeting. In addition, the Chair of the Audit 
Committee and the Compensation Committee 
should attend the meeting

■  The general meeting is able to elect an independent 
Chair for the general meeting. In 2020 and in 2021 
the Annual General Meeting was held as a video 
conference and all shareholders were given the 
opportunity to both view, vote and participate 
in the meeting.

Shareholders should be able to vote on each 
individual matter, including on each individual 
candidate nominated for election. Shareholders 
who cannot attend the meeting in person should be 
given the opportunity to vote. The Company should 
design the form for the appointment of a proxy to 
make voting on each individual matter possible and 
should nominate a person who can act as a proxy 
for shareholders.

Deviations from the Code of Practice: Nordic has 
one deviation related to participation in the General 
Meeting. The entire Board of Directors has normally 
not participated in the general meeting. Matters 
under consideration at the general meeting of 
shareholders have not previously required this. The 
chair of the Board of Directors is always on hand to 
present the report and answer any questions. Other 
board members participate as needed. The Board of 
Directors considers this to be adequate.

Nomination Committee
Nordic Semiconductor has a Nomination Committee, 
as provided for in its Articles of Association. The 
Annual General Meeting stipulate guidelines 
for the duties of the nomination committee, 
elect the chair and members, and stipulates the 
committee´s remuneration.

The Nomination Committee’s duties are to represent 
the interests of the shareholders in general, and 
to propose qualified candidates for the Annual 
General Meeting’s election of the Board of Directors 
as well as to propose the remuneration to the Board 
of Directors.

The Nomination Committee should justify why it is 
proposing each candidate in the notice for the AGM 
separately, including information on the candidates’ 
competence, capacity and independence.

The nomination committee holds regular meetings 
with major shareholders as well as management 
and individual shareholder elected Board members. 
In addition, all shareholders can submit suggestions 
to the nomination committee through a link on 
Nordic’s webpage.

The Nomination Committee consists of three 
members who are shareholders or who represent 
the shareholders. The Company’s executive 
personnel are not represented on the Nomination 
Committee. The deadline for submitting proposals 
to the Nomination Committee is one month before 
the Annual General Meeting.

78

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | STANDARDS OF CORPORATE GOVERNANCEThe nomination committee has during 2021 held 
25 meetings. 

The members of the Nomination Committee are:

■ 

John Harald Henriksen (Chair)

■  Viggo Leisner

■  Eivind Lotsberg

Deviations from the Code of Practice: None.

The Board of Directors: composition and 
independence 
In accordance with the Norwegian Public 
Companies Act the Board of Directors has the 
overriding responsibility for the management of the 
company. The Board's role and responsibility is also 
to supervise the company's day-to-day management 
and the company's activities in general. The 
responsibility for the day-to-day management has 
been delegated to the CEO as set out in the Rules 
of Procedure for the Board of Directors of Nordic 
Semiconductor ASA. 

Norwegian companies can be governed by either a 
one-tier or a two-tier board structure, consisting of 
a board of directors and, in a two-tier structure, a 
corporate assembly.

Any company with more than 200 employees 
is generally required to have a corporate 
assembly, with two-thirds of the members elected 
by shareholders and one-third elected by the 
company's employees. If a company agrees with 
its employees not to have a corporate assembly, 
employees have the right to appoint additional 
representatives to the board of directors. The 
company has agreed with its employees to not have 
a corporate assembly and thereby increased the 
numbers of employees elected Board members. 

The Board of Directors and the Chair of the Board 
of Directors are elected by the shareholders at the 
Annual General Meeting on the basis of proposals 
from the Nomination Committee.

The shareholder-elected Board members are 
elected, in accordance with the Articles of 
Association, for one year at a time. The employee 
representatives are elected for two years at a time.

The composition of the Board of Directors 
should ensure that the Board can attend to the 
common interests of all shareholders and meets 
the company’s need for expertise, capacity and 
diversity. Attention should be paid to ensuring 
that the Board can function effectively as a 
collegiate body.

The composition of the Board of Directors should 
ensure that it can operate independently of any 
special interests. The majority of the shareholder-
elected members of the Board should be 
independent of the Company’s executive personnel 
and material business contacts. 

The Code of Practice recommends that a majority 
of shareholder-elected directors are independent of 
the Company and its executive management and 
that no members of executive management serve 
as directors.

Furthermore, the Norwegian Public Companies Act 
prohibits the CEO from serving as chair and requires 
that public companies have boards of directors 
consisting of at least 40% women.  This requirement 
is related to shareholder elected board members, 
and employee elected board members should not 
be included in this requirement. 

In 2021, the Board, as elected in accordance 
with above mentioned principles by the General 
Assembly, consisted of 7 shareholder elected Board 
Members and 3 employee elected Board Members.

No executive personnel or representatives of 
business associates are members of the Board. 
At least 40% of the shareholder elected Board 
Members are female (in 2021 three out of 
seven or 43%).

Members of the Board are encouraged to hold 
shares in the company.

A more detailed description of the background, 
qualifications, and term of service of each member 
of the Board of Directors and the number of Nordic 
Semiconductor shares they own are provided in the 
Board of Directors section in this annual report and 
on the Company’s webpage.

Deviations from the Code of Practice: None.

The work of the Board of Directors
The Board has established Rules of Procedures to 
govern its work in relation to Nordic Semiconductor 
ASA. In accordance with the said procedures, the 
Board shall ensure that the company's activities are 
soundly organized, and shall adopt sufficient plans 
and budgets of the company.  The Board shall be 
kept informed of all circumstances necessary for 
the Board to perform its duties. The Board shall 
keep itself informed of the company's financial 
position and has a duty to ensure that its activities, 
accounts and asset management are subject to 
adequate control.

79

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | DECLARATION OF ANNUAL REPORTIn accordance with its Rules of Procedure, neither 
a Board member nor the company CEO may 
participate in Board discussions or decisions of 
matters that are of such special importance to him 
or her, or to any connected person of said board 
member or CEO, that the member must be deemed 
to have a special or prominent personal or financial 
interest in the matter. 

Each year, the Board of Directors adopts a specific 
meeting and activity plan for the following year. This 
plan covers strategic planning, monitoring of the 
material business development including, but not 
limited to, environmental, social and governance. 
The Board’s activity plan for 2022 stipulates eight 
meetings, two of which are scheduled as all day or 
multi-day meetings to discuss and explore strategy 
and technology-specific issues.

During 2021, the Board held 8 ordinary Board 
Meetings and 4 extraordinary meetings. As a result 
of the pandemic, all meetings except one were 
conducted online. All Board Members attended 
all meetings.

The Board of Directors carries out an evaluation 
of its activities each year and on this basis 
discusses improvements in the organization and 
implementation of its work.

The Board has established two board committees 
comprising Board members – the People and 
Compensation Committee and the Audit Committee. 
The committees’ mandates are based on a group 
perspective. The board committees do not have 
decision-making power but are charged with 
making proper preparations for board meetings in 
the matters with which they are concerned. In the 
Board's experience, the work of board committees 
makes the overall Board more effective and efficient 
and allows for deeper and stronger involvement in 
the business’s challenges and initiatives.

People and Compensation Committee
The Board has established a People and 
Compensation Committee to recommend and 
evaluate remuneration principles and execution 
for the CEO, to guide and evaluate principles 
and strategy for the compensation of executive 
management and to evaluate and oversee the 
overall compensation strategy for the company. The 
committee consists of three members and have had 
5 meetings in 2021.

The People and Compensation committee consist of 
the following Board Members:

■  Endre Holen (Chair)

■  Birger K. Steen

■  Morten Dammen

Morten Dammen joined the committee late 2021, 
when Jon Helge Nistad stepped down. Dammen 
participated in 1 meeting in 2021, Nistad participated 
in 4 meetings. The members of the People and 
Compensation Committee are selected to ensure 
that the compensation programs are fair and 
appropriate, but also reflect the challenges related 
to attracting and retaining key talent in a global 
technology market for engineers. Therefore, the 
committee both consists of an employee elected 
Board Member and two shareholder elected Board 
Members with extensive experience from the global 
technology space.

All members participated in all meetings.

Audit Committee
The Audit Committee consists of three members 
of the Board. The Committee collectively has 
the competence required in the Public Limited 
Liability Companies Act § 6-42. All members of 
the Audit Committee are independent to the 
company according to § 6-42 Public Limited Liability 
Companies Act, and at least one member has the 
required qualifications within accounting or auditing. 
The Committee supports the Board with respect 
to the assessment and control of financial risk, 
financial reporting, internal control, and prepares 
discussions and resolutions for Board meetings. In 
addition, the committee oversees 

qualifications, independence and performance of 
the external auditor. The head of group compliance 
meets regularly with the Audit Committee.

The Audit Committee held 8 meetings in 2021 and 
has been in regular contact with the Company’s 
auditor regarding audits of the statutory accounts 
and it also assesses and monitors the auditor’s 
independence, including non-audit services provided 
by the auditor.

The Audit Committee consists of the following 
Board Members:

■ 

■ 

Jan Frykhammar (Chair)

Inger Berg Ørstavik

■  Anita Huun

The members of the of the Audit Committee have 
extensive experience to be able to properly oversee 
the Company's accounting, financial reporting, and 
internal and external audits; and general adherence 
to principles of good corporate governance.

One of the members has extensive experience 
from the CFO role in a global technology company, 
one member has experience from both investment 
banking and the CFO role and the final member 
has experience as a professor in law.

80

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | DECLARATION OF ANNUAL REPORTAccording to the Norwegian Accounting Act the 
Audit Committee reviews and approves all non-
audit fees paid to the companies elected auditor.

The elected auditors independence is evaluated 
annually. Auditor partner and company rotations is 
done when considered appropriate. In 2019 a full 
tender for audit services was conducted and elected 
auditor EY was replaced by PwC. 

All members participated in all meetings.

Deviations from the Code of Practice: None.
Risk Management and internal control
The Board and Management are committed to 
ensure long-term value for its shareholders by 
maintaining sound and effective internal controls 
and frameworks for risk management that are 
appropriate in relation to the extent and nature of 
the company's activities.  

The Board of Directors oversee the risk 
management process and carries out biannual 
reviews of the most important areas of exposure 
and internal controls. Risks are also considered 
by the Board in relation to the assessment 
of specific projects and ongoing business. 
For more information with regard to the 
development of specific risks and how Nordic 
Semiconductor ASA responds to such risks, see 
section Risk Management under Report from the 
Board of Directors. 

The Company’s primary internal control routines 
related to financial reporting are as follows: The 
finance team prepares a monthly financial report 
which is distributed to and reviewed by CEO and 
the Board of Directors. In preparing the monthly 
financial report, the accounting team conducts 
reconciliations of all major balance sheet items, 
which are independently reviewed by a second 
member of the team. Balance sheet items subject 
to accounting estimates are regularly analyzed 
to ensure that all assumptions relating to the 
accounting estimate remain valid. As part of the 
monthly financial report, the financial results are 
compared with the company’s budget and prior 
forecast to analyze variances and ensure that they 
are not the result of incorrect reporting.

The quarterly and annual financial reports are 
subject to review and approval by the Board. In 
addition, the Board of Directors performs annual 
review of the company’s business strategy focusing 
on market development, technology updates, 
competitive positioning and risk factors. In addition, 
the Board reviews various aspects of the company’s 
business throughout the year, including performing 
a half yearly detailed risk review.

The Board presents an in-depth description and 
analysis of the company’s financial status in the 
report of the Board of Directors in the company’s 
annual report. The report also describes the 
main drivers and risks related to the operation of 
the business.

Deviations from the Code of Practice: None.

Remuneration to the Board of Directors
Remuneration to the Board of Directors is decided 
by the Annual General Meeting based in the 
Nomination Committees recommendation. All 
remuneration to the Board of Directors is disclosed 
in Note 10 of the Nordic Semiconductor Group 
annual accounts. The remuneration to Board 
members is not performance based or linked to the 
company’s performance, and the company does not 
provide share options to Board members. Members 
of the Board of Directors receives remuneration for 
work related to Board committees.

Deviations from the Code of Practice: None.

Remuneration to the Executive 
Management
Board of Directors discusses and approves the 
terms and conditions for the CEO once a year 
and reviews and monitors the general terms and 
conditions for other senior employees of the group.

The main principle in the Company’s policy for 
remuneration and compensation is that the 
leading employees shall be offered competitive 
terms, so as to ensure the Company continues 
to attract and retain the desired and necessary 
talent. Compensation for executive management 
is established in accordance with the above-
mentioned main principle.

The Company has established an annual 
performance bonus for the executive management 
team, for which the employee must remain within 
her position until the start of the following year to 
be eligible. The bonuses are awarded through a 
direct cash payment and, when appropriate, long-
term incentives in the form of restricted shares and/
or stock options. Performance- based compensation 
is subject to absolute payout limits and fulfillment of 
performance criteria, both decided by the Board at 
its discretion.

The remuneration policy was approved by the 
shareholders at the Annual General Meeting in 
2021. A revised policy will be presented for a binding 
vote at the Annual General Meeting in 2022.

The approved policy will be available on Nordic’s 
website. A new management remuneration report 
for 2021 will be published on Nordic's website and 
presented to the Annual General Meeting in 2022 
for an advisory vote.

Deviations from the Code of Practice: None.

81

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | DECLARATION OF ANNUAL REPORTInformation and Communications
The Board of Directors has established a 
communications strategy for the company’s 
reporting of financial and other information 
based on openness and taking into account the 
requirement for equal treatment of all participants 
in the securities market. The strategy has been 
published on the Company’s investor relations web 
pages (www.nordicsemi.com/About-us/Investor-
Relations).

Nordic Semiconductor aims to communicate actively, 
openly and in a timely fashion with the financial 
market. The Company's accounting procedures 
are highly transparent and its financial statements 
are prepared and presented in accordance with 
the International Financial Reporting Standards 
(IFRS). The Board of Directors monitors the 
company’s reporting.

Nordic Semiconductor’s financial reporting calendar 
for 2021 has been announced to the Oslo Stock 
Exchange and can be found on the company’s 
website. The company’s annual and quarterly 
reports contain extensive information about the 
various aspects of the company’s activities. The 
Company’s quarterly presentations are transmitted 
directly on the internet and may be found on 
Nordic Semiconductor’s investor relations webpages 
together with the quarterly and annual reports and 
a comprehensive and detailed presentation of other 
information, reports and documents.

Nordic Semiconductor’s Chief Financial Officer 
is responsible for contact with shareholders 
outside of the General Meeting. In addition the 
Investor Relations Director has extensive contact 
with shareholders. The Chief Financial Officer 
and Investor Relations Director reports regularly 
to the Board about the Company’s investor 
relations activities.

Deviations from the Code of Practice: None.

Take-overs
The Board of Directors have established guiding 
principles for how it will act in the event of a 
takeover bid.

The Board of Directors will not seek to hinder 
or obstruct any takeover bid for the Company’s 
activities or shares. In the event of a takeover 
bid, as discussed in item 14 of the Norwegian 
Code of Practice for Corporate Governance, the 
Board of Directors will seek to comply with the 
recommendations therein as well as complying with 
relevant legislation and regulations.

If the Company is acquired, the CEO’s resignation 
period extends to 12 months, and any remaining 
retention bonus to the CEO will be paid in its 
entirety following the closing of the acquisition, 
as described in Note 10 of the Group financial 
statements. Severance pay equivalent to one year's 
base salary is agreed to be paid to the CEO and 
executive management team members in case of 
involuntary termination within 12 months after a 
potential merger or acquisition. There are otherwise 
no material obligations expected by the Company 
as a result of an acquisition, aside from normal legal 
and advisory fees.

Deviations from the Code of Practice: None.

Auditor
PWC was elected effective 2019 by the Annual 
General Meeting to act as auditor to confirm 
to the Annual General Meeting that Nordic 
Semiconductor’s annual accounts have been 
prepared and presented in accordance with current 
laws and regulations. Fees paid to the auditor are 
approved at the Annual General Meeting.

In the fall, the external auditor presents to the 
Audit Committee an evaluation of risk, internal 
control and the quality of reporting at Nordic 
Semiconductor, and the audit plan for the current 
year. In addition, the auditor meets the Audit 
Committee on a regular basis. The external auditor 
also takes part in the Board’s discussions on the 
annual financial statements. On both occasions, the 
Board of Directors ensures that the Board and the 
external auditor are able to discuss relevant matters 
at a meeting at which the executive management is 
not present.

The auditor shall be independent of the company. 
Therefore, Nordic Semiconductor does not engage 
the elected auditor for tasks other than the financial 
audit required by law. Nevertheless, the auditor 
is used for tasks that are naturally related to the 
audit, such as technical assistance with tax returns, 
annual accounts, understanding of accounting and 
tax rules and confirmation of financial information 
in various contexts. All other services than audit 
services performed by PWC are approved by the 
Audit Committee.

Deviations from the Code of Practice: None.

82

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | DECLARATION OF ANNUAL REPORTNORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | AUDIT OPINION LETTER

Auditor Opinion Letter

83

84

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | AUDIT OPINION LETTER85

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | AUDIT OPINION LETTER86

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | AUDIT OPINION LETTER87

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | AUDIT OPINION LETTERBOARD OF DIRECTORS & EXECUTIVE MANAFEMENT

Board of Directors

Birger Steen | Chair
Chair of the Board since 2018 and board member since 2017

Birger Steen is a technology investor based in Munich, Germany and 
serves as Thematic Partner at Summa Equity AB. He served as CEO of 
Parallels, Inc. from 2010 to 2016. He was Vice President of Worldwide SMB 
and Distribution at Microsoft Corp. in Redmond and General Manager of 
Microsoft Russia and Microsoft Norway from 2002 to 2010. Prior to joining 
Microsoft, Mr. Steen was CEO of Scandinavia Online and Vice President 
of Business Development in Schibsted ASA, where he first served as a 
consultant while at McKinsey & Company from 1993 to 1996. Mr. Steen 
received his MSc in Computer Science and Industrial Engineering from the 
Norwegian Institute of Technology in Trondheim. He also holds a degree 
in Russian language from the Defense School of Intelligence and Security 
in Oslo and received his MBA from INSEAD in France. Mr. Steen serves  as 
a Non-Executive Director of Nordea Bank Abp, where he chairs the Board 
Operations and Sustainability Committee, and PragmatIC Semiconductor 
Ltd. He is Board Chair of Pagero AB and myneva Gmbh, and has previously 
served as a Non-Executive Director of Schibsted ASA and Cognite AS..

Current holdings in the company: 192 643 shares.

Inger Berg Ørstavik | Shareholder elected
Board member since 2017

Inger Berg Ørstavik is an associate professor at the Department of 
Private Law, University of Oslo. She has previously been a partner with 
Advokatfirmaet Schjødt AS and a lawyer at the office of the Attorney 
General for Civil Affairs. Mrs. Ørstavik has a law degree from the University 
of Oslo, a Ll.M. from Ruprecht-Karls-Universität in Heidelberg, Germany, 
and a Ph.D. from the University of Oslo in the areas of intellectual property 
law and competition law. She has taught international human rights law at 
Fudan University in Shanghai, China where she resided from 2005 to 2009. 
Mrs. Ørstavik chairs the Food and Drink Industry Professional Practices 
Committee (MFU).

Current holdings in the company : 3 854 shares

Jan Frykhammar | Shareholder elected
Board member since 2019

Jan Frykhammar is former interim CEO, CFO, Head of Professional Services 
and CFO North America in Ericsson AB. He has extensive knowledge of the 
telecom market and a broad experience in the accounting area in his former 
role as CFO.

Current holdings in the company: 22 854 shares.

89

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | BOARD OF DIRECTORSAnita Huun | Shareholder elected
Board member since 2019

Anita Huun, currently CFO in Cappelen Damm and a former CFO of 
Microsoft Norway with background as equity analyst with focus on IT 
companies. She has also been a Director at Link Mobility ASA.

Current holdings in the company: 11 854 shares.

Endre Holen | Shareholder elected
Board member since 2019

Endre Holen has more than 25 years consultancy experience from McKinsey 
& Co. He has primarily worked with large international technology 
companies and has been Managing Partner for McKinsey's Global Tech 
Media and Telecom team. Mr. Holen also has a broad experience and a 
wide professional network from counseling Fortune 1000 CEOs on topics 
like strategy, corporate performance, succession planning, leadership and 
Board governance.

Current holdings in the company: 153 484 shares.

Øyvind Birkenes | Shareholder elected
Board member since 2019

Øyvind Birkenes, currently the CEO at Airthings AS, and formerly General 
Manager for Low Power RF at Texas Instruments (TI) in the USA, where he 
headed the product lines that developed and sold ultra-low power wireless 
MCUs, radio transceivers and System on Chips.

Current holdings in the company: 9 196 shares.

Annastiina Hintsa | Shareholder elected
Board member since 2019

Annastiina Hintsa is the CEO of Hintsa Performance in Finland, a company 
focusing on enhancing the performance and leadership of client companies, 
best known for working with Formula 1 teams. Ms. Hintsa also has 
experience from McKinsey & Co. and from the Bank of Finland.

Current holdings in the company: 2 854 shares.

90

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | BOARD OF DIRECTORSJon Helge Nistad |  Employee elected
Board member since 2017

Jon Helge Nistad has a Master of Science degree in Electrical Engineering 
from NTNU in Trondheim. Jon Helge has been employed in Nordic 
Semiconductor since 2006, where he has gained experience in application 
development, embedded software design and project management. He is 
currently working as a Senior R&D engineer in Nordic Semiconductor.

Current holdings in the company: 0 shares, 927 share options and 898 RSUs.

Joel Stapleton | Employee elected
Board member since 2020

Joel Stapleton is an Engineer, graduating with honors from The Australian 
National University in 2002. He joined Nordic in 2008 after working with 
GPS systems and secure communication systems in Australia. At Nordic, 
Joel has had several roles as an embedded SW Engineer, SW Architect, and 
since 2012, as a Technical Product Manager specifying Wireless SoC and 
Bluetooth SW platform products working with Nordic Sales and R&D teams 
and key customers.

Current holdings in the company: 0 shares, 1 095 shares options and 3 124 
RSUs.

Susheel Raj Nuguru | Employee elected
Board member since 2018

Susheel Raj Nuguru has a Master of Science in Electronics from Tampere 
University of Technology. He has been with Nordic since 2012 but has been 
working with embedded programming since 2004. His area of focus is 
the software side of real time systems. Susheel is currently employed as a 
Technical Support senior engineer at Nordic. During his employment with 
Nordic he has gained experience within sales, marketing and R&D while 
working for various departments.

Current holdings in the company: 0 shares, 855 share options and 
886 RSUs.

Morten Dammen | Employee elected
Board member since 2019

Morten Dammen has a Master of Science degree in Electrical Engineering 
from NTNU in Trondheim. Morten has been employed in Nordic 
Semiconductor since 2001, with a seven-year break between 2007 and 2014. 
Morten is currently working as a Senior Project Manager in IC development. 
Morten has also been working in Q-Free ASA for 10 years, in several 
positions from project management, team management to VP R&D.

Current holdings in the company: 0 shares, 1 186 share options and 2 
635 RSUs.

91

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | BOARD OF DIRECTORSNORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | EXECUTIVE MANAGEMENT

Executive Management Team

Svenn-Tore Larsen | Chief Executive Officer / President
Leader of the Executive Management Team since 2002

Mr. Larsen is an Electronic Engineer from the University of Strathclyde, 
UK. He was appointed Chief Executive Officer of Nordic Semiconductor 
in February 2002. Mr. Larsen has broad international experience in the 
semiconductor business, previously as Director for the Nordic region for 
Xilinx Inc. He has also been working at Philips Semiconductor. Larsen 
was member of the Board of Nordic Semiconductor from 2000-2002. 
Svenn-Tore Larsen is based in Oslo, Norway.

Holdings in the company: 1 905 400 shares, 12 721 share options, 21 554 
RSUs and 30 270 performance shares.

Pål Elstad | Chief Financial Officer / EVP Finance
Member of the Executive Management Team since 2014

Pål Elstad has held several senior financial positions, most recently as 
investor relations responsible for REC Silicon ASA and Head of Finance 
for REC Solar in Singapore. He joined Nordic as CFO in 2014. Mr. 
Elstad has extensive manufacturing and supply-chain experience from 
General Electric Healthcare. He holds a Bachelor of Economics degree 
from the Norwegian Business School (BI) and is a State Authorized 
Public Accountant (CPA). Pål Elstad is based in Oslo, Norway.

Holdings in the company: 18 846 shares, 29 761 share options, 6 345 
RSUs and 12 747 performance shares.

Katarina Finneng | EVP People & Communication
Member of the Executive Management Team since 2019

Mrs. Finneng has extensive international experience within 
management, Human Resources and Communication/PR from several 
different sectors. Her most recent position before joining Nordic in 
2019 was with Norwegian Air Shuttle ASA, and previous experience 
includes different roles in Hafslund ASA and the Volvo Group. Mrs. 
Finneng holds a Master of Political Science degree from the University 
of Gothenburg, Sweden, as well as an Executive Master degree in 
Management from BI Norwegian Business School. Mrs.Finneng is 
Secretary of the Board's People and Compensation Committee and 
holds a Directorship of the Board in the real estate development 
company Solon Eiendom ASA. Katarina Finneng is based in Oslo, 
Norway.

Holdings in the company: 600 shares, 6 667 share options, 7 765 RSUs 
and 7 765 performance shares.

92

Marianne Frydenlund | SVP Legal and Compliance
Member of the Executive Management Team since 2018

Mrs. Frydenlund holds a law degree from the University of Oslo 
and North Dakota. She started her career in 2007 as a Warranty 
Responsible in StatoilHydro (Equinor), before taking on various Legal 
Counsel and Contract Manager positions. Her experience includes 
working for Huawei Technologies, Aker Engineering & Technologies 
(Aker Solutions) and Nexans Norway. Mrs.Frydenlund chairs the Board 
of the Norwegian Company Lawyers Association and is an appointed 
expert of TechForum by the same association.  Mrs.Frydenlund joined 
Nordic in 2018, and also acts as Secretary to the Board of Directors. 
Marianne Frydenlund is based in Oslo, Norway.

Holdings in the company: 2 500 shares, 4 315 share options, 5 927 
RSUs, and 9 433 performance shares.

Kjetil Holstad | EVP Product Management
Member of the Executive Management Team since 2019

Mr. Holstad has a B.Sc degree in Electronics from Sør-Trøndelag 
University College (HiST). After working 15 years in various technical 
and marketing positions related to MCUs and wireless technologies in 
Atmel Corporation and Texas Instruments, he joined Nordic in 2015 as a 
Product Manager for the short range wireless business. Kjetil Holstad is 
based in Oslo, Norway.

Holdings in the company: 6 604 shares, 4 691 share options, 6 432 
RSUs and 10 243 performance shares.

Geir Langeland | EVP Sales and Marketing
Member of the Executive Management Team since 2005

Mr. Langeland has a Bachelor of Engineering (Honours) degree in 
Electronics from University of Manchester Institute of Science and 
Technology (UMIST). He started as a Product Manager Standard 
Components in Nordic Semiconductor in 1999, before being appointed 
as a member of the Executive Management Team in 2005. Before 
joining Nordic, Mr. Langeland worked as Field Sales/Applications 
Engineer in Memec Norway, a leading global electronic components 
distribution company. Geir Langeland is based in Oslo, Norway.

Holdings in the company: 187 700 shares, 8 256 share options, 12 760 
RSUs and 16 517 performance shares.

Ole-Fredrik Morken | EVP Supply Chain
Member of the Executive Management Team since 2010

Mr. Morken joined the company as an Analog IC designer in 1994 and 
has since held numerous positions related to Project- and Supply Chain 
Management, including a brief employment for SensoNor ASA in 1999. 
Mr.Morken holds a Master's degree in Electroncs Engineering from 
Norwegian niversity of Science and Technology (NTNU). Ole Fredrik 
Morken is based in Taipei, Taiwan.

Holdings in the company: 180 000 shares, 6 567 share options, 7 566 
RSUs and 12 901 performance shares.

93

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | EXECUTIVE MANAGEMENTSvein-Egil Nielsen | Chief Technology Officer / EVP 
R&D and Strategy
Member of the Executive Management Team since 2013

Mr. Nielsen holds MBA from the Haas School of Business at the 
University of California, Berkeley and Bachelor of Engineering 
honors degree in Computer and Electronics Systems from University 
of Strathclyde. He joined Nordic in 2001 as Director of Sales and 
Marketing. Mr.Nielsen  also held a position as R&D director from 
2005 to 2006 and Director of Emerging Technologies and Strategic 
Partnerships from 2010 to 2012. Additionally, he served Innovation 
Norway as their Director of San Francisco and Houston offices where 
he was in charge of promoting Norwegian technology from 2007 to 
2010. Prior to Nordic, he worked for Boston Consulting Group as a 
consultant. Svein-Egil Nielsen is based in Oslo, Norway.

Holdings in the company: 17 000 shares, 9 381 share options, 10 627 
RSUs and 18 249 performance shares.

Ebbe Rømcke | SVP Quality and Sustainability
Member of the Executive Management Team since 2002

Mr. Rømcke has a M.Sc. degree in Electronics Engineering from 
Norwegian University of Science and Technology (NTNU). Mr. Rømcke 
has held different positions in Nordic such as Digital Designer, Project 
Manager and Group Manager. He has also experience from Digital 
Design and Project Management in Normarc AS (now Indra), a leading 
manufacturer of aviation systems. Ebbe Rømcke is based in Oslo, 
Norway.

Holdings in the company: 69 900 shares, 5 254 share options, 6 335 
RSUs and 10 603 performance shares.

Ståle "Steel" Ytterdal | SVP IR
Member of the Executive Management Team since 2019

Mr. Ytterdal holds a Bachelor of Electronics Engineering and Business 
Administration from NKI College of Engineering in Oslo, Norway. He 
worked several years in Ericsson Standard Component before starting 
in Nordic as Regional Sales Manager for Asia and the Pacific in 2001. 
Between 2004 and 2019, Mr. Ytterdal was stationed in Hong Kong as 
Director of Sales&Marketing in APAC, establishing Nordic’s presence 
in the region. He also held a position as Director of the Board of the 
Norwegian Chamber of Commerce in Hong Kong from 2005-2008. 
Mr. Ytterdal moved back to Oslo/Norway in 2019, where he now has 
his base.

Holdings in the company: 126 000 shares, 5 816 share options, 6 480 
RSUs and 11 206 performance shares.

94

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | EXECUTIVE MANAGEMENTNORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | ALTERNATIVE PERFORMANCE MEASURES

Alternative 
Performance Measures

The financial information is prepared in accordance with International 
Financial Reporting Standards (IFRS) as adopted by EU. Additionally, it is 
management’s intent to provide alternative performance measures (APM) 
that are regularly reviewed by management to enhance the understanding 
of the Group’s performance. An Alternative Performance Measure is a 
measure of historical or future financial performance, financial position, 
or cash flows other than a financial measure defined or specified in the 
applicable financial reporting framework.

The Group has identified the following APMs used in reporting (amount in USD million):

■  Gross Margin. Gross Profit divided by Total Revenue. 
Gross margin is presented as it is the main financial 
KPI to measure the Group’s operations performance.

■  EBITDA.  Earnings  before  interest,  taxes  (operating 

profit), depreciation and amortization.

GROUP

Gross profit

Total revenue

Gross margin

2021

326.6

610.5

53.5%

2020

213.9

405.2

52.8%

GROUP

EBITDA

Total revenue

EBITDA Margin

2021

124.7

610.5

20.4%

2020

76.8

405.2

18.9%

EBITDA  terms  are  presented  as  they  are  commonly 
used by investors and financial analysts.

■  EBITDA Margin. EBITDA divided by Total Revenue. 

GROUP

Operating profit

Depreciation

EBITDA

2021

86.9

37.8

124.7

2020

45.7

31.1

76.8

■  Short-range EBITDA Margin. EBITDA excluding 
cellular IoT, divided by Total Revenue excluding 
cellular IoT revenue. This APM shows Nordic's 
profitability excluding products in an investment 
phase with limited revenue.

GROUP

Reported EBITDA

Long range (cellular IoT) EBITDA 
loss

Wi-Fi expense

Short-range EBITDA

Total revenue (excluding cellular 
IoT revenue)

2021

2020

124.7

76.8

38.5

30.2

12.3

0.0

175.6

106.9

593.5

398.7

Short-range EBITDA margin

29.6%

26.8%

95

■  Cash Operating Expenses. Total payroll and other operating expenses adjusted for non-cash related items including 
option  expenses,  receivable  write-off  and  capitalization  of  development  expenses.  Nordic  management  believes 
that this measurement best captures the expenses impacting the cash flow of the Group.

GROUP

Payroll expenses

Other operating expenses

Depreciation

Total operating expenses

Depreciation

Option expense

Capitalized expenses

Cash operating expenses

2021

149.8

52.1

37.8

239.7

-37.8

-7.6

5.6

2020

101.2

36.0

31.1

168.2

-31.1

-4.3

8.4

199.9

141.3

■  Last  twelve  months  operating  expenses  excluding  depreciation  divided  by  last  twelve  months  revenue.  Nordic’s 
business is seasonal and by dividing last twelve months operating expenses excl. depreciation by last twelve months 
revenue, management is able to track cost level trends in relation to revenue. As a growth business it is key to keep 
cost level under control while still growing the business, and this ratio keeps track on that.

GROUP

Total operating expenses

Depreciation

Operating expenses excluding depreciation and amortization

Total revenue

LTM opex / LTM revenue

2021

239.7

-37.8

201.9

610.5

2020

168.2

-31.1

137.2

405.2

33.1%

33.8%

■  Net working capital divided by last twelve months revenue. Net working capital is a measure of both a company's 
efficiency and its short-term financial health, and by dividing the measure by last twelve months, seasonal effects 
are excluded. Nordic management uses this ratio to report on liquidity management to the financial market and 
internally to track performance.

GROUP

Current assets

Cash and cash equivalents

Current liabilities

Current financial liabilities

Current lease liabilities

Income taxes payable

Net working capital

Total revenue

NWC / LTM revenue

2021

488.0

2020

401.9

-279.3

-242.5

-123.7

-91.9

0.5

5.6

17.4

108.4

610.5

17.8%

0.3

5.5

5.0

78.3

405.2

19.3%

■  Backlog. Customer orders placed by the end of the reporting period for delivery in next and following quarters. This 

APM can be used as support for guidance for next quarter.

96

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | ALTERNATIVE PERFORMANCE MEASURESENVIRONMENTAL, SOSCIAL AND GOVERNANCE

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | ENIVIRONMENTAL, SOCIAL AND GOVERNANCE

About the ESG 
section of the report

This is the 9th ESG Report published by Nordic Semiconductor, which is 
included in our annual report for 2021. This report has been prepared 
in accordance with Global Reporting Initiative (GRI) standards (Core 
option), the world's most widely used sustainability reporting standard. 
Respective GRI Index can be found in Nordic Semiconductor website.

This section of the annual report describes Nordic Semiconductor’s policies, 
goals, implementation, and outcome of its performance on key ESG issues 
such as human- and labor rights, environmental impact reduction, anti-
corruption, and occupational health and safety.

Nordic Semiconductor is a signatory of the UN Global Compact and this 
report represents our official Communication on Progress (COP).

This report follows the requirements of Norwegian Accounting Act, Section 
3-3. 

The scope of this report is company wide and for the 2021 calender year. 
unless otherwise stated.

98

99

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | ENIVIRONMENTAL, SOCIAL AND GOVERNANCEOUR ESG FOUNDATION

100

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | ESG REPORT 2021Our ESG Foundation

Systematic approach to ESG
At Nordic Semiconductor, we believe that incorporating sustainability into the business strategy through ESG 
focus is key to ensure development on a global scale as well as  business success. The focus is represented in 
our vision, which is translated into business goals and processes for daily operations. 

Nordic Semiconductor’s management system is ISO 9001 Quality Management System, ISO 14001 
Environmental Management System, ISO 45001 Occupational Health and Safety Management System, and 
ISO 27001 Information Security Management System certified. These standards provide the basis for the 
company’s management system to ensure a systematic approach to improving our business processes in 
general, including the company’s performance on ESG topics.

101

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 |OUR ESG FOUNDATIONNordic Semiconductor's Policy on Corporate Social Responsibility 
Nordic Semiconductor’s operating practices, decisions, and management systems shall be guided by, and 
transparently reflect that we:

■  Are accountable for our impact on the society and the environment.

■  Respect stakeholder’s interests.

■  Behave ethically and respect human rights at all times and will not tolerate any form of forced labor or child labor 

in our supply chain.

■  Respect the rule of law and international norms of behavior.

■  Prohibit any retaliatory action for reporting or inquiring about alleged improper or wrongful activity.

Specifically, Nordic and its tier one suppliers shall adhere to the Responsible Business Alliance (RBA) code of 
conduct. Nordic shall actively encourage tier 1 suppliers to require the same from their suppliers.

Managing ESG in Nordic Semiconductor 
Establishing an ESG Committee as well as a 
Sustainability group during 2021, will enhance 
Nordic Semiconductors' ESG focus. Several of our 
members in the Executive Management Team 
(EMT) has overall responsibility for the company’s 
respective ESG performance. The ESG Committee 
consists of subject matter experts from the EMT 
members' respective business areas, such as Legal, 

HR, Supply Chain, Quality and Sustainability, as well 
as the Sustainability group. The Committee has an 
advisory role in forming company strategies on ESG 
topics and defining corresponding programs for 
improving performance. 

Since 2021, Nordic Semiconductor has incorporated 
ESG KPIs in its incentive programs.

102

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 |OUR ESG FOUNDATIONOur commitments and frameworks
Nordic Semiconductor has based its ESG commitment on international initiatives to address individual ESG 
topics and set relevant requirements for its operations.

Nordic Semiconductor’s commitments and frameworks for managing ESG topics.

We have been committed to following the RBA 
Code of Conduct since 2007 and aligned our 
policies with its principles while engaging with our 
suppliers for improved CSR performance. Following 
our vision for a sustainable business, in 2021 
Nordic Semiconductor became a member of RBA 
to strengthen our commitment to the RBA code 
of conduct and engage with our stakeholders to 
achieve common industry goals: Advancing labor 
rights, health and safety, environment preservation, 
and ethics worldwide.

RBA Code of conduct:
Responsible Business Alliance (RBA) is the world’s 
largest industry coalition dedicated to corporate 
social responsibility (CSR) in global supply chains. 
The standards set out in the RBA Code of Conduct 
reference international norms and standards 
including the Universal Declaration of Human 
Rights, ILO International Labor Standards, OECD 
Guidelines for Multinational Enterprises, as well 
as International Organization for Standardization 
(ISO) and Social Accountability International 
SA Standards.

The RBA Code of Conduct is a set of standards 
on social, environmental, and ethical issues in the 
electronics industry supply chain. The provisions set 
out in the Code of Conduct are in alignment with 
the UN Guiding Principles on Business and Human 
Rights and derived from key international human 
rights standards, including the ILO Declaration on 
Fundamental Principles and Rights at Work and the 
UN Universal Declaration of Human Rights. 

103

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 |OUR ESG FOUNDATIONUN Global Compact principles
The Ten Principles of the United Nations Global 
Compact are fundamental responsibilities 
formulated for human rights, labor, environment, 
and anti-corruption. 

Nordic Semiconductor has committed to the UN 
Global Compact ten principles and has been 
the signatory to the ten principles  since 2016. 
By incorporating the Ten Principles of the UN 
Global Compact into Nordic Semiconductor’s 
strategies, policies, and procedures, we are 
assured the principles are strongly rooted in our 
business foundation.

UN Sustainable Development Goals
In 2015, the United Nations established the 17 
Sustainable Development Goals which make up a 
systematic global framework to end the biggest 
challenges of our planet by 2030. To achieve 
these goals, utilizing emerging technologies like 
the Internet of Things (IoT) can offer promising 
and effective solutions. Nordic Semiconductor has 
recognized sustainable development challenges 
and is strategically positioned to assist with these 
challenges. Our company's SDG contributions are 
categorized in three business scopes: products, 
operations, and engagements. The support on 
UN SDGs from our operation and engagement is 
described in this ESG section of the report.

The ten principles of the UN Global Compact

Human Rights
Businesses should:

■  Principle 1: Support and respect the protection of internationally proclaimed human rights

■  Principle 2: Ensure that they are not complicit in human rights abuses

Labor
Businesses should:

■  Principle 3: Uphold the freedom of association and the effective recognition of the right to collective bargaining

■  Principle 4: Eliminate all forms of forced and compulsory labor

■  Principle 5: Abolish child labor

■  Principle 6: Eliminate discrimination in respect to employment and occupation

Environment
Businesses should:

■  Principle 7: Support a precautionary approach to environmental challenges

■  Principle 8: Undertake initiatives to promote greater environmental responsibility

■  Principle 9: Encourage the development and diffusion of environmentally friendly technologies

Anti-Corruption
■  Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery

104

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 |OUR ESG FOUNDATIONIoT Innovation and Sustainability
At Nordic Semiconductor, we believe that our 
technology drives digital transformation of 
sustainable growth. Within IoT, the capability of 
smart connected devices to enable and advance 
applications such as environmental monitoring, 
territorial management, and energy optimization 
is well known. With the rising focus on building a 
green economy, IoT technology has the potential to 
enable greener solutions for enterprises, cities, and 
communities. These applications include reducing 
energy, costs and resources, enabling remote 
deployments, monitoring failure points, and many 
others. 

Recognized as the world’s leading Bluetooth LE chip 
vendor, Nordic Semiconductor has evolved into a 
wireless IoT company that enables our customers to 
‘connect anything’. These IoT solutions are used in 
a wide variety of applications optimizing resource 

usage in areas of energy, travel, time/distance, 
transport, maintenance, manufacturing, agriculture, 
waste handling, and smart cities. Affordable IoT 
solutions can directly address any of the 17 UN 
SDGs depending on how solutions are designed 
and utilized in an innovative way. 

To give a better understanding of how Nordic’s 
products may contribute to the sustainable 
development and SDGs, a conceptual illustration 
of the Internet of Things (IoT) is shown in the figure 
below..

Nordic Semiconductor continuously adds more 
intelligence and capability into its products while 
using less energy. This enable the ”things” to harvest 
energy  locally, do efficient data analytics, minimize 
data transfers, and thereby offloading the power-
hungry data centers.

Conceptual illustration of the Internet of Things. Nordic Semiconductor continuously adds more intelligence and capability into its 
products while using less energy. This enable the ”things” to do efficient data analytics locally, minimize data transfers, and thereby 
offload the power-hungry data centers.

105

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 |OUR ESG FOUNDATIONNordic ICs are used in LED luminaires and lighting 
controls which are replacing older technologies 
in existing buildings. From this perspective, CO2 
reduction comes from more energy-efficient 
LEDs, compact product footprint, paper and 
carton elimination, or lower fuel use tied to 
product shipments. 

Smart lighting and LED lighting that have Nordic 
inside, contribute to a significant CO2 emission 
reduction. Each fixture is saving an average of 40 
Watts, plus an additional 25% in control savings. 
Measured in CO2e, Nordic nRF51 Series SoCs inside 
Acuity's solutions has contributed to an estimated 
1.33 million metric tons of CO2 emission saving  
since 2016, and nRF52 Series SoCs an additional 1 
million metric tons since 2018.

Such examples, along with Nordic's special position 
in IoT technology development, make Goal #9 
“Industry, innovation and infrastructure", a core SDG 
for the company. Nordic Semiconductor targets to 
make our product's positive contribution larger than 
our adverse impacts.

Real life SDG contribution 
examples
An example of a Nordic 
supported IoT solution for 

harvesting energy from its surroundings is the 
battery-free, self-powered leak detection device that 
has been released by AquaSensing, a Canadian 
technology company. Their Leak Sensor 1.0 uses 
a proprietary sensor that acts as both a power 
source and sensor for detecting water leaks, as 
well as Nordic Semiconductor’s nRF52832 Bluetooth 
Low Energy multiprotocol System-on-Chip for 
communication. This eco-friendly solution prevents 
water damage and eliminates battery waste from 
its operation. 

Nordic's own SmartHive, capable of 
aiding and monitoring several beehives 
at our offices in Norway, is a showcase 
for a generic IoT system including energy 
harvesting, edge computing, and machine learning.

IoT solutions can also contribute to 
to reduceeGreenhouse Gas (GHG) 
emissions and to support the SDG for 
Climate Action. An example can be seen 
from Nordic Semiconductor's partnership with Acuity 
Brands, Inc. Acuity is a market-leading industrial 
technology company that brings lighting, lighting 
controls, building management, and location aware  
applications to the market, and since 2016, Nordic 
has delivered Bluetooth low-energy solutions to 
this company. Using Nordic ICs, Acuity's innovative 
products provide customers with smarter, more 
energy and cost effective lighting solutions, which in 
turn minimizes carbon emissions.

In 2021, Nordic customers used our IoT solutions 
for various types of applications such as smart 
city systems, health applications, livestock/asset 
tracking, construction, industrial monitoring systems, 
agricultural monitoring, environmental monitoring, 
etc. contributing to various SDGs. Additional 
examples can be found on nordicsemi.com.

While the use cases for supporting the SDGs by 
Nordic’s products are virtually limitless, the impact 
on the environment from production and use 
of the components should also be considered. 
Nordic is committed to reducing its environmental 
impact from operations and has set short- and 
long-term goals for emission reductions. For 
more on this, please refer to the chapter on 
Environmental Perspectives.

106

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 |OUR ESG FOUNDATIONSupplier management 
in a fabless structure
As a fabless company, Nordic Semiconductor 
relies heavily on its manufacturing partners to 
manage the production of physical goods and the 
production facilities. As such, a strong focus on 
supplier management is important not just to ensure 
high-quality deliverables, but also to guarantee 
proper management of ESG issues in our supply 
chain. See the figure below for a generic illustration 
of the company’s value chain.

Nordic Semiconductor has a dedicated Supply 
Chain department, with the Supply Chain EVP as 
part of the company’s Executive Management Team. 
This part of the organization is responsible for 
managing the company’s manufacturing partners.

Performance management is a key element of 
Nordic Semiconductor’s supplier management 
in which the Supply Chain department conducts 
regular supplier audits and follow-up of audit results 
to improve supplier performance. Furthermore, the 
Supply Chain department’s normal operational 
routines include addressing targets and deadlines 
with suppliers and organizing business reviews at 
defined intervals.

ESG topics are considered throughout the whole 
supplier life cycle, beginning with new supplier 
qualification and onboarding. Management of ESG 
topics is handled through questionnaires, audits, 
and checking of relevant certifications. 

Qualified suppliers are annually evaluated for 
potential risks of ESG related topics based on the 
RBA risk assessment model. This model consists 
of 4 steps including: RBA risk assessment, Self-
Assessment questionnaire (SAQ ), Validated Audit 
Program, and Corrective actions. Any significant 
finding will be assessed and considered in sourcing 
decisions through our management systems.

Nordic Semiconductor has direct contact primarily 
with its tier 1 suppliers. To limit the risk of 
unacceptable business behavior further upstream 
in the value chain, these suppliers are required 
to adhere to the RBA Code of Conduct and to 
promote and require such adherence from their 
suppliers (Nordic’s tier 2 suppliers). 

Nordic Semiconductor’s value chain, with indication of Nordic’s contribution to relevant SDGs

107

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 |OUR ESG FOUNDATIONGood relationships with our manufacturing 
partners are essential to ensure that any reported 
issues are addressed immediately. Potential issues 
that can affect our supply chain are regularly 
monitored. Any potential issues are checked with 
our manufacturing partners and relevant actions are 
taken as necessary.

Nordic Semiconductor’s manufacturing partners 
are required to be certified to ISO 9001, ISO 45001, 
and ISO 14001. Several also carry certifications 
to various automotive and other environmental 
standards. The following table  summarizes the 
relevant certifications and membership of our 
manufacturing partners. 

To ensure that unwanted business practices are 
reported to us, Nordic Semiconductor's third party 
whistleblower channel is available on our website. In 
addition, RBA has a reporting channel for workers 
to provide their feedback.

Nordic Semiconductor has been working with 
globally recognized suppliers in terms of ESG 
management. Our key suppliers, TSMC and 
ASE, have received multiple awards for their 
sustainability practices.

Indicator

ISO 9001 certified suppliers

ISO 14001 certified suppliers

ISO 45001/OHSAS certified suppliers

Suppliers RBA membership

Suppliers with ESG low risk (based on RBA topics)

Suppliers completed RBA Self Assessment Questionnaire

Suppliers documented RBA Code of Conduct policy

Suppliers communicating RBA Code of Conduct to next tier

Suppliers Audited under RAB Audit program

 Measurements related to Supplier management.

Year 2021

100%

100%

100%

70%

100%

80%

100%

100%

30%

108

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 |OUR ESG FOUNDATIONMateriality
With a global business model and a rapidly growing 
company, Nordic Semiconductor faces multiple 
stakeholders with different needs and requirements. 
We value feedback from all stakeholders and 
take suggestions into account when reviewing 
our Sustainability issues and their impact on our 
business. Communication with stakeholders is 
important for continuous improvement on our ESG 
performance. Our objectives are to: 

■  Understand stakeholders’ concerns and continue to 

improve ESG-related performance

■  Gain stakeholders’ trust and respect for Nordic 

Semiconductor

■  Report on Nordic Semiconductor’s efforts 

and performance to maintain and enhance 
our reputation

Stakeholders are internal or external people 
and organizations that have influence on Nordic 
Semiconductor or can be influenced by Nordic 
Semiconductor. The most relevant stakeholders are 
identified as investors, customers and distributors, 
employees, manufacturing partners, authorities, and 
the community/public. 

109

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 |OUR ESG FOUNDATIONTo understand which social, economic 
and environmental issues matter most 
to our stakeholders and to our long-                                                                                                                             
term business success, we conduct an annual 
materiality analysis. This also enables us to meet 
the applicable reporting requirements of the Global 
Reporting Initiative (GRI) and UN Global compact. 

We follow materiality methodology suggested by 
GRI to define and map ESG material topics to 
measure implement mechanisms and report on. The 
process of deciding which topics are material and 
valuable to spend resources on, improve and report 
on is illustrated in the figure below. This report 
describes management of material topics and their 
performance metrics. Topics that are considered 
less material will primarily be included to explain the 
reasoning for being evaluated as such.

Nordic Semiconductor’s process for prioritizing actions and programs for our material ESG topics.
Materiality assessment of ESG topics related to  indicated UN SDGs . The assessment is performed by GRI methodology.

110

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 |OUR ESG FOUNDATIONTopic

Description

Relevant SDGs

ESG section 
reference page

Anti-Corruption & Integrity

Anti-corruption and Business ethics

Goal 16

Diversity & Inclusion

Diversity in employee workforce, and 
non-discrimination

Goal 5

134

127

GHG emission/climate change

GHG emission reduction targets and 
performance

Goal 13

115 -117

Hazardous substances

Health & Safety

Human capital development

Hazardous substance management of 
products and manufacturing processes

Goal 12

117, 118

Occupational health and safety 
management system

Goal 8

129, 130

Process of improving an organization's 
employee performance, capabilities, 
and resources

Goal 8

128

Human rights and labor rights

Modern slavery, child labor, freedom of 
employment

Goal 8

123-124

Information Security

Air Pollution

Privacy

Protection of information's 
confidentiality, integrity, and availability

Non-GHG air emission

Protection of personal data and 
upholding individuals privacy rights

Goal 16

Goal 12

Goal 16

Product end of life treatment

End-of life treatment of products

Goal 12

135

120

135

119

Product Innovation and Sustainability

Resource reduction

Waste handling

Water 

Nordic products' potential impact on 
SDG

Plastic reduction, ECO design, Green 
procurement

Office waste, hazardous waste, 
recycling, landfill, etc.

Water consumption within operations 
and beyond

Goal 9

105, 106

Goal 12

Goal 12

Goal 12

118

119

119

Nordic Semiconductor's ESG topics and their relation to UN SDGs. 

111

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 |OUR ESG FOUNDATIONStakeholder communication
As a result of the dialogue with stakeholders, we try to understand their expectations and use that as 
guidance when we define our ESG material topics, helping place focus on areas for improvement. 

Stakeholders

Stakeholder dialogue examples

Main areas of interest (ESG)

Investors

1.  Quarterly reporting
2.  Annual report
3.  Direct contact
4.  Annual general meeting
5.  Capital Market day

Ethics and Anti-corruption 

Environmental Product Compliance

GHG emissions and Renewable Energy consumption

Water management

 IoT Innovation and Sustainability

Diversity and Inclusion

Environmental Product compliance

Eco Design

Responsible sourcing

GHG emissions and Renewable Energy consumption

Water risk assessment

Information Security, Product Security

Diversity and Inclusion

Human Capital Development

Ethics and Anti-corruption

Health and Safety

Diversity and Inclusion

Non-discrimination

Information Security, Data privacy

GHG emission

1.  Direct contact
2.  Nordic Semiconductor 

webpage

3.  Nordic Semiconductor 

DevZone

4.  Customer surveys
5.  Participation on exhibitions 

and seminars
6.  Customer Audits
7.  Contractual binding Codes 

of Conduct

1.  Daily contact
2.  Performance reviews
3.  Employee satisfaction survey
4.  Nordic Semiconductor 

intranet

5.  Quarterly reporting meetings
6.  Employee unions and 

representatives
7.  Exit interviews
8.  Whistleblower channel

1.  Quarterly performance 

Environmental Product compliance

reviews

2.  Supplier audits
3.  Yield improvement and 
waste reduction projects

4.  Supplier qualification

Responsible sourcing

Human rights and labor rights compliance

Environmental management

1.  Legislative requirements
2.  Audits
3.  Authorities advisory 

functions

4.  Newsletter monitoring

Product compliance

Waste management

Anti-corruption

Working environment

Customers and 
distributors

Employees

Subcontractors

Authorities

Community and public

1.  Press releases
2.  Business presentations at 
educational institutions

Data privacy and Information Security

Ethics and Anti-corruption

Community Engagement

Human Capital Development

Non-profitable 
organizations

1.  Regular Standards 

Carbon disclosure project

announcements Press 
releases

2.  Newsletter and subscriptions 

monitoring 

3.  Business presentations at 
educational institutions

Sustainable Development Goals

RBA Code of Conduct

UN global Compact principles

Stakeholders dialogue, main areas of interest related to ESG, and Nordic Semiconductor response.

112

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 |OUR ESG FOUNDATIONDECKLARATION TO THE ANNUAL REPORT

113

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | UN SUSTAINABLE DEVELOPEMENT GOALSEnvironmental perspectives

Nordic Semiconductor recognizes that environmental responsibility and 
sustainability is key to producing world-class products and long-term 
business strategies. Product compliance is a prerequisite for selling Nordic 
Semiconductor’s products worldwide, meeting international legislation as 
well as customer-specific requirements to product design and production. 
At the same time, we see customers, markets, and society becoming more 
aware of and concerned with, carbon footprints and energy usage.

Nordic Semiconductor designs and develops ultra-
low power products, enabling energy efficient 
end products for the consumer. Furthermore, 
the company is targeting to increase the share 
of renewable energy and reduce greenhouse 
gas (GHG) emissions, specifically from our 
own operations, while also engaging with 
our manufacturing partners to manage and 

reduce our environmental impact through their 
manufacturing processes.

This chapter outlines our system of managing 
environmental aspects of our business. It is 
also a response to the Norwegian Accounting 
Act (Regnskapsloven Section 3-3) on Social 
responsibility reporting.

Nordic Semiconductor’s Environmental Policy
Being a preferred partner to environmentally conscious stakeholders, Nordic Semiconductor shall incur no loss 
of business or profitability due to incidents or issues related to disturbance to health or environment.

Nordic Semiconductor is committed to:

■  Comply  with  applicable  legal  requirements,  and  regulations,  and  protect  the  environment  through  sound 

management practices and decisions

■  Protect the natural environment by minimizing waste generation, pollution and GHG emissions, resource and water 
consumption,  and  the  use  of  hazardous  materials  in  our  products,  as  well  as  develop  and  use  environmentally 
friendly technologies

■  Promote environmental responsibility and ensure that our suppliers live up to Nordic Semiconductor’s environmental 

standard

■  Establish  and  evaluate  achievable  environmental  performance  goals  to  ensure  continuous  improvement  of  our 

environmental management system

■  Regularly  monitor  and  report  on  environmental  performance,  and  to  consult  with  relevant  stakeholders  on 

environmental issues

The key environmental issues are embedded in 
Nordic Semiconductor's environmental policy. The 
policy is regularly reviewed and approved by the 
Executive Management Team. Through this policy, 
Nordic strives to ensure its commitment to the 
highest standards of environmental protection and 
implement the best environmental practices.

Nordic Semiconductor carefully considers its 
potential environmental impact in its decisions 
and systematically analyzes the company’s 
environmental aspects and the associated risks and 
opportunities, considering activities and the product 
life cycle. Environmental aspects noted as having 
a high risk or connected to a legal requirement 
are considered significant and are subject to risk 
reducing actions to minimize their adverse impact 

on the environment. A general description on the 
risk methodology is shown in Nordic processes 
figure on page 109.

Nordic Semiconductor has implemented guidelines 
and procedures into its management system to 
supplement legal requirements and integrate them 
in daily working routines. To identify and mitigate 
any possible risk and implement the changes 
into our activities, we have a proactive approach 
towards regulatory compliance.

Nordic Semiconductor is ISO 14001 Environmental 
Management Systems certified. All Nordic 
Semiconductor’s manufacturing partners are 
required to be certified with this standard, as well 
as to be compliant to RBA Code of Conduct and its 
provisions on environmental topics.

114

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | ENVIRONMENTAL PERSPECTIVESRaising awareness amongst employees on 
environmental issues relevant for Nordic 
Semiconductor is regularly done by internal 
training, and as part of the mandatory introduction 
program for new employees. Employees who deal 
with environmental issues as part of their regular 
process flows, undergo designated training for the 
relevant topics.

Monitoring data in relation to environmental 
topics and engaging with suppliers are relevant 
parts of decision-making and risk analysis. Nordic 
Semiconductor regularly analyzes data from 
manufacturing partners, and supplier audits 
are used to follow-up on suppliers’ compliance 
with standards, specifications, and legislative 
requirements. Results and measurements from the 
environmental programs are reviewed annually in 
the Management review.

Nordic Semiconductor has set a target of zero 
environmental product or company compliance 
incidents. Any incidents are handled through Nordic 
Semiconductor’s non-conformity procedures, with 
root cause analysis and corrective and preventive 
actions. In 2021, there were no environmental 
incidents or non-conformities. 

In 2020 Nordic Semiconductor initiated a Renewable 
Energy Program, with an aim to reduce GHG 
emissions by increasing renewable energy usage 
within company direct operations and supply chain. 
See separate section on Greenhouse Gas emissions.

Greenhouse gas emissions

Renewable Energy Program
Through our Renewable Energy Program, 
the goal is to reach 100% renewable 
energy consumption in our direct 
operations and manufacturing processes. The target 
is to achieve zero Scope 1+2 GHG emissions by 2025 
and zero Scope 3 emissions by 2030. In 2021 we 
made significant progress towards these goals, and 
will continue the effort according to our ESG key 
targets for 2022, as disclosed in the first section of 
the ESG report.

For Nordic Semiconductor, increasing renewable 
energy usage and reducing GHG emissions in direct 
operations and manufacturing processes are crucial 
to mitigate climate change. We also see a growing 
demand from our customers for reporting our status 
on energy consumption and GHG emissions, and 
setting  targets for GHG emissions reduction.

Nordic Semiconductor has monitored annual 
GHG emissions since 2011, and reports annually 
to the Carbon Disclosure Project’s Climate 
Change questionnaire (www.cdp.net), detailing 
how climate change risks and opportunities are 
managed, as well as GHG accounting results. 
Overall, climate change represents low risk 
for Nordic Semiconductor’s direct operations. 

However, our supply chain faces stronger risks and 
challenges, both in the form of carbon taxation or 
other legislative requirements, but also drought, 
storms or typhoons and floods, depending on 
manufacturing location.

Nordic Semiconductor’s approach for measuring 
greenhouse gas emissions follows the Greenhouse 
Gas Protocol (ghgprotocol.org). We report GHG 
emissions on all three scopes, namely Scope 1 
(direct GHG emissions), Scope 2 (GHG emissions 
from purchased electricity, heating or cooling), and 
Scope 3 (all other indirect GHG emissions, including 
our supply chain), and use the financial control 
approach outlined in the GHG Protocol Corporate 
Standard for consolidating the emissions.

Scope 1 GHG emissions
Scope 1 GHG emissions are calculated using 
emission factors published by US Environmental 
Protection Agency (EPA) and based on IPCC 4th 
Assessment Report (AR4) GWP100 values. Due to 
Nordic's fabless structure and very limited company 
owned and controlled GHG sources, Scope 1 
GHG emissions are minor and generated only in 
abnormal situations, e.g. associated with refrigerant 
leakage from the company's test laboratory 
cooling system. In 2021 our Scope 1 GHG emissions 
were zero.

Scope 2 GHG emissions
Our Scope 2 GHG emissions include emissions from 
purchased electricity and heating. The emissions 
are calculated based on average energy generation 
emission factors for defined locations obtained from 
UN 2021 and IPCC 2006, or from energy provider 
when applicable. Small offices with less than 10 
employees are excluded from our Scope 2 GHG 
emissions reporting.

Since 2015, Nordic has steadily increased the 
renewable energy usage in it's direct operations. In 
2020 Nordic started to put more focus on climate-
friendly energy sources, and initiated our Renewable 
Energy Program. As a result of this program, our 
head office in Trondheim switched to renewable 
energy (verified by Guarantees of origin (GOO)) 
in 2020, and in 2021 we made further progress 
by purchasing International Renewable Energy 
Certificates (I-RECs) for our offices in Hong Kong, 
Philippines, and Taiwan.

In 2021, our Scope 2 GHG emissions has increased 
by 22% compared to 2020. This is due to the new 
office expansions in the UK and India as well as 
increased reliability testing in our lab facilities in 
Taiwan with the purchased energy originated from 
non-renewable sources. In 2021, our purchased 
I-RECs reduced our Scope 2 emissions by 267 tonnes 
CO2e, and in total the renewable energy ratio was 
75.3% for our offices. Our target for 2022 is to also 
obtain I-RECs for the complete Taiwan lab and 
office operations, which will bring the renewable 
energy ratio to above 90%. 

115

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | ENVIRONMENTAL PERSPECTIVESIndicator

Year-on-Year 
change

2021

2020

2019

Nordic Semiconductor offices energy use (MWh)

34.2%

4	269.26

3	180.19

2	294.28

Nordic Semiconductor offices energy use per area 
(MWh/m2)

Nordic Semiconductor offices energy use per full 
time employee (MWh/FTE)

Nordic Semiconductor offices energy use per 
revenue (MWh/USD million)

Scope 1+2 GHG emissions per full time employee 
(tons CO2e/FTE)

Scope 1+2 GHG emissions per area (tons CO2e/
m2)

0.6%

-9.3%

-10.9%

-17.7%

-8.8%

0.16

3.63

6.99

0.35

0.02

0.16

4.01

7.85

0.42

0.02

0.13

3.40

7.93

1.00

0.04

Nordic offices' energy use and intensity ratios for energy use and Scope 1+2 GHG emissions.

Scope 2 location based and market based GHG 
emissions 

Scope 1 + 2 GHG emissions by site and revenue

Energy efficiency and increasing the use 
of renewable energy are crucial to Nordic 
Semiconductor's progress towards carbon neutrality 
targets. From 2020 to 2021, the energy usage in our 
offices has grown by 34.2%. This is mainly due to 
the acquisition of the Wi-Fi technology group that 
includes setting up new offices in the UK, India, and 
Sweden, as well as increased reliability testing in our 
lab in Taiwan. In 2021, 75% of all purchased energy 
for direct operations originated from renewable 
energy sources. In addition to procured energy, our 
largest office in Trondheim has onsite electricity 
production with solar panels amounting to 30 
MWh annually.

As of today, four of our offices, comprising 59% 
of our office area, have achieved green building 
certification. This includes the Leadership in Energy 
and Environmental Design (LEED) and the Building 
Research Establishment Environmental Assessment 
Method (BREEAM). The certification encourages the 
provisions of energy and resource efficient solutions 
for the buildings. With the certification it is ensured  
that buildings are built and operated in a way that 
reduces the need for electricity, water and heating 
consumption, which in turn helps to reduce Nordic's 
offices energy consumption in those buildings.

Scope 2 energy consumption by type and revenue

Scope 2 energy consumption by source. In 2021, 
the introduction of I-RECs contributed by 9% to our 
renewable energy share.

116

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | ENVIRONMENTAL PERSPECTIVESScope 3 GHG emissions
Scope 3 GHG emissions are mainly related to 
our production volume and our subcontractors’ 
capacity utilization which will fluctuate beyond our 
control. Production facilities may need to operate 
machinery and infrastructure, even in the event 
of low production, leading to greater emission 
per production unit. For calculating production 
emissions, we use emission factors provided by 
our suppliers. Data from suppliers is typically 
received as an average of their total emission by 
total production volumes and does not calculate 
for differences in the production unit (no. of wafer 
layers, size, and complexity of components). This 
leads to some uncertainties in the reported Scope 3 
figures. 

Suppliers reporting emissions from production takes 
place in Q2 of the calendar year, therefore data 
from 2021 is not included in this report. Estimates 
for 2021 have been made based on 2020 values 
for emission factors and our records of production 
volumes in 2021. In 2020, 99,5% of our total Scope 3 
GHG emissions came from production.

Scope 3 GHG emissions related to production. Data is 
gathered annually from subcontractors when they have 
completed 3rd party verification in Q2. Emissions for 2021 
are estimates.

Due to the Covid-19 pandemic, business travel was 
limited in 2021, resulting in 5% decrease in business 
travel compared to 2020.

Scope 3 GHG emission related to business travel, 
upstream transport and downstream transport. Emissions 
in 2021 related to upstream transport and downstream 
transport are estimates.

Applying the lean concept to the entire business 
structure, Nordic Semiconductor delivers its 
products to its customers through distribution 
partners. The “drop- shipment” method from 
the manufacturers’ warehouses directly to our 
distributors’ premises enables efficient delivery and 
more direct transportation routes which leads to less 
GHG emission.

Nordic Semiconductor is partnering with multiple 
key customers who share our vision to work towards 
greener products. With a target to reach 100% 
renewable energy usage in the production of 
Nordic's products by 2030, we are working with our 
manufacturing partners to gradually reduce GHG 
emissions by increasing the ratio of renewable 
energy and exploring other environmental 
instruments such as renewable energy certificates or 
carbon offsets in the manufacturing processes.

Environmental product compliance and 
Hazardous substances

Nordic Semiconductor’s products 
are subject to several environmental 
compliance requirements from 
regulations, industry standards, 
customer requirements, and Nordic’s own 
initiatives. While the managerial responsibility for 
environmental compliance lies with the company’s 
Quality and Sustainability SVP, the Supply Chain 
manages Hazardous Substances compliance 
and is responsible for assuring that our products 
follow defined environmental requirements 
and specifications in close collaboration with 
manufacturing suppliers.

Environmental product compliance and hazardous 
substance use are regularly addressed with Nordic 
Semiconductor’s manufacturing partners and 
communicated through Nordic Semiconductor’s 
Hazardous Substances Specification for Suppliers. 
As a confirmation of compliance with the 
requirements stated in the Hazardous Substances 
Specification, manufacturing partners are required 
to provide Nordic Semiconductor with signed 
Supplier Declaration of Conformity for each revision 
of the Specification.

To verify product content, hazardous substances 
testing is carried out by a third party. To ensure 
transparency, certificates for Hazardous Substances 
testing and Material Composition reports for all 
products are published on Nordic Semiconductor’s 
website (www.nordicsemi.com).

In 2021 there were no findings of prohibited 
substances above limitations, or any other 
environmental product compliance incidents in any 
Nordic Semiconductor products.

117

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | ENVIRONMENTAL PERSPECTIVESNordic Semiconductor has controls in place 
for design and production processes to ensure 
compliance to environmental requirements, such as:

■  RoHS (Restriction of use of Hazardous Substances)

■  REACH  (Registration,  Evaluation,  Authorization  and 

Restriction of Chemicals) 

■  EU POPs regulation (Persistent Organic Pollutants)

■  Halogen-Free, according to IEC 61249-2-21

Being a fabless semiconductor company, close 
communication, and cooperation with the 
manufacturing partners of our products are crucial 
to managing hazardous substances.

Resource reduction

The company strives to make products 
as environmentally friendly as possible 
through environmentally conscious 
product design and manufacturing, by 
conserving natural resources and raw materials, 
avoiding hazardous substances, preferring 
recyclable material, and ensuring products are easy 
to recycle at the end of life.

Eco Design
Nordic Semiconductor’s strategic target for eco 
design is the reduction of environmental impact 
throughout the life cycle of Nordic’s products. 
Analysis of a product’s potential impact on the 
environment is done from the very beginning of the 
design phase for new products or product types. 
While designing to introduce additional functionality 
or use cases, targets are defined to improve energy 
efficiency, reduce materials consumption, and 
ensure minimal environmental harm throughout 
all life cycle phases. Scarcity of natural resources 
and conservation of raw materials are considered 
important from both an environmental and financial 
perspective. By identifying substitute alternatives, 
such as copper for gold in almost all products, 
Nordic Semiconductor has been able to reduce 
costs and environmental impact without sacrificing 
quality or performance.

Product content is managed in Nordic’s design 
phases at specific milestones to prevent hazardous 
substances from being included. This is based on 
applicable regulations, customer requirements, 
and Nordic Semiconductor’s commitments. These 
controls are prerequisites for product milestone 
approval prior to transferring into production.

We continuously search for ways to reduce 
raw material consumption and find sustainable 
alternatives for our products to improve circularity. 
Our initiative, started in 2020, focuses on reducing 
the environmental impact by replacing the rubber 
enclosure of new prototyping platforms with 
recyclable plastics. Nordic Semiconductor recognizes 
that material recycling is one of the key issues in 
conserving natural resources, which will become 
more prevalent in the future.

Besides product design, Nordic focuses on 
reducing the impact on the environment through 
product packaging. In 2020 Nordic introduced 
the requirement for all the kits to have packaging 
made of Forest Stewardship Council (FSC) certified, 
recyclable cardboard material. At the end of 2021, 
61% of the development kit categories have FSC 
certified packaging material, compared to 33% 
in 2020.

Plastic reduction program
In 2021 Nordic established a program for plastic 
reduction, as a target to reduce plastic raw 
material consumption and increase material 
reuse and recycling. The plan is to work with our 
manufacturing suppliers by gradually increasing 
the ratio of recycled plastic used in our device 
containers, with a key target to reach 5%  coverage 
within 2022, and 90% coverage within 2024.

Green procurement
Compliance to environmental requirements is 
considered when choosing manufacturers as part 
of initial supplier assessment and related audits. To 
verify green procurement for our products, Nordic 
requires manufacturing suppliers to comply with the 
requirements stated in the Hazardous Substances 
Specification for suppliers, and requires signed  
Declaration of Conformity (DoC) from the suppliers 
as an evidence for compliance.

In addition to the closely monitored production 
process and engagement with our subcontractors, 
Nordic Semiconductor has implemented 
procurement guidelines for purchases of products 
and services not directly related to the production of 
our products. This includes evaluating and choosing 
suppliers, such as suppliers of office material, based 
on their ethical and environmental profile.

118

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | ENVIRONMENTAL PERSPECTIVESCategory

Target 2022

Percentage of prototyping platforms 
with recyclable plastic enclosure1

Percentage of development kit with 
cardboard packaging material

Percentage of development kit with 
FSC certified cardboard packaging 
material

Percentage of device containers with 
recycled plastic2

80%

100%

70%

5%

2021

0%

100%

61%

0%

2020

0%

100%

33%

0%

Measurements and targets related to eco design. 

¹The initiative was started in 2020, and the production was not yet started in 2021. The target 2022 is based on volume forecast. 

²The plastic reduction program was started in 2021. No data for 2021 or 2021 available.

Product end-of-life treatment
The environmental impact from a product’s end-
of-life, whether it is recycled, incinerated, or ends 
up in a landfill, is to a large degree dependent on 
the product’s content. Nordic's products can be 
incorporated as components in countless different 
end-products and applications. The obligations for 
product end-of-life treatment lies with the producer 
of the finished product. As Nordic products are only 
used for manufacturing of finished products, end-
of-life treatment is not considered a material topic 
for us. 

Water 
Nordic Semiconductor reports annually to Carbon 
Disclosure Project's Water questionnaire. Due 
to the fabless structure of the company with no 
production facilities and the location of its offices 
in low water-risk areas, wastewater and water 
scarcity are low risks for Nordic Semiconductor 
directly. However, water scarcity is a factor for 
some of our subcontractors, specifically related 
to limited production capacity due to drought, or 
failure to comply with local legislative requirements. 
These are assessed as part of overall company risk 
management and business continuity planning.

Water consumption in our operation is limited to 
overhead water usage (cleaning, drinking, washing) 
for our offices and laboratory operations. All 
water used/consumed by the company is supplied 
from municipalities. The total amount has been 
5397 m3  for all Nordic offices in 2021. Small 
offices with less than 10 employees are excluded 
from this calculation.

Waste management and recycling
Nordic Semiconductor's waste related impacts 
are mainly related to company's direct operations 
and outsourced product manufacturing. We work 
systematically to monitor and minimize waste and 
its impact on the environment, and prefer use of 
recycled and recyclable materials where feasible. 
We work continuously with our suppliers to maximize 
our yields, and thus to minimize the number of 
devices that need to be disposed of. Scrapped 
electronic components from production are sorted 
and recycled according to local waste management 
regulations and the WEEE Directive. Supplier audits 
have been performed at our manufacturing partners 
to verify that waste management is performed 
according to Nordic Semiconductor’s standards.

Nordic Semiconductor has implemented routines 
for sorting and disposing of different types of 
waste from offices and warehouses in a responsible 
manner. The main focus is on EE-waste and 
hazardous waste such as chemical components 
from laboratories, and paper and packing material. 
Recycling of EE-waste allows for re-use of metals, 
such as copper, from waste or damaged products. 
The waste generated in Nordic’s direct operations is 
managed by certified waste handling and recycling 
companies, and we have assessment mechanisms in 
place to ensure these companies meet all applicable 
local environmental laws and regulations to manage 
the waste responsibly with minimal impact on 
the environment.

To reduce waste in our offices, Nordic 
Semiconductor encourages re-use of materials 
where applicable. Usable IT-equipment and furniture 
are donated to schools or volunteer organizations 
rather than being scrapped, and internal auctions 
are held to let interested employees purchase 
outdated lab equipment. For office purchases, the 
company has implemented green procurement 
guidelines to ensure that environmentally friendly 
alternatives are preferred and goods made from 
recycled material are selected wherever feasible.

119

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | ENVIRONMENTAL PERSPECTIVESAir pollution
Nordic Semiconductor’s environmental policy 
includes a commitment to minimize and reduce 
air pollution, such as ozone depleting substances, 
dust, particles, or other polluting agents, in 
addition to the previously described greenhouse 
gases (GHG). As Nordic Semiconductor is a fabless 
company, the relevant sources of air emission 
are in outsourced manufacturing processes for 
wafer production, assembly and testing, and 
hence the risks in relation to direct operations are 
considered low.

Nordic Semiconductor communicates air emission 
restrictions to its supply chain, e.g. restricting use 
of ozone-depleting substances and Persistent 
Organic Pollutants in line with applicable legislation. 
Manufacturing partners are annually signing off 
an adherence to these requirements, and supplier 
audits are performed to ensure that suppliers 
at minimum comply with any local air emission 
requirements and permits.

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | ENVIRONMENTAL PERSPECTIVESMeasurements

Indicator

Environmental management

Target 
value

Target 
year

Year-
on-Year 
change

2021

2020

2019

Number of environmental incidents

0

2022

0

0

0

Suppliers with documented environmental policy

100 %

2022

100%

100%

100%

Percentage of new suppliers that were screened using 
environmental criteria

100%

2022

100%

100%

100%

Renewable energy purchase ratio offices (%)

100 %

2025

Hazardous waste - chemicals and batteries (tons)

EE-waste in production line (tons)1

GHG emissions

-1.7%

8.2%

75.3%

77.0%

44.4%

0.053

0.049

2.6

2.6

2.5

Scope 1 GHG emissions (tons CO2e)

0

2025 -100.0%

0

3.922

0.744

Scope 2 location based GHG emissions (tons CO2e)

30.7%

1 674.3

1 281.4

1 007.2

Scope 2 marked based GHG emissions (tons CO2e)

0

2025

23.2%

406.0

329.6

671.2

Scope 2 GHG emissions reduced as a result of reduction 
initiatives (tons CO2e)2

Scope 2 GHG emissions reductions from offsets (tons 
CO2e)3

Scope 1+2 GHG emissions per revenue (tons CO2e/
USDm)

974.9

723.7

11.4

431.9

173.5

0

-19.2%

0.665

0.823

2.323

Scope 3 production related GHG emissions (tons CO2e)4

0

2030

56 451.8

58 448.8 49 927.9

Scope 3 GHG emissions (tons CO2e)4

Scope 3 GHG emissions reduced as a result of reduction 
initiatives (tons CO2e)5

Scope 3 GHG emissions per revenue (tons CO2e/
USDm)4

56 742.8

58 752.0 51 446.4

13 893.4

0

0

92.9

145

177.88

CDP score Climate Change [Industry average]

B [B-]

A- [C]

C [C]

CDP score Supplier Engagement Rating [Industry 
average]

Measurements related to Environmental performance. 

A- [B-]

A- [B-]

B [C]

Note that several environmental measurements are ready at end of Q2 due to the reporting schedules of external stakeholders. 
Therefore, some of the reported numerical values are tied to uncertainties at the time of publishing this ESG report.

¹ EE-waste in production line: data for 2021 is an estimation.

2 Reduction initiatives include purchased renewable energy (backed by GOO) and I-RECs for Nordic operations. 2019 has been set as 
a base year for Scope 2 GHG emission reduction calculations. Nordic started a renewable energy program in 2020, with the aim to 
gradually increase the share of renewable energy in our operations and reach zero GHG emission target by 2025.

3 Offsets include I-RECs for the Hong Kong, Philippines, and Taiwan offices. In addition, as the purchased renewable energy backed 
by the Guarantee of Origin (GOO) certificate in our head office in Trondheim is more than the energy consumed in that office, part 
of the excess renewable energy is used to offset non-renewable energy usage in the European offices.

4 Scope 3 GHG emission data for 2021 are estimations due to the external stakeholders reporting taking place at the end of Q2.

5 Reduction initiatives include purchased renewable energy (backed by I-RECs) for Nordic subcontractor's manufacturing sites. 2020 
has been set as a base year for Scope 3 GHG emission reduction calculations. This reduction initiative includes only offsets.

121

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | ENVIRONMENTAL PERSPECTIVES 
SOCIAL PERSPECTIVES

122

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | SOCIAL PERSPECTIVESSocial perspectives

Nordic Semiconductor is a growing business with offices, employees, 
and suppliers in different parts of the world. We are proud of our diverse 
workforce. Focusing on diversity and inclusion throughout the entire 
employee journey is imperative to attract and retain highly skilled and 
loyal personnel. Equally important is the company's ambition to foster an 
inclusive, safe, and motivating working environment for our employees. It is 
important for Nordic Semiconductor to ensure that we are not in any way 
participating in human rights violations or labor rights violations.  

Human Rights and Labor Rights

Nordic Semiconductor is committed 
to respect and support Human Rights 
and Workers’ rights, as reflected in 
our CSR policy, the support for UN 

Global Compact Principles and membership to 
RBA. Nordic Semiconductor shall uphold and 
protect internationally proclaimed human rights 
and workers’ rights and treat workers with dignity 
and respect as understood by the international 
community. It is our goal that no form of human 
rights abuses or labor issues, including forced labor, 
human trafficking or any form of modern slavery, 
shall occur at any stage of our operation, including 
the manufacturing of Nordic Semiconductor 
products by subcontractors. Our policies and 
commitments are approved by the Board and the 
Executive Management Team. Nordic Semiconductor 
adheres to the principle that all employment shall 
be freely chosen and that workers shall be free to 
leave their employment with reasonable notice. 
Child labor must not be used at any stage of 
manufacturing, and working hours and wages shall 
comply with applicable local laws or RBA Code of 
Conduct paragraphs (whichever is stricter).

As a fabless company, Nordic Semiconductor 
relies on third parties to manufacture, assemble, 
and to a large extent, test our products. Our 
direct exposure to issues related to child labor, 
forced labor, or human trafficking is therefore 
limited in our direct operations. Due to this, our 
focus related to addressing human rights and 
labor risks are directed to engagement with our 
supply chain. Nordic Semiconductor requires all 
tier 1 manufacturing partners to formally sign 
an agreement to comply with the RBA Code of 
Conduct, and that they shall also require the same 
from their suppliers, hence making the standards 
of the RBA Code of Conduct applicable to Nordic 
Semiconductor’s second-tier suppliers.

As of today, all our direct suppliers have their own 
documented corporate social responsibility policy 
including adherence to RBA Code of Conduct, 
with commitment to communicate this to next tier 
suppliers. Currently, seven of our manufacturing 
partners have their own memberships in RBA. 

Supplier audits are used to review implementation 
of the RBA ode of Conduct, such as tracing of 
information for conflict mineral reports, inspecting 
Human Rights and Labor performance, and 
follow-up of next tier suppliers. Our suppliers are 
evaluated both in the supplier qualification process 
and through annual screening in accordance with 
RBA code of conduct requirements where Human 
rights and Labor rights are important fundamental 
requirements. The screening is done through RBA 4 
step Risk assessment model. (for more information, 
see page 107 of this report )All of our manufacturing 
partners are certified to ISO 45001. 

Regulations are monitored closely for any labor 
issues that can potentially affect our business.  Such 
issues from tier 1 up to raw material suppliers, are 
taken seriously with our manufacturing partners. 
Actions to remove the non-compliance are 
agreed mutually and followed-up in cooperation 
with the suppliers.

Raising employee awareness on Human Rights and 
Labor principles is accomplished through internal 
training and as part of the introduction program 
for new employees. Measurements and results are 
reviewed annually by the Executive Management 
Team in the Management Review. 

123

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | SOCIAL PERSPECTIVESResponsible sourcing of minerals
Nordic Semiconductor has worked with the issue 
of Conflict Minerals since 2010 and engages 
regularly with our suppliers to provide accurate and 
transparent information on the origin of minerals 

to concerned stakeholders. The company’s SVP of 
Quality and Sustainability is responsible for the 
Conflict Minerals program. Our Conflict Minerals 
Policy is stated on our website and has been 
communicated to all relevant suppliers. 

Nordic Semiconductor’s Conflict Minerals Policy
The eastern part of the Democratic Republic of the Congo (DRC) has long been the site of one of the world’s 
worst humanitarian crises, and the conflict there continues.

Conflict minerals are defined as the metals Tantalum, Tin, Tungsten, and Gold (3TG), which are the derivatives 
of the minerals cassiterite, columbite-tantalite, and wolframite, respectively, and regardless of whether or not 
these minerals finance conflict in the Democratic Republic of the Congo (DRC) or adjoining countries.

As part of Nordic Semiconductor’s commitment to social responsibility and compliance to the Responsible 
Business Alliance (RBA) Code of Conduct, it is our policy to only have part in trade where the respect for 
human rights is upheld, and where trade is not contributing to violent conflicts. It is our goal that our products 
and our supply chain shall be “conflict free”, i.e. free of materials that directly or indirectly finance or benefit 
armed entities. In support of this policy, Nordic Semiconductor commits to the following:

■  Exercise due diligence with relevant suppliers consistent with the OECD Due Diligence Guidance for Responsible 
Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and encourage our suppliers to do likewise 
with their suppliers.

■  Work with our suppliers to enable products that are conflict-free.

■  Provide due diligence information to confirm the conflict free status of relevant material in our supply chain.

■  Transparently implement this policy by making available reports on our progress to relevant stakeholders and the 

public.

Nordic Semiconductor has a commitment to source 
minerals only from conflict free smelters, within 
the DRC and covered countries. Identification of 
smelters, and assessment of country of origin of 
the minerals, are investigated based on the supply 
chain reporting scheme set out by the Responsible 
Minerals Initiative (RMI), an initiative by RBA and the 
Global e-Sustainability Initiative (GeSI). As Nordic 
Semiconductor’s products can contain 3TG (Tin, 
Tungsten, Tantalum, and Gold) and Cobalt, due 
diligence is conducted based on OECD guidelines 
to ensure no direct or indirect financing of ongoing 
conflicts in the DRC region or elsewhere under 
the category called “Conflict-Affected and High-
Risk Areas”. 

All of Nordic's suppliers are required to adhere 
to RBA Code of Conduct and its provisions on 
conflict minerals. 80% of Nordic's suppliers are RMI 
members, and only smelters that are verified as 
RMI compliant by RMI’s audit scheme are accepted 
in our supply chain. All the smelter information 
received from the suppliers is validated against 
RMI's conformant smelter list. 

Our target is to use only 100% conflict-free smelters, 
and we report at the smelter/refinery level to 
customers and other stakeholders on a weekly basis 
through RMI’s Conflict Minerals Reporting Template, 
which has become industry standard. The reporting 
contains information on smelters compliance status, 
mine locations, and Nordic’s management on 
Conflict Minerals issues.

Nordic Semiconductor is not required to report to 
the US SEC for Conflict Minerals.

To reasonably ensure conflict-free supply chains, 
suppliers are required to commit to adopting 
policies and due diligence measures, and to 
require their suppliers to adopt similar policies and 
measures. This is ensure by supplied signed letter of 
commitment to RBA code of conducts.

The company does not purchase minerals from 
mining companies, nor does it maintain direct 
contact with smelters or providers of material. All 
such contact is handled through our subcontractors’ 
supply chain, and as such, Nordic Semiconductor 
needs to rely on 3rd party auditing such as RMI’s 
audit program. In 2021 Nordic became a member of 
RBA and RMI, which has given us better access to 
resources  for transparent information regarding the 
smelter's status and tools for better due diligence 
measures towards our supply chain.

124

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | SOCIAL PERSPECTIVESIn the event of changes to smelter list or smelters’ 
compliance status, these changes are investigated 
and handled by company routines for managing 
non-conformities and corrective actions. Corrective 
actions can include requiring suppliers to stop using 
a non-conformant smelter, changing raw material 
of suppliers, as well as conducting training and 
education in the Supply Chain in cooperation with 
the relevant suppliers. Ongoing initiatives to reduce 
the use of gold in finished products by replacing it 
with copper where applicable, help minimize the risk 
of indirectly financing or benefiting armed groups in 
conflict areas.

To date, no incidents of minerals supporting armed 
conflicts have been discovered. For 2022 we expect 
Conflict Minerals to remain a highly relevant issue 
related to Human Rights in our supply chain, and 
will continue to engage our suppliers to precisely 
identify the origin of all material used in Nordic 
Semiconductor’s products.

Working hours
Nordic is committed to employees well-being 
and work-life balance. Working hours, wages, 
and working conditions shall comply with the 
applicable local laws and/or RBA Code of Conduct 
paragraphs, as a minimum. This includes regulations 
for rest periods, night work, holiday, and salary. 
All employment contracts include a paragraph 
describing local working hours for Nordic to clearly 
communicate expectations and ensure that we 
adhere to local laws and regulations. In 2021 Nordic 
implemented new employee and management 
handbooks for employees where working hours and 
other employment related matters were updated 
and made available by country. 

Nordic’s suppliers are required to adhere to the RBA 
Code of Conduct, setting requirements for working 
hours, working conditions, and wages and benefits 
for their operations. Suppliers’ adherence to RBA 
Code of Conduct are addressed in supplier audits 
and self-assessment surveys.

Collective bargaining
Collective bargaining and the right to organize 
and join labor unions are protected by law in most 
countries where Nordic Semiconductor operates. 
Our company policies, which also applies to all 
Nordic Semiconductor ASA’s subsidiaries and 
office locations, encourage employees to exercise 
these rights.

Nordic welcomes the opportunity to cooperate with 
any trade union and actively encourage employee 
representation.

Collective bargaining and the right to organize 
are also requirements our suppliers are obliged to 
adhere to through their commitment to RBA Code 
of Conduct.

Non-Discrimination/ Non-Harassment
Nordic Semiconductor does not tolerate harsh or 
inhumane treatment of workers, including any sexual 
harassment, sexual abuse, corporal punishment, 
mental or physical coercion, or verbal abuse.

Nordic Semiconductor has implemented a Non-
Discrimination Policy to clearly state that employees 
have the rights not to be harassed or discriminated. 
This is communicated to all employees through the 
employee handbooks, and also presented as a part 
of initial onboarding of new employees. 

Employees are encouraged to report any signs of 
potential discrimination or other ethical misconduct 
through the company’s whistleblower channel. 
See more about our whistleblower channel in the 
Governance Perspective chapter of this report. 
Regular employee satisfaction surveys and 
appraisal reviews also includes questions regarding 
discrimination to detect and address potential 
discrimination issues. 

Nordic Semiconductor’s Non-Discrimination Policy
■  All Nordic Semiconductor employees shall be treated equally and with dignity, courtesy, and respect

■  Nordic Semiconductor prohibits any form of discrimination against and/or harassment of employees or applicants 
for employment due to race, color, nationality or ethnic origin, age, religion, disability, political opinions, gender, or 
sexual orientation, as described by ILO conventions. 

■  Nordic Semiconductor’s organizational culture shall be characterized by openness and good internal 
communication so that any misconduct or problems can be addressed, discussed, and resolved in a 
timely manner.

■  Nordic Semiconductor’s employees are encouraged to report any incident of discrimination to their nearest 

leader or through the applicable whistle-blower channels. Retaliation against any employee who has reported 
misconduct, is prohibited. There shall be no unfavorable treatment to any whistle blowers.

125

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | SOCIAL PERSPECTIVESEqual pay
Nordic strives to ensure that work of equal value 
shall receive equal pay. Salary levels are determined 
based on objective measures, such as work 
performance, responsibility, seniority, education, and 
experience, in addition to local market expectations.

Nordic Semiconductor’s Board has appointed a 
designated People and Compensation Committee 
(PCC) to evaluate and oversee the organization’s 
overall compensation strategies. The Committee is 
composed of shareholder- and employee elected 
Board members as well as members from the 
company’s Executive Management Team. 

Nordic established a Total Rewards Manager 
role in 2021 to ensure fair, competitive and 
aligned development of the company's global 
rewards strategy. Furthermore, all employees 
were encouraged to participate in a survey in 
2021 to reveal internal satisfaction related to 
overall remuneration and benefits. The survey was 
representative with a participation rate of 87% 
confirming a high overall employee satisfaction 
score, with the majority of employees also being 
satisfied with Nordic's total rewards package.

To continuously develop employee competence 
and ensure that all employees advance according 
to personal and professional career goals, a 
standardized framework to determine and adjust 
salary levels have been implemented, the career 
ladder. Employees are expected to advance through 
the career ladder, where salary levels are adjusted 
according to position and related responsibilities. 
Salary increases are initiated through a globally 
aligned salary review process.

Category

Overall (excl EMT)

Executive Management Team (EMT)

Administration and business support

Research and development

Sales

Supply Chain

Gender Pay Ratio statistics for 2021, by Category

Nordic rewards employee contributions that 
foster profitable and sustainable company 
growth. Market-aligned incentive programs were 
implemented in 2021 to ensure fair, competitive, and 
equal pay. All permanent employees are eligible to 
participate in the company's short- as well as long-
term incentive programs.

The following table explains the 2021 gender ratio 
statistics for Nordic. Within the R&D department 
in Norway, the median salary in 2021 for women 
was 90% of the median salary for males. The 
global median salary for female employees in 
all departments was 80%, excluding executive 
management. Within the executive management, 
the median salary for female employees was 83%. 
The salary gap between women and men is largely 
caused by a majority of men in senior positions. 

Furthermore, gender differences in salary vary by 
department and location. As an example, many 
of the women in administrative functions within 
supply chain are based in the Philippines, where 
salary levels are below the Group median. In sales, 
most women are in non-customer facing roles, 
where total compensation is lower than in customer 
facing roles. 

Males Females

1021

166

8

26

839

113

43

2

28

86

23

29

Gender Pay Ratio  
(Median female salary / 
Median male salary)

80%

83%

72%

90%

53%

32%

126

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | SOCIAL PERSPECTIVESDiversity and inclusion
Nordic Semiconductor considers a diverse workforce 
a competitive advantage for fostering innovation, 
ensuring an inclusive and respectful working 
environment. Diversity in terms of employee 
age, gender, and cultural background, but also 
educational background, experience, and personal 
preferences represents an opportunity for the 
company to attract, develop, and retain valuable 
specialized competencies in a highly competitive 
industry. Nordic Semiconductor’s People and 
Compensation Committee (PCC), together with 
the Executive Management and the Board, works 
actively to enhance diversity, focusing on human 
capital development and company culture to ensure 
inclusion and belonging.

Cultural diversity
Today, Nordic Semiconductor’s business is 
composed of a culturally diverse and highly 
specialized workforce where technical competence, 
industry experience, and market understanding 
are the common denominators. With 44 different 
nationalities represented at the company’s 
headquarters and 56 nationalities world wide, 
Nordic has a unique position for fostering an 
inclusive and diverse culture were different 
perspectives are valued, and mutual respect is a 
matter of course.

In Norway 53% of employees have relocated from 
abroad, Nordic uses a third-party vendor providing 
onboarding services to ensure efficient and 
professional integration to the workplace, as well 
as local society and culture. The services provided 
are tailored to the various steps of the recruitment 
and onboarding process, and employees are 
offered housing services, language courses, 
assistance to navigate governmental agencies, and 
networking arenas.

Phase of life policy
Nordic Semiconductor aspires to be a healthy 
and attractive workplace for employees in all age 
groups and during all phases of life across the 
globe. We have implemented a Phase of Life Policy, 
aiming to facilitate employee development and 
knowledge growth throughout the entire employee 
journey. Each phase is based on a perception that 
employees might have different needs and priorities 
throughout various stages of their lives. As an 
employer, we have an ambition to accommodate 
according to personal needs and requirements of 
our employees.

The phase of life policy was implemented in Norway 
at an early stage, and further expanded to include 
several countries during 2020 and 2021. The global 
implementation process will continue in 2022.

Gender diversity
Nordic has an ambition to minimize the 
gender gap and supersede the industry 
benchmark. Considering that tech is 

continuously changing our lives, female perspectives 
as well as participation is important to drive that 
development in a sustainable direction. In order to 
increase the proportion of women in our workforce, 
we are engaged in several initiatives:

■  The women’s network Ada, which is an initiative 

driven by the Norwegian University of Science and 
Technology to recruit, motivate, and educate women 
within the Norwegian IT industry

■  Women's Directory, a Global Semiconductor 
Alliance initiative targeted at women in the 
semiconductor industry

■  Ensuring female participation at trade fairs, 

recruitment initiatives, advertising campaigns, and 
employer branding related external communication

■ 

Increased awareness of objectivity in recruitment 
processes through standardizing global 
recruitment practices.

When looking at the numbers of female hires for 2021 we see that our efforts are indicating steady progress, 
see table below. 

. Category

Number of female employees in the company

Percentage of female employees in the company

Increase of female employees in percentage

Number of total hires

2021

168

14.0%

22.6%

270

2020

135

13.8%

28.0%

153

2019

107

14.0%

20.2%

141

2018

89

13.0%

15.6%

121

2017

77

13.0%

13.2%

78

Total headcount increase percentage

22.4%

28.7%

12.0%

14.0%

12.8%

Number of female hires

Female hires in percentage

50

20

23

18

11

18.5%

13.0%

16.3%

14.9%

14.1%

Employees growth with regards to gender diversity

127

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | SOCIAL PERSPECTIVESHuman Capital development
Recruitment
With Nordic’s ambition to be a world-leading 
provider of a wide range of IoT solutions, highly 
specialized human capital needs to be recruited. 
Nordic Semiconductor has an ambitious growth 
strategy, and organic recruitment levels were stable 
with a global outreach throughout 2021 despite 
the ongoing pandemic. The acquisition from 
Imagination Technologies in early 2021 introduced 
new opportunities for an even more global search 
for talent, with three new office locations and 
growth in both competence and headcount, with 81 
new colleagues onboarded.

Our recruitment strategy is a core component of our 
growth strategy, which during 2021 also required 
targeted recruitment in several competence areas. 
The company's  focus on diversity is high on the 
agenda and a priority in all recruitment processes.

During 2021 we strengthened the recruitment 
support for hiring managers to ensure professional 
execution of our recruitment processes globally. 
As Nordic sources from a global talent pool, 
we also further developed our processes and 
practices to mitigate company risk during 2021. This 
included taking precautionary measures according 
to the Norwegian national threat assessments 
and their general advice on when to conduct 
background checks. 

■  22.4% increase in total headcount

■  67.5% of new hires located outside of Norway 
– Addressing company growth strategy in a 
challenging marketplace for talent

■  18.5% of new hires re-located to Norway 

– Inclusive onboarding and introduction program to 
ensure integration to Nordic Semiconductor's culture 
and local communities

Employee development and retention
As a part of our employee journey and to ensure 
talent retention, we conduct regular appraisal 
conversations between the employee and the 
manager.The main purpose of the dialogue is to 
foster employee involvement and engagement, 
drive performance and employee development, and 
ensure employee well-being. This is an important 
tool for clarifying goals and expectations, as well 
as a means of giving structured feedback between 
employee and manager. The intention is to enhance 
the employee-leader relationship and give both 
parties the opportunity to take a proactive role in 
setting objectives as a part of an open and honest 
dialogue. In 2021, 88% of employees completed 
annual appraisal conversations. 

Identifying and selecting qualified successor 
candidates for our Executive Management 
Team and other critical positions has been an 
ongoing process during 2021. It is imperative for 
the company to have a structured process for 
succession planning, with our HCM system as the 
backbone. Succession planning is regarded as a 
continuous process.

Our aspiration is that our Employer Value 
Proposition (EVP) offer competitive benefits, 
including competitive salary, insurances, pension 
schemes, etc. During 2021 we created a framework 
where our EVP is clearly communicated, aiming 
to remind existing employees of our company 
benefits, but also to be used when attracting 
potential new employees. Our strategy for talent 
retention is further based on a notion that we strive 
to be perceived as a safe and solid employer with 
solid core values. We pride ourselves in offering 
employees the opportunity to develop and prosper 
as part of our business while maintaining a good 
work-life balance.

When the pandemic hit we were well adjusted 
as an organization to handle the challenges of 
home-office requirements, occasional lock-downs 
and travel restrictions. However, the pandemic 
has caused challenges related to employee 
engagement. Nevertheless, we have initiated 
several activities for employees to maintain a sense 
of belonging while not being in the office, further 
described under health and safety. We have also 
experienced difficulties with the cancellation of 
external training activities and conferences, forcing 
us to increase focus on digital activities and events 
to keep developing our employees. This has been a 
learning process, also offering new opportunities to 
strengthen our company culture globally, as reach 
increases when communication and initiatives are 
digital. As a solution, we implemented Yammer as a 
global channel for internal corporate communication 
and employee engagement.

Turnover and exit interviews
Nordic’s People & Communication department 
encourages exit interviews with all employees 
resigning. In 2021, 95% of resigned employees 
participated in exit interviews.

The purpose of the exit interview is to obtain 
valuable feedback based on the employee’s 
experience, including the context for their decision 
to leave the company. This provides valuable 
and relevant feedback when assessing and 
defining improvement areas for the company. 
The exit interviews are conducted by People & 
Communication to obtain as objective information 
as possible, and to ensure a professional experience 
throughout the entire employee journey.

128

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | SOCIAL PERSPECTIVESIn 2021, the employee turnover rate was 5.6% 
which is  above our operational target (<5%) and 
an increase compared to the previous 3 years. 
However, this is not unexpected, and needs to 
be seen in connection with the pandemic and 
the constraints we have been challenged with 
over the last two years. Covid-19 has challenged 
engagement and made some employees feel 
disconnected from the company, affecting loyalty. 
Furthermore, it might also be suggested that 2020 
was a year with perceived artificially low turn-over 
levels within the industry, as a consequence of many 
companies struggling due to the pandemic, putting 
a break on the fight for talent. 

In total, 62 employees left the company during 
2021, of which 17,8 % were women, substantiating 
the argument that we need to keep focusing on 
having a workplace and company culture attractive 
fo all genders.

Occupational Health and Safety

Nordic Semiconductor recognizes that 
in addition to minimizing work-related 
injuries and illness, a safe and healthy 
work environment enhances quality of 
products and services, consistency of production, 
and worker retention and morale.

As a fabless company, the risk of injury or incidents 
in relation to direct operations is considered low. 
Heavy machinery and equipment are not used, 
nor do employees operate vehicles, and only 
limited handling of hazardous chemicals that 
can cause notable damage or injuries occurs. 
Only trained personnel may work with hazardous 
chemicals and emergency routines are in place and 
regularly rehearsed.

Nordic Semiconductor’s OHS (Occupational Health 
and Safety) risk assessment has highlighted 
ergonomic injuries and negative stress in the 
working environment as one of the main focus areas 
for improvement. Due to the Covid-19 situation 
over the past two years, the risk assessments have 
naturally been largely focused on the pandemic, 
both in relation to home office and returning safely 
back to the office when possible. 

As Nordic Semiconductor’s number of employees 
has grown considerably in recent years, the target 
has been to maintain a low level of sick-leave and 
high employee satisfaction from previous years. 
Due to the growth, necessary changes have been 
made to the organizational structure. Ensuring 
motivated and competent leaders on all levels in the 
organization is important to continue developing 
and producing world class products.

To ensure a positive and continuously improved 
working environment, Nordic Semiconductor has 
implemented an Occupational Health and Safety 
management system, certified to the standard 
ISO 45001 Occupational Health and Safety 
Management System by DNV. Nordic Semiconductor 
has established local Occupational Health and 
Safety Committees for operations in Norway, 
Finland, the Philippines, and Taiwan, working to 
continuously improve the working conditions and 
ensure a safe working environment. Other locations 
are covered by the corporate Occupational Health 
and Safety Committee (AMU) body in Norway. 

All Nordic Semiconductor subcontractors are 
certified to ISO 45001 or similar standards, and this 
is a prerequisite to become a Nordic Semiconductor 
manufacturing partner. Subcontractors are also 
required to follow the RBA Code of Conduct and 
must agree to comply with this document.

129

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | SOCIAL PERSPECTIVESNordic Semiconductor’s Health and Safety Policy
High employee satisfaction, minimal employee absence, a stable competent workforce, and no work related 
incidents are necessary to achieve high productivity and quality. This is accomplished by ensuring the 
following:

■  A safe working environment

■  Secure employment and meaningful work for the individual employee

■  Consultation and participation of workers and worker’s representatives

■  Nordic Semiconductor’s OH&S standards are adhered to by suppliers

■  Compliance with legal requirements, as well as internal policies and guidelines

■  Continuous improvement

Physical health while working from home
We have acknowledged that many of our 
employees have had to change their daily routine, 
especially with respect to physical activity. To 
encourage physical activity, we implemented a 
measure in 2021 where employees were given the 
opportunity to acquire  health related apps to 
foster physical well-being, sponsored by Nordic. 
In addition, we gave employees the opportunity 
to work-out for 60 minutes per week during work-
hours. These benefits were positively received 
by employees, and are to be continued, though 
adapted to a more open society with the ability to 
cater for gym-memberships, which would encourage 
social interaction. 

Social integration
It is imperative to Nordic Semiconductor that 
employees integrate well within the workplace, 
but also as a part of local society. During 2021 
this has been difficult as communities across the 
globe have been in various phases of lock-down 
and restrictions. Local facilitation has been made 
to ensure that employees don’t feel left in solitude, 
as some of them might be unable to travel to their 
home countries or meet acquaintances. Employees 
were encouraged to host social events during the 
holiday season for other colleagues in accordance 
with local authority guidelines to prevent employees 
from being involuntarily alone during the 
holiday season.

Health and Safety during the Covid-19 pandemic
The global Covid-19 pandemic has affected all 
areas of business throughout the world this year, 
and it has become a corporate social responsibility 
to act accordingly. Nordic Semiconductor is doing 
its utmost to protect the health and safety of its 
employees, and to help prevent the virus from 
spreading. From the initial stage of Covid-19, 
a dedicated management team and the OHS 
organization including Nordic Semiconductor’s 
Personnel Safety Representatives have been 
collaborating on decision-making and response 
based on relevant development across our global 
organization. The Executive Management Team is 
continuously assessing the outbreak as it evolves 
and implementing mitigating actions at early stages 
in the best interest of people and the business. This 
includes business travel restrictions, anti-infection 
measures at all offices, facilitating work from home, 
reducing Nordic’s presence at external events, 
and increased use of virtual meetings, webinars, 
and trainings. In addition, company policies and 
guidelines with local adjustments as relevant have 
been implemented with proactive actions and 
procedures to attend to both employees’ well-being 
and the company’s business continuity.

We have opened and closed local offices based on 
local governmental restrictions and requirements, 
causing employees to have a constantly changing 
work situation. We did not see any significant direct 
consequences of this on the overall employee 
health in 2021, but are aware of potential long-
term consequences, which has led to precautionary 
health measures.

Mental health while working from home
Since most employees at Nordic Semiconductor 
have worked from home for longer periods of time 
during 2021 following the pandemic, a variety of 
activities for virtual interaction and socialization 
have been encouraged and successfully initiated. 
Nordic employees across the globe have arranged 
everything from weekly social Friday afternoon 
meetings, quizzes, virtual coffee breaks, yoga 
sessions, and gaming sessions.

130

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | SOCIAL PERSPECTIVESapplications of SoCs to enable data rates of 1 
Tbits/s for 6G. Nordic is highly invested in being a 
driving force within technology development, and 
further cooperation with educational institutions is 
on the agenda for the coming years. 

micro:bit, do your :bit
In 2016 the BBC "Make it Digital" 
campaign gave away one million 
micro:bits for free to students across 
the UK. This original BBC micro:bit was created 
by the BBC (British Broadcasting Corporation) 
in partnership with world-class technology and 
product design co-creators, including Nordic 
Semiconductor, as a way to fuel enthusiasm for 
computing which had been added to the school 
curriculum. The focus is on girls and those from 
disadvantaged groups, with the aim of inspiring 
every child to create their best digital future. 

In 2021 Nordic announced that they would partner 
with the Micro:bit Educational Foundation to enable 
more children to access a digital education. One 
of the charities to benefit from this sponsorship is 
Teens Can Code, who are based in Nigeria. As a 
direct result of this initiative, they have now been 
able to train 52 volunteers who went on to carry out 
26 workshops for children aged 8-18 across seven 
states in Nigeria. These workshops benefited a total 
of 1,201 students, 610 of whom were girls.  Most of 
the students came from low-income communities 
with very limited technical infrastructure, particularly 
those from Cross-river and Calabar states. 
Participants were taught about the SDGs and how 
to use the micro:bit device with the MakeCode 
editor. 

This type of work will also be replicated in Kenya 
and Uganda by Iamthecode, SteamLabs, and 
Mindset Coders, reaching even more children.

We will continue to explore ways in which Nordic 
Semiconductor can make an impact through our 
technological contributions.

Community engagement

Promoting engineering education to 
students with focus on attracting female 
candidates
Nordic Semiconductor actively engages 
in activities and collaborates with universities and 
student bodies across the globe to introduce the 
electronics industry to engineering students. We 
also aim to encourage students to graduate with 
relevant competencies by having current employees 
participate as guest lecturers, and also having 
some employees engaged through university 
professorships. Furthermore, we also hire a large 
number of student-workers through both internships, 
summer-jobs, and part-time employment. We offer 
students 6-11 months internships in Norway, Finland, 
and Poland. The purpose is to offer them permanent 
employment after graduation.

We also focus on inspiring female students to 
pursue a career within tech and particularly the 
semiconductor industry. In order to increase the 
percentage of female participants in the industry, 
Nordic has cooperated with the Girl project ADA 
since 2015. The Girl Project ADA is a Norwegian 
University of Science and Technology (NTNU) 
project which aims to recruit, motivate and educate 
females within the Norwegian IT industry. ADA 
actively advocates for attracting females towards 
engineering degrees to ensure that a larger 
percentage of the students that graduate from the 
Faculty of Information Technology, Mathematics, 
and Electrical Engineering (IME) at NTNU are 
female. Nordic actively engages through office 
visits, presentations, and network opportunities for 
female students at NTNU. Read more at www.ntnu.
edu/girls.

Nordic is the main sponsor/partner for the student 
organization, Omega, which is the largest student 
union for electrical engineering  students at NTNU. 
Through the partnership, we directly engage with 
students who study electronics or cybernetics. We 
invite the students to events, and even though 
2021 was a challenging year in relation to hosting 
physical events due to Covid-19, we managed to 
engage the students through a minor event, the 
Nordic winter and fall Strava competition.

As a global company, Nordic also engages with 
several other universities across both England 
and Scotland, in addition to Sweden, Poland, 
and Finland. Nordic committed to sponsoring a 
professorship in System on Chip Technologies 
for wireless systems at the University of Oulu 
in 2021, together with several other local ICT 
companies in Finland. The five-year position is 
directed to investigate and develop the design of 
SoC technologies with an emphasis on wireless 

131

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | SOCIAL PERSPECTIVESIndicator

Target 2022

2021

2020

2019

Human Rights and Labor Rights

Number of incidents of Human Rights abuses

Number of incidents of labor principles violation

Percentage of smelters verified as RMI non-compliant

Human Capital and Diversity

Number of employees

Percentage female employees

Employee turnover rate (%)

Number of students/interns from universities

Number of consultants

Percentage of temporary workers

Health and Safety

Work related incidents

Lost Time Incident Rate (LTIR)

Fatality rate

Contractor fatality rate

Total sick leave (Norway)

0

0

0%

< 5.0%

0

0.0

0

0

Short time sick leave (Norway)

< 2.5%

Measurements related to social perspectives performance.

0

0

0%

1197

14.0%

5.6%

57

54

4.3%

0

0.0

0

0

2.28%

1.22%

0

0

0%

897

13.8%

3.1%

46

35.0

6.8%

1

0.0

0

0

1.35%

1.03%

0

0

0%

767

14.4%

6.8%

80

1

0.0

0

0

2.41%

1.51%

132

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | SOCIAL PERSPECTIVESGOVERNANCE PERSPECTIVES

133

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | COMPANY GOVERNANCE PERSPECTIVESGovernance perspectives

Commitment to the highest standards of business ethics and integrity is 
crucial for us to earn the continued confidence of our stakeholders. In 
this chapter we complement the Report from the Board of Directors and 
Standards of Corporate Governance chapters with further information on 
how Nordic Semiconductor is proactively working with material governance 
topics such as Anti-Corruption & Integrity, Data Privacy, Information Security, 
and Product Security. 

As part of our regular awareness training efforts, 
in 2021 we executed company-wide "Compliance 
& Integrity" webinars where 1080 employees 
participated in total (90% coverage) to ensure 
awareness of corruption and bribery risks and main 
requirements around Gifts & Hospitality, Conflict 
of Interest, and Insider Trading. The webinar also 
included helpful tools for ethical decision-making 
and whom to contact for support or to report 
matters of concern. 

When it comes to our supply chain, ESG topics such 
as Anti-Corruption, is considered throughout the 
whole supplier life cycle. From screening and risk 
assessments, to follow-up through audits and other 
monitoring activities, which are all an integral part 
of our supply chain management program. Nordic 
requires all subcontractors to follow the RBA Code 
of Conduct, which prohibits any and all forms of 
corruption, bribery, extortion, and embezzlement. 
To read more about our approach, see the Supplier 
management in a fabless structure section in the 
Our ESG foundation part of this report.

In 2022, our work will continue to strengthen our 
anti-corruption program with a particular focus 
on social donations and due diligence of business 
partners, as well as evaluating options for the 
measurement of employee's perception of integrity.

We will also assess potential improvements 
related to our overall corporate governance & 
compliance framework. 

Common for all material governance topics is 
our systematic and integrated approach where 
relevant respective risks and opportunities are 
identified and assessed through our corporate risk 
management process. Relevant mitigating actions 
and opportunities are defined in action plans and/
or KPI's as part of our business plan process and 
followed up through performance management 
processes and management reviews. 

Anti-Corruption & Integrity

At Nordic Semiconductor, we are 
committed to conduct business with 
high ethical standards, without any 
form of bribery or corruption involved 
in the execution of any of our business activities. 
This commitment and expectation apply to all 
employees and directors of Nordic Semiconductor 
Group entities, as well as anyone acting on behalf 
of such entities. 

One of our main ESG-KPIs for 2021 was to review 
our Anti-Corruption policy and increase awareness 
around risks of bribery and corruption. A risk 
assessment of our global operations was executed, 
assessing inherent risk factors such as business 
model and industry risk, country risk, transactional 
risks, and third party risks. Based upon this we 
revised our policy and established an enhanced 
anti-corruption program taking into account relevant 
regulations, standards, as well as best practice 
guidance, such as the RBA Code of Conduct, US 
FCPA, UK Bribery Act and US DOJ's guidance for 
evaluating corporate compliance programs. Risk 
mitigating measures were re-assessed and clarified 
and this work will continue in 2022.

Our enhanced anti-corruption program is integrated 
into Nordic's overall business processes, and aims 
to prevent, detect, and address risks of bribery and 
corruption throughout our business activities where 
we operate.

134

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | COMPANY GOVERNANCE PERSPECTIVESCybersecurity is an important aspect in relation 
to Information Security, and Nordic has measures 
in place to prevent, detect, and respond to data 
breaches or cyberattacks. The Security Operations 
Center and Cybersecurity Incident Response Team 
provide useful resources to prevent and effectively 
manage potential incidents. The company has also 
defined business continuity plans, with disaster 
recovery strategies to limit the potential risks from 
such incidents. Employees are regularly subjected 
to internal training and awareness programs on 
cybersecurity risks. 

Nordic’s IPR policy provides visibility and control 
over relevant in-house IP and patent filing, and it is 
embodied in project management workflows and 
milestones, with related checklists.

Product security
In the world of connected devices, security is 
essential. Nordic Semiconductor is at the forefront of 
supplying solutions, ICs, and software that enable 
our customers to build highly secure products. 
Throughout our development organization, there 
is focus on designing secure products, optimizing 
security features, and ensuring that we bring 
products and services to the world with unsurpassed 
quality, security, and reliability. Our Product Security 
Officer is responsible for leading the effort and they 
report directly to the CTO.

Our systematic security development process 
considers cutting edge best practices, regulatory 
requirements, and customers’ input to define our 
products and services. Nordic’s product security 
strategy is aligned with the Platform Security 
Architecture (PSA) initiative by Arm, which offers 
a framework for securing connected devices. 
Nordic’s devices will be certified to comply with 
PSA requirements.

Nordic Semiconductors Product Security Incident 
Response Team (PSIRT) responds to reported 
security vulnerabilities in Nordic Semiconductors 
products (hardware and software), documentation, 
and services. The PSIRT ensures that security 
vulnerabilities are analyzed, documented, and 
communicated in a responsible manner. To help 
secure its latest hardware and software portfolio, 
Nordic Semiconductor sponsors a bug bounty 
program on a top hacker-powered security 
platform, HackerOne.

Data privacy and personal 
data protection
Nordic Semiconductor ASA (including subsidiaries) 
are committed to individuals’ privacy and the 
protection of registered personal data. The EU 
GDPR (EU General Data Protection Regulative), as 
well as an increasing amount of global data privacy 
laws, sets strict requirements for protection of 
personal data by Nordic Semiconductor.

Nordic Semiconductor has implemented internal 
policies and procedures to support its compliance 
with applicable privacy law, as well as published 
privacy policies for describing the personal data 
processed, the purpose of the processing, and the 
legal basis for doing so. Furthermore, personal 
data is protected by relevant measures as identified 
through our ISO 27001 certified Information Security 
Management System.

Data privacy is a part of regular information 
security awareness programs for employees, while 
employees responsible for processing activities of 
personal data are further trained in how to ensure 
legal, justified, accurate, and rightful processing 
of personal information. A dedicated Privacy 
Responsible, reporting to the Legal Director, is 
responsible for follow-up on required evaluations 
of activities and communication with internal and 
external stakeholders on matters of privacy. Annual 
reports from Privacy Responsible are presented in 
Management Review.

Any incidents of non-conformities related to 
privacy are handled according to company defined 
routines for registration, investigation, corrective, 
and preventive actions (including notifications to 
affected parties and authorities).

Information security
Information Security concerns protection of 
information’s confidentiality, integrity, and 
availability. Nordic Semiconductor is committed 
to the protection of business information and 
information systems, such as proprietary design 
data, external stakeholders’ intellectual properties 
entrusted to Nordic, and personal data. 

Nordic Semiconductor is certified to the standard 
ISO 27001 Information Security Management System, 
and technical and organizational measures are 
implemented to protect information. Such measures 
can include (but are not limited to) information 
classification and labeling, access rights reviews, 
IT operations, backups and physical security. 
Vulnerability assessments are regularly conducted 
on company systems, and internal and external 
audits are carried out to identify improvement 
potentials at least annually. 

135

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | COMPANY GOVERNANCE PERSPECTIVESWhistleblower program
Nordic Semiconductor is committed to a culture 
of trust. We encourage an open dialogue where 
employees are comfortable to ask questions, seek 
guidance, and raise concerns. 

Employees as well as external stakeholders are 
encouraged to report any misconduct related 
to the business of Nordic Semiconductor by use 
of the whistleblower channels made available 
internally through our intranet, as well as externally, 
through our website. Whistleblower reports shall 
be handled in accordance with our established 
whistleblower process. 

Nordic Semiconductor does not tolerate any 
retaliation against those who report a concern in 
good faith.

Reports of misconduct are handled by Nordic 
Semiconductor's Whistleblowing Group, which as of 
2022 will be led by our Group Compliance Officer. 
Any reported concerns shall be investigated for 
root-cause, corrective and preventive actions to be 
evaluated, including potentially involving relevant 
authorities, while preserving reporter confidentiality 
in accordance with relevant jurisdiction. To allow 
for anonymous reporting, a 3rd party service is 
set up as one available whistleblowing channel, 
and in case of such reporting only anonymized 
information will be addressed to the Whistleblowing 
Group. Such reports and related investigations will 
also be part of the key priorities regularly reported 
by the Group Compliance Officer to the Board 
Audit Committee of Nordic Semiconductor ASA 
as of 2022.  

No report was made through available 
whistleblower channels in 2021.

Indicator

Target

2021

2020

2019

Confirmed incidents of corruption and actions taken

0

Numbers of reports made through whistle-blowing 
channels

Numbers of whistleblower reports investigated and 
resolved

Total number of board members

Total number of female board members

Total number of independent board members

Total number of committee chairs

Total number of committee chairs occupied by women

0

0

0

0

0

0

11

3

7

2

0

0

1

1

11

3

7

2

0

Does your company follow a Data Privacy policy?

Yes

Yes

Yes

Yes

Substantiated complaints concerning breaches of 
customer privacy and losses of customer data

Number of substantiated1 complaints or incidents 
concerning data breaches

Number of Information Security audits by 3rd party

Number of internal audits addressing Information 
Security

Number of vulnerability scans on internal IT systems

Annual Information Security awareness training 
conducted

Measurements related to governance performance.

0

0

3

5

4

0

0

4

5

4

0

0

4

6

2

0

0

2

6

0

Yes

Yes

Yes

Yes

1Substantiated definition (GRI): Identified severe data breach or a complaint lodged with the organization regarding data breaches 
that has been recognized as legitimate by the organization

136

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | COMPANY GOVERNANCE PERSPECTIVES137

NORDIC SEMICONDUCTOR | ANNUAL REPORT 2021 | COMPANY GOVERNANCE PERSPECTIVES