Nordic Semiconductor Annual Report 2022

← All annual reports

FY2022 Annual Report · Nordic Semiconductor

Loading PDF…

ANNUAL
REPORT
2022

Content

Message from the CEO

Nordic at a glance

Financial highlights

ESG highlights

Products

Report from the board of
directors

Our Group

Group overview

Strategy and ambitions

Operational overview

Sustainability overview

Financial

Environment

Environmental management

Climate change and
GHG emissions

Hazardous substances

Resource reduction

Description of less material topics

TCFD reporting

Environmental performance

Social

Diversity, equity & inclusion

Human capital development

Employee Engagement

Health & Safety

Responsible supply chain

Social performance overview

Governance

Governing structure

Board of directors

Executive management

Events and development

Norwegian Code of Practice
for corporate governance

Risk Management

Managing sustainability in Nordic

Compliance & integrity

Governance performance

Outlook

Concluding remarks

Financial statements

Income statements

Statement of financial position

Cash flow

Disclosures

Alternative performance meassures

111

05 Responsibility statement

Audit opinion letter

07 Other appendices

Message from
the CEO

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607Message from the CEO

2022 was another strong year for Nordic, with continued revenue growth, high gross margins, and
record results. Our Bluetooth Low Energy products remain in high demand from our tier-1 customers,
although our delivery capabilities continued to be held back by wafer supply. The supply situation
remains an issue also for 2023, and combined with lower demand for our proprietary products and
a more uncertain outlook for cellular IoT, this has made us lower our growth expectations for 2023.
However, we maintain our long-term growth ambitions, and that means we continue to invest in our
organization, our R&D, and our growth capabilities. The development of a complete connectivity
portfolio across Bluetooth, Wi-Fi and cellular IoT broadens our scope of business and opens
significant long-term growth opportunities.

2022 continued to put strains on the organization, with
Covid-19 travel restrictions, mandatory home office in
the beginning of the year, and logistics challenges in
many industries and geographical regions. Nevertheless,
we stayed fully operational and handled the higher
business volumes and continued logistics challenges.

We also continued growing our competence base and
capabilities. We onboarded around 250 new employees
during the year and expanded our workforce to almost
1,450 people globally. This was quite an achievement,
and I want to take the opportunity to thank everyone
in our organization for their patience, stamina, and
drive to make this happen. Working out of offices in
16 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.

"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."

In regard to our financial development, revenue
increased by 27% to USD 777 million in 2022, and our
revenue has increased by an annual average of almost
40% over the past three years. The key growth drivers
remain strong demand from major tier-1 customers,
accelerating traction in Industrial IoT, and disruptive
technology adoption in the healthcare sector. Last year,
I also included consumer electronics market as a growth
drive, although demand in parts of this market has
eased off in the backend of the pandemic.

Bluetooth® Low Energy (LE) is by far the largest revenue
contributor of our connectivity technologies, increasing
by 33% year-on-year and now accounting for 86% of
revenue. We continue to excite developers and engage
both tier-1s and broad market customers. Bluetooth
revenue share from our top-10 customers increased from
40% in 2021 to 44% in 2022 and exceeded 50% as we
moved into 2023.

Our proprietary products enjoyed strong demand
through the pandemic years, with home offices and
gaming driving demand for PC accessories and HID
devices. In 2022 we saw revenue decline by 10% with
low demand towards the end of the year. Proprietary
products accounted for 10% of full-year revenue,
and this is expected to decline further as customers
are migrating to more modern technologies such as
Bluetooth Low Energy. We saw revenue growth of
nearly 50% for our cellular IoT products, although
demand eased off in the second half of the year.
Cellular IoT accounts for around 3% of revenue and is

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607our sustainability framework and governance by, for
instance, establishing a Sustainability Committee at the
Board level. This ensures a holistic approach throughout
our organization and progress toward our defined
ESG targets.

We continue to gain recognition for our ESG reporting
and received an "A" rating in Position Green’s annual
report on companies based in the Nordic countries, and
was awarded an "A" for our environmental reporting by
Carbon Disclosure Project (CDP). Nordic also remains
a constituent of the STOXX Global ESG Leaders Index,
and was selected last year by Euronext to participate in
the Euronext Tech Leaders initiative.

Please dive deeper into our sustainability efforts in the
ESG section of this report.

Rounding off, I would like to take the opportunity
to thank all my colleagues in the company for their
invaluable efforts to make us a little bit better every
day. We will do our very best to remain a strong partner
for our customers, suppliers, distributors, and other
stakeholders in 2023.

expected to become a stronger revenue contributor
in the years to come. We also hold high long-term
ambitions for our other products groups within Wi-
Fi®, Power Management, DECT New Radio plus (NR+)
and Cloud Services, which are still in early- or pre-
commercial stages.

We are optimistic about our growth opportunities in the
years to come, with a solid outlook for Bluetooth Low
Energy and gradually increasing volumes and revenues
coming from new connectivity technologies and from
new products, services, and applications.

With our strong gross margins and high operational
leverage, we delivered record EBITDA-margins of 26.5%
and profit before tax of USD 167.2 million in 2022.
Going forward, we expect to maintain gross margins
above 50%, and reiterate our long-term EBITDA-margin
ambition of 25%.

Investing early in high-growth opportunities is one of our
strategic pillars. Around 40% of our capex investments
go into segments that account for only around 4% of
current revenue, and we will continue to invest to make
the most of our growth potential. Another example of
our commitment to growth is our up-front payment to
broaden our wafer supply base with a new vendor.
This will begin to support our wafer demands from
2024 onwards. Additionally, we are expanding our
competence base and closed the acquisition of the
US memory specialist Mobile Semiconductor in March
2023. Combined with our organic investments, these
investments significantly expand our opportunity
pipeline and addressable market, and will enable
continued strong growth in the longer-term.

Digitalization, connectivity and IoT will play an
important role in solving many environmental and
societal challenges for both consumers and enterprises,
as well as shaping a more sustainable economy.
Nordic continues our commitment to contributing in
a tangible way through our energy-efficient products
and support for customers with various solutions for
these challenges. This year, we have also enhanced

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices0102030405060702

Nordic at a glance

Message from the CEONordic at a glanceFinancial highlightsESG highlightsProductsReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices030405060701027

03040506070102Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendicesFinancial highlightsESG highlightsProducts8

Report from the
Board of Directors

Our groupFinancial EnvironmentSocialGovernanceOutlookConcluding remarksMessage from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices04050607010203Report from
the Board of Directors

In 2022, we achieved solid revenue growth, higher gross
margins, and record results. Although the demand for our
Bluetooth Low Energy products from large tier-1 customers
remains strong, our delivery capabilities are currently limited
by the availability of wafers. We continue our commitment
to investing in future growth, as evidenced by the launch
of our first Wi-Fi product and significant improvements in
our cross-technology development platform. Additionally,
we are proud to have been promoted to the highest
level of membership in the Matter standard organization,
Connectivity Standards Alliance. This recognition reflects our
commitment to setting connectivity industry standards.

Nordic has been a pioneer within wireless connectivity
since its beginning in 1982 as an integrated circuits
manufacturer. Starting with proprietary 2.4GHz
technology for PC accessories, Nordic has developed
into a globally leading supplier of Bluetooth® Low
Energy and multiprotocol solutions for short-range
connectivity. The Group has also established a leading
position in the emerging market for cellular IoT, and in
2020 expanded into next-generation Wi-Fi technology to
cover the embedded Wi-Fi market.

Nordic’s product offering includes integrated circuits
(ICs), Systems-on-Chip (SoCs), Systems-in-Package (SiPs),
and Software Development Kits (SDKs). The Group
sources components, and assembles and packages the
products through world-class subcontractors in Asia,
and distributes its products to branded electronics
manufacturers through an extensive network of global
and regional distribution partners.

Nordic Semiconductor ASA ("The Company") is the
Group parent, headquartered in Trondheim (Norway).
As of year-end 2022, the Group has offices in Trondheim
and Oslo (Norway); Beijing, Shanghai, Shenzhen and
Hong Kong (China); Oulu, Espoo, Tampere, and Turku
(Finland); Düsseldorf (Germany); Hyderabad (India);
Yokohama (Japan); Eindhoven (the Netherlands);
Manila (the Philippines); Krakow and Wroclaw (Poland);
Singapore (Singapore); Seoul (South Korea); Stockholm
and Lund (Sweden); Taipei (Taiwan); Bristol, Hatfield and
Swindon (UK); and Portland (USA).

Strategy and ambitions
Nordic's mission is to be a world-leading supplier of
connectivity solutions. The Group offers proprietary
technology and ultra-low power Bluetooth and
multiprotocol technologies in the short-range market,
and cellular IoT over LTE-M and NB-IoT networks in
the long-range market. In the second half of 2022,
the Group also launched its first Wi-Fi product,
a companion chip to its short-range and long-
range products. Nordic is one of few companies
offering all three of the world’s most popular IoT
technologies (Bluetooth, Wi-Fi and cellular). The Group
is also a key contributor to a variety of connectivity
standard initiatives, like the new 5G wireless
standard DECT NR+ and Matter by the Connectivity
Standards Alliance (CSA).

To build and maintain a strong market position in fast-
paced and innovative markets, it is crucial to inspire
and engage developers. Nordic has accomplished
this by creating a globally-renowned developer
community, DevZone, which has over 160 thousand
Q&As and supports more than 100,000 unique
development projects.

Overall, the Group shipped more than 700 million units
in 2022 to a broad customer base ranging from single
developers to globally leading high-volume customers.
To develop and maintain these volumes, it has been
key to develop scalable solutions across technologies
and markets, and to engage both large enterprises and
smaller one-product companies as customers.

Nordic has been the market leader in the broad market
ever since the introduction of Bluetooth Low Energy
products in 2012. The Group has also established strong
customer relationships with tier-1 customers, such as
major global platform companies and market leaders
in different verticals. Demand from these customers has
increased sharply over the past years.

Revenue increased by 27% in 2022 and has shown an
average annual increase of 39% over the past three
years. The end-user markets for Nordic’s products
include both consumer products and an increasing
variety of industrial and healthcare applications.
Healthcare revenue increased by 90% over 2021,
industrial revenue by 35%, and consumer revenue by
19%. Revenues in the "Other" segment mainly reflect
sales to module manufacturers, and increased by 59%
year-on-year.

Connectivity and IoT through low power wireless
solutions will play an important role in finding solutions
for a more sustainable economy. Nordic remains
committed to contributing to sustainable solutions
through the potential use of its products in such
applications as well improving its own ESG performance.
In 2022, Nordic has enhanced its sustainability
framework and governance by, for example, establishing
a Sustainability Committee at the Board level.
This to ensure proactive management of risks and
compliance with the increasing ESG regulations while
taking a holistic and aligned approach throughout
the organization.

Employees are one of Nordic's key resources, and
employee engagement is a strategic pillar of the
Group's current and future success. Nordic believes
employee engagement is best fostered in an
environment including a diverse mix of age, gender,
and cultural backgrounds who feel valued and equally
treated. Nordic's 1,435 employees are between the
ages of 22 and 71. Last year saw a 42% increase in
new female hires. This diversity is part of the reason
for Nordic’s low employee turnover and high loyalty
scores. Furthermore, high growth requires continuous
organizational development. Nordic expanded its
employee base, resulting in a 19% increase from the end
of 2021. Overall, the Group has expanded its global
workforce by more than 86% over the past three years.

These investments reflect our belief in the long-
term growth potential and support the Group’s
high ambitions.

As in 2021, Nordic’s delivery capacity have been
negatively affected by a shortage of wafers on the node
the Group uses for its Bluetooth Low Energy products.
Production capacity for the Group’s cellular IoT products
was also affected by a component shortage in the first
half of 2022.

Nordic has worked tirelessly to help its customers
manage the challenges this has created, both by
striving to secure additional wafers and by pulling in
wafers from subsequent quarters to allow for early
delivery. Overall, Nordic shipped over 700 million
products in 2022.

Nordic’s own supply chain capacity and in-house testing
capabilities have met the higher volume, following
investments in testing equipment and component
inventory buffers over the past three years.

Demand developments
Nordic saw very strong demand across its entire short-
range portfolio throughout the pandemic, with weaker
development in parts of the market during 2022. In
terms of technologies, this mainly relates to the Group’s
legacy products, the proprietary 2.4GHz productions
and the first-generation Bluetooth products in the nRF51
Series. Toward the end of 2022 the Group experienced
a slowdown in the cellular market. We believe this to be
temporary given the amount of pre-commercial cellular
IoT projects with high volume potential.

Demand for Bluetooth Low Energy products from the
largest tier-1 customers remains strong, and these
customers account for an increasing share of revenue.
The top-10 customers accounted for around 44% of
Bluetooth Low Energy revenues in 2022, up from 40% in
2021. The share toward the end of the year exceeded
50%. This development reflects not only strong demand
from these customers, but also that the Group has
prioritized these customers in a market with constrained
wafer supply.

A combination of high demand and limited supply led
to a large increase in the order backlog to NOK 1.8
billion at the end of 2021. This was significantly higher
than production capacity. Throughout 2022, Nordic
has worked with its customers to better align the order
backlog with delivery capability. Toward the end of
the year, the Group also saw lower demand for its
proprietary products and generally weaker demand
among Chinese broad market customers, leading to
more order cancellations. Nordic has encouraged its
tier-1 customers to return to normal purchasing patterns
of placing orders only for next two quarters, which also
contributed to a reduction of the backlog. At the end of
the year, the order backlog had thus declined to USD
839 million.

Bluetooth Low Energy and multiprotocol products
Nordic is the market leader in Bluetooth and
multiprotocol designs. According to Bluetooth Special
Interest Group (SIG) data compiled by DNB Markets,
Nordic had a market share of 39% of new design
certifications in the Bluetooth Low Energy market in 2021.
A total of more than 1,100 new designs were certified in
2022, of which 446 had Nordic inside. The design market
share has been relatively consistent over time, and the
Group has had a market share around 40% of the more
than 6,000 designs certified over the past five years.

These high market shares reflect the breadth of Nordic’s
portfolio of Bluetooth and multiprotocol products and
solutions. Many competitors offer only one or a few
alternatives, whereas Nordic offers a wide range of
SoCs, ranging from entry-level SoCs for cost-constrained
applications to highly advanced SoCs for complex,
high-performance applications. This enables the Group
to meet different customer requirements at the right
price point.

The Group now has 7 different SoCs in the nRF52
Series, from the entry-level nRF52805 to the high-end
nRF52840, as well as the flagship nRF5340 SoC. The
dual core nRF5340 supports Bluetooth 5.3/Bluetooth
Low Energy, Bluetooth mesh, Thread, and Zigbee, with
established support for AI and machine learning.

Nordic also uses the nRF5340 to support the Matter
standard, where the Group is one of the main
contributors. Backed by Apple, Amazon, Google, and
several hundred other companies, Matter partners
are working to secure seamless connectivity and
interoperability of devices, hubs, apps and services from
different device manufacturers and software vendors.

Nordic is continuously improving the capabilities of
its nRF Connect Software Development Kit (SDK) and
recently launched several major updates to its software.
The SDK offers a common easy to use platform with

extensive developer tools for product development
across Bluetooth Low Energy, Wi-Fi, cellular IoT,
Bluetooth mesh, Thread, Zigbee, and Matter products.

Cellular IoT
Nordic is applying a scalable and flexible "go-to-
market" strategy in the cellular IoT market, seeking to
open the broad market for innovative customers and
solutions. Traditional business models in this area have
focused on cell phones or 2G/3G industrial applications
with 1-1 support, which have limited uptake and
commercial opportunity.

Nordic's globally certified, ultra-low power product offers
connectivity, application processor and memory, open-
source software, and readily available technical support
through Nordic DevZone and distributors. The hardware
in this offering is the award-winning nRF9160 cellular
IoT System-in-Package (SiP), which leads the market on
power consumption, size, and form factor. The product
has been upgraded during the year, including amongst
other improved GNSS functionality and location APIs for
cell location services.

Nordic has established a broad carrier certification
program with global operators and 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
Nordic Thingy:91 in combination with the operator’s
Managed IoT Cloud (MIC) offering.

Nordic's end customers are currently working on
hundreds of different cellular IoT projects across a
variety of verticals, including industrial and consumer
asset tracking, industrial sensors and metering, smart
home consumer products, healthcare applications,
and modules.

Many of Nordic’s cellular IoT customers have gained
commercial traction over the past years driving a 49%
revenue growth in 2022. Many customers are startup
and growth companies seeking project financing in
uncertain economic times. This resulted in lower demand
in the second half of 2022, into 2023.

The product is a Wi-Fi 6 companion IC ideally suited to
work with the advanced multiprotocol SoCs nRF52840
and nRF5340 or the nRF9160 cellular SiP.

nRF Connect SDK
The nRF Connect Software Development Kit (SDK) is a
scalable and unified SDK for building products based
on all Nordic devices. It offers developers an extensive
framework for building size-optimized software for
memory-constrained devices, as well as powerful and
complex software for more advanced devices and
applications. This cross-technology platform is one of
the ways Nordic leverages its connectivity expertise
and gain advantages in new connectivity products.
Developers can improve time to market and ease of use
on all new and existing devices. Updates in 2022 to the
nRF Connect SDK added significant new functionality
and improved ease of use.

Industry standard initiatives
Nordic is a key contributor to some of the connectivity
industry's most pronounced initiatives. One of these
is the new 5G wireless standard DECT NR+, which
adds another connectivity standard to the portfolio.
Also notable is Matter by the Connectivity Standards
Alliance. Nordic was recently appointed to the alliance’s

Power Management
Since the release of the first SoC, Nordic’s focus has
been on delivering wireless connectivity with the lowest
possible power consumption. The Group continues
to build a portfolio of power management products
founded on its knowledge in this area.

Nordic launched its first catalog Power Management
product, the nPM1100, in 2021. Its Power Management
integrated circuit (PMIC) ensures reliable power supply
and stable operation for Nordic’s nRF52 and nRF53
Series SoCs, with minimal power usage. In 2022, the
portfolio was broadened with the nPM6001 for complex
applications in multiple power domains. The Group also
has a portfolio of Power Management tools such as the
nPM1100 Evaluation Kit and Power Profiler II kit.

Design partner & solutions partner program
In 2021, Nordic launched the Nordic Partner Program
with both design partners and solution partners to

Sustainability review
At Nordic we believe that value is not only created
through serving our customers and making innovative
world-class products, but also by holding ourselves
accountable for the impact of our business on the
environment and society. Nordic's vision for sustainability
defines business success as integrating responsible
practices into our business activities, enabling us to
drive innovation, foster long-term growth, and create
value for all of our stakeholders.

Sustainability reporting
In order to provide a comprehensive view of our
Group's performance, including environmental, social,
and governance impacts, we have integrated our
sustainability and financial reports. This shows our
strengthened commitment to being accountable and
transparent about our sustainability efforts. Our goal is
to openly communicate our impact, advancements, and
future sustainability challenges, as well as our progress
towards our sustainability objectives.

Reporting standards and guidelines
Our sustainability reporting follows several reporting
standards, frameworks, and recommendations in order
to ensure structured, transparent, and relevant reporting
of sustainability performance.

This report has been prepared in accordance with
Global Reporting Initiative (GRI) standards, the world's
most widely used sustainability reporting standard.
The respective GRI indicator index can be found in the
appendices section of this report.

help customers accelerate time to market. There are
now around 35 design partners across the Americas,
Europe/EMEA and Asia, specializing in hardware and
RF, embedded software, and security across multiple
protocols and technologies. A dozen solution partners
work across Bluetooth positioning systems, cloud and
device management, cellular antennas, and provisioning
of cellular solutions combining connectivity, eSIM, data
plans, device management, and consultancy services.

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

Moreover, we are disclosing the climate risks facing
our business for the first time, following the Task
Force on Climate-Related Financial Disclosures (TCFD)
framework. The TCFD assessment can be found in the
Environmental section of this report, and the TCFD index
can be found in the appendices section.

Materiality assessment
In 2022, we conducted a materiality assessment
according to the guidance provided in the GRI 3 (2021)
Material Topics. This assessment helped us identify
the issues that have the most significant impact on
the economy, environment, and people through our
activities and business relationships. We have organized
our sustainability reporting into these material topics.
Each topic is explained in its respective ESG chapter,
which includes the reasons for its significance.

ESG performance
ESG targets and/or KPIs are defined to measure and
monitor our sustainability performance. Furthermore, to
ensure integration in our value creation, key, measurable
ESG KPIs are linked to our Short Term Incentive program
for all employees and our Long Term Incentive programs
for the Executive Management Team.

Reporting period
To ensure consistency and alignment, we adhere to an
annual reporting cycle that aligns with the standard
financial reporting period. Our most recent sustainability
report was included in the previous annual report
published in March 2022, covering the Financial Year
2021. To access sustainability reports from previous
years, please visit our investor relations website.

EU Taxonomy
An assessment of the EU Taxonomy Regulation and its
delegated acts for the financial year of 2022 concluded
that the business activities of Nordic Semiconductor
are not included in its current scope and therefore
disclosed as non-eligible economic activities. However,
the Taxonomy regulations and its delegated acts are
living documents that evolve over time. More activities
are added to its scope, including enabling activities.
Nordic will therefore continue to closely monitor the
EU developments on the Taxonomy regulation and its
delegated acts.

CDP A rating
Nordic was amongst 283 reporting companies out
of more than 15,000 that were awarded an “A” for its
environmental reporting by CDP in 2022. This rating is
awarded to companies that CDP sees as leading the
way in environmental transparency and performance on
climate change.

Position Green A rating
Nordic received an "A" rating in Position Green’s 2022
“ESG 100” report, which is awarded to companies that
Position Green views as reporting in line with best
practice. These include a good description of material
issues and performance in these areas, as well as a
clear strategy and specific, quantifiable targets.

Sustainalytics Low Risk rating
As of February 2022, Nordic Semiconductor received
an ESG Risk Rating of 14.8 from Sustainalytics, and was
assessed to be at Low Risk of experiencing material
negative financial impacts from ESG factors. Nordic's
ESG risk rating was ranked 14/315 for the broader
semiconductor industry, and 6/211 for the semiconductor
design and manufacturing industry groups.

Nasdaq ESG Transparency Partner
In 2022, Nordic Semiconductor was again recognized as
a Nasdaq ESG Transparency Partner. This recognition
has been awarded to Nordic since Nasdaq's inaugural
evaluation in 2019. The recognition is awarded to
companies that exhibit a high degree of openness to
their investors regarding environmental, social, and
governance concerns.

STOXX® Global ESG Leaders Index
Nordic Semiconductor was included in the STOXX®
Global ESG Leaders index in 2021. The index contains
410 companies that rank highly on environmental, social,
and governance metrics.

Select 2022 solutions contributing to the SDGs

The Sustainable Development Goals (SDGs) are specific
goals and indicators adopted in 2015 by the United
Nations for sustainable development. The SDGs set
forth a systematic global framework to end poverty
and inequality, improve health and education, and spur
economic growth – all while tackling climate change
and working to preserve our oceans and forests.

The SDGs consist of 17 economic, social, and
environmental goals. Nordic support sustainable
development through IoT solutions for energy efficiency
and energy management. As shown above, the
examples from 2022 illustrate how Nordic's products and
services provide practical solutions to address a variety
of SDGs in both developed and developing countries
and in public and private sectors. This highlights the
company's commitment to delivering attractive and

efficient solutions that drive positive impact and
contribute to sustainable development. For instance,
IoT solutions for smart lighting can significantly reduce
the energy needed to power homes, businesses, and
cities. This saves energy and resources, and reduces
greenhouse gas emissions, essential for addressing
climate change.

IoT solutions are widely used to optimize resource usage
and improve data analytics in various sectors such as
energy, travel, healthcare, transportation, maintenance,
manufacturing, agriculture, waste management, and
smart cities. Consequently, IoT solutions can directly
address and contribute to the United Nations' 17
SDGs, depending on the design and utilization of
such solutions.

Nordic strives to make its products smarter and more
efficient while consuming less energy. Our solutions
allow devices to harvest energy locally, perform efficient
data analytics, reduce data transfer, and decrease the
load on energy-intensive data centers.

To better understand how Nordic’s products may
contribute to sustainable development and various
SDGs, a conceptual illustration of the Internet of Things
(IoT) and our product and services role is shown in the
figure above.

Conceptual illustration of the Internet of Things. Nordic continuously adds more intelligence and capabilities to its products while using less
energy. This enables the ”things” to harvest energy locally, do efficient and enhanced data analytics, minimize data transfer and reduce
load on energy-intensive data centers.

Nordic reported solid revenue growth
and improved gross margin in 2022,
despite delivery capacity remaining
capped by limited supply of wafers
throughout the year. The Group
further increased its EBITDA margin
to record high operating profitability
while balancing investments in new
products and technologies.

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 the separate
chapter on Alternative Performance Measures for
further details.

Income statement
The Group classifies its revenues by technology.
Short-range wireless components are split on end-
product markets.

Revenue by technology:
USDm

Bluetooth

Proprietary wireless

Short-range wireless
components

Cellular IoT

ASIC Components

Consulting services

Other

Total

2022

669.1

75.7

2021

503.1

83.9

744.8

587.0

25.4

4.6

—

2.0

17.0

6.1

0.4

Change

33.0%

(9.7)%

26.9%

48.9%

(24.3)%

(100.0)%

776.7

610.5

27.2%

Total revenue increased by 27.2% to USD 776.7 million
in 2022, up from USD 610.5 million in 2021. The growth
comes as a result of higher supply of wafers, higher
prices, and favorable product mix, offset by reduced
Proprietary revenue.

Growth was currently capped by limited availability
of wafers for Bluetooth technology. Revenue growth
in short-range wireless components is therefore not a
complete reflection of growth in demand.

Revenue from Bluetooth increased by 33.0% to USD
669.1 million in 2022. Bluetooth accounted for 86% of
Group revenue in 2022. The revenue increase reflects
growth in demand across all end-product markets.

Revenue from Nordic’s proprietary products decreased
by (10)% to USD 75.7 million in 2022. Proprietary
revenues are returning to level achieved prior to
Covid-19, as consumers return to historical home office
electronics spending.

Industrial revenues grew 35% in 2022. The main drivers
have been industrial automation, utility sensors, asset
tracking solutions, and retail solutions.

Healthcare revenues increased by 90.0% in 2022.
The pandemic has generated strong and sustained
momentum for connected medical devices. The Group
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 58%. This
mainly reflects sales to module manufacturers servicing
many end products in all markets and regions.

Revenue from cellular IoT increased by 48.9% in 2022
to USD 25.4 million as more projects are gaining
commercial traction. Revenue from cellular IoT is
distributed over a multitude of customers with relatively
new and innovative products.

Gross profit
USDm

Gross Profit

Gross Margin

2022

436.8

2021

326.6

56.2%

53.5%

Change

33.7%

2.7%

Sales of ASIC products decreased by 24.3% in 2022
to USD 4.6 million. Nordic is not designing new ASICs,
hence future revenue depends on demand from existing
customers and applications.

Short-range and cellular components by end-product
markets:
USDm

2022

2021

Change

Consumer

Industrial

Healthcare

Other

Total

483.8

408.2

191.5

67.6

29.2

772.1

141.9

35.6

18.4

604.1

18.5%

35.0%

90.0%

58.5%

27.8%

Gross profit amounted to USD 436.8 million, an increase
of 33.7% from the previous year. Hence, gross margin
increased to 56.2% in 2022 from 53.5% in 2021.

The continued strong underlying gross margin reflects
a market leading product portfolio. Nordic has focused
allocations to tier-1 customers in the supply constrained
situation. In addition, the Group kept a solid gross
margin as product price adjustment absorbed wafer
price increase.

The Group's long-term target is to continue generating
gross margins above 50%, allowing for changes in
the customer and technology mix, with lower margin
expected in cellular IoT business.

The Group reports on four end-user markets: Consumer,
Industrial, Healthcare, and Others.

Consumer revenues increased by 19% in 2022. PC
accessories remain the largest sub-segment, although
gaming accessories and home entertainment have
become increasingly important revenue drivers over the
past years.

Operating expenses
USDm

Payroll expenses

Other OPEX

OPEX excl. D&A

Depr. & Amort.

Total

2022

161.4

69.7

231.1

44.1

275.2

2021

149.8

52.1

201.9

37.8

239.7

Change

7.8%

33.8%

14.5%

16.6%

14.8%

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendicesOur groupFinancial EnvironmentSocialGovernanceOutlookConcluding remarksOperating expenses amounted to USD 231.1 million in
2022, excluding depreciation and amortization. This was
an increase of 14.5% from USD 201.9 million in 2021.

The higher expenses mainly reflect a 20.7% increase in
the number of employees from 1,197 to 1,435 during the
year partially offset by favorable exchange rates. The
increased workforce reflects primarily increased R&D
activity in addition to strengthened sales general and
administration function (SG&A) and increased supply
chain capacity.

Measured by function, expensed R&D accounted
for USD 160.5 million of operating expenses in 2022,
compared to USD 139.4 million in 2021. R&D intensity,
measured as a percentage of revenue, decreased
slightly from 22% in 2021 to 21% in 2022 while
investments increased USD 21.1 million in absolute
terms. Nordic has a strong commitment to innovation
in existing and new markets, and will continue to target
investing 15%-20% of revenue in R&D.

SG&A expenses increased to USD 70.6 million from USD
62.5 million in 2021. SG&A is also expected to continue
to increase in absolute terms, as the Group expands it
organization to support growth. However, Nordic has
shown operational leverage in 2022. As a percentage of
revenue, SG&A slightly decreased from 10% in 2021 to
9% in 2022.

Total cash operating expenses amounted to USD 229.7
million, when adjusting for non-cash items, capitalized
development expenses, equity-based compensation,
and depreciation and amortization. This was an
increase from USD 200.1 million in 2021.

Nordic capitalized USD 6.5 million development
expenses in 2022, up from USD 5.6 million in 2021. Equity
based compensation was USD 7.8 million, compared
to USD 7.6 million in 2021. Please see the section on
Alternative Performance Measures for more details.

EBITDA and Operating profit
USDm

EBITDA

EBITDA margin

Short-range EBITDA

Short-range EBITDA margin

Operating profit (EBIT)

EBIT margin

2022

205.7

2021

124.7

26.5%

20.4%

262.2

34.9%

161.6

20.8%

175.6

29.6%

86.9

14.2%

Change

64.9%

6.1%

49.3%

5.3%

85.9%

6.6%

Earnings before interest, tax, depreciation, and
amortization (EBITDA) amounted to USD 205.7 million,
an increase from USD 124.7 million in 2021. The
corresponding EBITDA margin increased 6.1 percentage
points to 26.5%.

Short-range EBITDA totaled USD 262.2 million equivalent
to a margin of 34.9% in 2022. This compared to a Short-
range EBITDA of USD 175.6 million and a margin of
29.6% in 2021.

Depreciation and amortization amounted to USD 44.1
million in 2022, compared to USD 37.8 million in 2021.

Operating profit (EBIT) amounted to USD 161.6
million, compared to USD 86.9 million in 2021. EBIT
margin increased to 20.8% in 2022 from 14.2% in 2021.

Net financial items
USDm

Net interest

Net financial items

Total

2022

4.9

0.6

5.6

2021

-0.4

0.7

0.3

Nordic had net interest gain of USD 4.9 million in 2022,
compared to net interest expense of USD 0.4m in 2021.

The Group recognized tax charges of USD 44.8 million,
corresponding to an average tax rate of 26.8%. This
compares to USD 16.1 million and an average tax rate of
18.4% in 2021.

The Group’s statutory tax rate is 22%. Historically
average tax rate has been lower due to settlement of
equity compensation to employees, not recognized in
the profit and loss. In 2022 however, this is offset by
foreign exchange gains in statutory tax return.

Tax payable amounted to USD 43.9 million, compared
to USD 17.4 million in 2021, with the balance reflecting
changes in deferred tax and tax benefit.

Financial position
Balance sheet
Nordic has total assets of USD 776.2 million at the end
of 2022, of which USD 674.1 million are in current assets
and USD 102.1 million in non-current assets.

These assets were financed by total equity of USD 583.5
million at the end of 2022, non-current liabilities of USD
15.5 million and current liabilities of USD 177.2 million.

Current assets were USD 674.1 million at the end of 2022,
compared to USD 488.0 million at the end of 2021. This
included cash and cash equivalents of USD 379.1 million
at the end of the year, up from USD 279.3 million at the
end of 2021.

Inventory increased to USD 102.1 million from USD 54.9
million at the end of 2021. The increase comes from
technologies not impacted by current wafer constraints.
Accounts receivables increased to USD 175.1 million
from USD 141.7 million at the end of 2021, due to
higher revenues.

Profits and taxes
USDm

Profit before tax

Income tax expense

Net profit after tax

2022

167.2

-44.8

122.3

2021

87.3

-16.1

71.2

Overall, net working capital amounted to USD 167.9
million, compared to USD 108.4 million at the end of
2021. Measured as a percentage of full year revenue, net
working capital increased to 21.6% from 17.8% at the end
of 2021. This is mainly a result of higher inventory and
tax payable.

Fixed assets totaled USD 35.6 million at year end,
up from USD 33.9 million in 2021. Software and other
intangible assets decreased to USD 11.7 million from 15.8
million. Capitalized development expenses decreased
to USD 26.6 million from USD 31.5 million at the end
of 2021.

Total shareholders’ equity amounted to USD 583.5
million at the end of 2022 up from USD 458.2 million at
the end of 2021. The Group equity ratio was hence 75%,
compared to 77% at the end of 2021.

Total liabilities amounted to USD 192.7 million, compared
to USD 138.6 million at the end of 2021. Non-current
liabilities increased to USD 15.5 million from USD 14.9
million. Lease liabilities of USD 14.9 million are included
in the non-current liabilities.

Current liabilities increased to USD 177.2 million from
USD 123.7 million. The increase is mainly explained by
higher accounts payable, short-term employee benefit
obligations and taxes.

Cash flow and funding
USDm

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

Cash and cash equivalents 31.12

2022

2021

142.7

-30.6

-11.3

-1.0

99.8

279.3

379.1

95.8

-30.7

-27.3

-1.1

36.8

242.5

279.3

Cash flow from operating activities was USD 142.7
million in 2022, compared with USD 95.8 million in 2021.
The improved operating cash flow is a result of higher
earnings and higher net working capital.

Cash flow used for investing activities was an outflow
of USD 30.6 million in 2022, compared to an outflow of
USD 30.7 million in 2021. Capital expenditure decreased
to USD 24.1 million from USD 25.1 million, including
software, whereas capitalized development expenses
increased to USD 6.5 million from USD 5.6 million. The
change relates to size and number of projects in final
development stage. Capitalization level is reflecting
anticipated scope of new technologies, functionalities or
products soon to be ready for mass market.

Cash outflow from financing activities was USD 11.3
million in 2022, mainly reflecting payment of lease
liabilities. In comparison, there was a cash outflow
of USD (27.3) million in 2021, mainly reflecting cash
settlements of employee options contracts.

Including the effect of exchange rates, net change in
cash and cash equivalents was a cash inflow of USD
99.8 million in 2022, compared to USD 36.8 million
in 2021.

Cash and cash equivalents increased to USD 379.1
million at the end of 2022, from USD 279.3 million at
the end of 2021. 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
sustainability linked RCF of USD 150 million. All included,
available cash amounted to approximately USD 529
million at the end of 2022, compared to approximately
USD 348 million 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
Group’s strategic priorities and growth opportunities.
The Board of Directors assesses the liquidity position
as adequate given the Group's current activity level,
investment plans, and business outlook.

Nordic Semiconductor recognizes the
impact of our business and products
on the environment, the planet,
and society. Being environmentally
responsible and sustainable is crucial
for achieving long-term success, as
we produce world-class products
contributing to low-carbon, climate-
resilient economy.

Environmental management

Climate change
and GHG emissions

Hazardous substances

Resource reduction

29
30
32

Description of less material topics

TCFD reporting

Environmental performance

Environmental Management 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.

We are 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 greenhouse gas (GHG)
emissions, resource and water consumption, and
the use of hazardous materials in our products,
as well as developing and using environmentally
friendly technologies

■ Promote environmental responsibility and ensure that

As a fabless company, engaging with suppliers is
relevant to decision making and risk analysis. Nordic
regularly analyzes data from manufacturing partners,
and uses supplier audits to follow up on compliance
with standards, specifications, and legislative
requirements. Results and measurements from the
environmental programs are reviewed annually in the
Management Review.

Raising awareness on environmental issues relevant
to the Group is part of the mandatory introduction
program for new employees. Employees who work with
environmental issues undergo designated training for
relevant topics.

Nordic has set a target of zero environmental
compliance incidents. Potential environmental
incidents are handled through Nordic’s non-conformity
procedures, with root cause analysis and corrective and
preventive actions.

Environmental targets
Targets for 2022:
■ Scope 2 emission reduction by 50% vs 2021 -

achieved (54.7% reduction)

our suppliers live up to Nordic’s environmental standard

■ Scope 3 emission reduction by 20% vs 2021 -

■ 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

Nordic's Environmental Management System is ISO
14001 certified. All Nordic manufacturing partners must
be certified to this standard, as well as compliant
with the RBA Code of Conduct and its provisions on
environmental topics.

Internal and external environmental aspects are
systematically analyzed by a cross-functional team in
the organization. Identified environmental aspects are
evaluated in terms of risks and opportunities, including
potential legal requirements related to them.

achieved (21.5 % reduction)

■ 80% of prototyping platforms with recyclable plastic

casing - not achieved due to an unexpected production
delay (71 %)

■ 5% of device containers with recycled plastic -

achieved (6.5 %)

Targets for 2023:
■ Reduce Scope 2 GHG emissions by 50% compared

to 2022

■ Validate and commit to new climate targets with the
science-based target initiative (SBTi) within 2023

■ Offset Scope 3 GHG emission intensity to ensure 40%

reduction of emission/revenue vs 2020

■ Reduce GHG emissions generated from air travel by

50% compared to 2019

■ 40% of device containers with recycled plastic

Climate change and GHG emissions
Climate change poses significant risks that require
society and business to act on a global scale. The
semiconductor industry is highly dependent on energy
and clean water, and we recognize the mutual impact
on and risks from climate change. This topic is a
natural part of our materiality analysis and corporate
risk assessments.

Climate change represents a low risk for Nordic’s own
operations, but there are relevant risks from climate
change in our supply chain. Manufacturing partners are
faced with challenges, both in the form physical risks
(such as extreme weather conditions) or transitional
risks (such as legislative requirements), depending on
manufacturing location. More details about Nordic's
climate-related risk assessment and mitigations are
described in the TCFD disclosure in this report.

To slow climate change, reduction of GHG emissions
is crucial in order to meet stakeholders' expectations
and to reduce potential risks. In 2015, Nordic introduced
renewable energy usage in its offices. In 2020, we
introduced a dedicated GHG emission reduction
program. This program aims to reduce GHG emissions
in the Group’s direct operations and outsourced
manufacturing processes within established time targets.
The Group's fabless structure limits feasible reduction
mechanisms to Guarantees of Origins (GOO), renewable
energy certificates (I-RECs) and, where these options are
unavailable, carbon credit offsets.

Setting and achieving ambitious reduction targets over
the last two years has prepared Nordic to develop and
work towards long-term targets through the Science
Based Target initiative (SBTi). We aim to complete
validation of targets with the SBTi in 2023 and provide
a realistic, long-term, decarbonization trajectory for the
Group. (www.sciencebasedtargets.org)

Scope 1 GHG emissions
Scope 1 emissions include all direct emissions from
the Group and its operation. Due to Nordic's fabless
structure and very limited group-owned and controlled
GHG sources, Scope 1 GHG emissions are minor
and generated only in abnormal situations, such as
refrigerant leakage from the Group's test laboratory
cooling system. In 2022, Nordic had no Scope 1
GHG emissions.

Scope 2 GHG emissions
Scope 2 GHG emissions include indirect emissions
from purchased electricity and heating. Emissions
are calculated based on published tables of energy
emission factors, and where applicable, directly
from energy providers. Offices with fewer than 10
employees are excluded from our Scope 2 GHG
emissions reporting.

In 2022, we reduced our Scope 2 GHG emissions
by 54.7%, compared to 2021. Nordic has purchased
renewable energy (verified by Guarantee of Origin),
I-RECs, and carbon credit offsets to achieve this
reduction. In 2022, 77% of all purchased energy
for direct operations originated from renewable
energy sources.

Scope 2 location- and market-based GHG emissions.
Market-based emissions are based on the electricity Nordic has
purchased. Location-based emissions are based on local grid
factor emission.

Scope 2 GHG emission reductions and emissions after
implementing reduction initiatives

Scope 1 + 2 GHG emissions by site and revenue

From 2021 to 2022, energy usage at our sites has
increased by 15%. This is primarily due to the organic
growth of the Group, and increased reliability testing in
our lab in Taiwan.

As of today, four of our offices, comprising 46,7%
of our office areas, 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 ensures that buildings are
built and operated in a way that reduces the need
for electricity, water and heating. In addition to the
energy procured from electricity providers, Nordic's
headquarters in Trondheim has solar panels onsite,
producing 30 MWh annually.

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendicesOur groupFinancial EnvironmentSocialGovernanceOutlookConcluding remarksApplying the lean concept to the entire business
structure, Nordic 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 in turn leads to
less GHG emissions.

Business travel is permitted again following the Covid-19
pandemic, increasing 2022 emissions from air travel to
67% of pre-Covid levels (2019).

Scope 3 GHG emissions related to business travel and
transportation.

Scope 2 energy consumption by source

Scope 3 GHG emissions
Scope 3 encompasses any other indirect emissions from
purchased goods and services, such as outsourced
production, travel and transportation.

Scope 3 GHG emission reductions and emissions after
implementing reduction initiatives.

Scope 3 GHG emissions related to production
Data is gathered annually from subcontractors when they have
completed 3rd party verification in Q2. The data for 2022 is included
as estimates in this report. These estimates are based on 2021 emission
factors from subcontractors and our records of production volume
in 2022.

In 2022, Nordic's Scope 3 GHG emissions decreased
by 21.5% compared to 2021. This was achieved by
the purchase of renewable energy in the form I-RECs
wherever possible. However, in 2022, regulatory changes
in Taiwan made I-RECs unavailable on the private
market. Consequently, Nordic purchased carbon credits
to meet Scope 3 targets. Carbon credit projects were
chosen carefully to ensure credibility and quality, with
a high impact on climate change mitigation and other
sustainable goal initiatives around the world.

Nordic Semiconductor carbon offset projects

Delta blue carbon project:
This project delivers GHG removals through
afforestation/reforestation/re-vegetation of
350,000 ha in south-eastern Pakistan. More
info.

Rimba raya biodiversity reserve project: The
project is achieving GHG emission reductions
through avoiding deforestation and
consequent conversion to palm oil plantation
in Borneo. More info.

Being a fabless semiconductor company, close
communication and cooperation with our products'
manufacturing partners are crucial to managing
hazardous substances. We regularly address
environmental product compliance and hazardous
substance use with our manufacturing partners. We
communicate our standards through our Hazardous
Substances Specification for Suppliers. Manufacturing
partners must provide a signed confirmation of
compliance with the Hazardous Substances Specification
for each revision of the specification.

A third party verifies product content through
hazardous substance testing. Certificates for Hazardous
Substances testing and Material Composition reports
for all products are available on our website (www.
nordicsemi.com).

Nordic has controls for design and production processes
to ensure compliance to environmental requirements,
including the following:

■ RoHS (Restriction of use of Hazardous Substances)

■ REACH (Registration, Evaluation, Authorization and

Restriction of Chemicals)

■ EU POPs regulation (Persistent Organic Pollutants)

■ California Proposition 65

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

In 2022 there were no findings of prohibited substances
above limitations, or any other environmental
product compliance incidents in any Nordic
Semiconductor products.

Resource reduction
We seek to promote a circular economy in our
product design and manufacturing by conserving
natural resources and raw materials, avoiding
hazardous substances, and preferring recycled and
recyclable material.

Scarcity of natural resources and conservation of raw
materials are important from both an environmental
and financial perspective. By replacing gold with copper
in almost all products, Nordic has been able to reduce
costs and environmental impact without sacrificing
product quality or performance.

We continuously seek ways to integrate sustainable
materials into our products. Thingy:53, launched in June
2022, is Nordic's first prototyping platform with casing
made from recyclable plastic and accounted for 71% of
all prototyping platforms produced in 2022.

We are also focused on a circular approach to product
packaging. In 2020, Nordic started to require all kits to
have packaging made of Forest Stewardship Council
(FSC) certified, recyclable cardboard. 98% of all kits
produced in 2022 have FSC certified packaging.

Plastic reduction program
In 2021, Nordic established a plastic reduction program
to reduce raw material consumption and increase
material reuse and recycling. Within this program, we
work with our manufacturing partners to gradually
increase the share of device containers made from
recycled plastic.

The program started in 2022 with one of our
manufacturing partners by qualifying and introducing
reels made from recycled plastic for QFN devices.
In 2023, this program will be expanded to another
manufacturing supplier as we begin incorporating CSP
devices into this program.

Measurements and targets related to eco design

Indicator

Percentage of prototyping platforms with recyclable plastic casing1

Percentage of development kits with recyclable packaging (cardboard)

Percentage of produced development kits with FSC certified cardboard packaging

Percentage of device containers with recycled plastic

Target 2023

—%

100%

40%

2022

71%

100%

98%

6.5%

2021

—%

100%

99%

—%

2020

—%

100%

84%

—%

Measurements and targets related to eco design
1 Thingy:53, launched in June 2022, is Nordic's first prototyping platform with casing made from recyclable plastic.

We have implemented procurement process for
purchase of products and services not directly related
to the production of our products. This includes
evaluating and choosing suppliers based on their ethical
and environmental profile, from reviewing available
information such as office and marketing material.

Description of less material topics
Waste management and recycling
Nordic's waste impact is mainly related to the Group's
operations and outsourced manufacturing processes.
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 have routines in place for sorting and disposing
of different types of waste across our operations. This
includes, but is not limited to, EE-waste, hazardous
waste, and packing material. Certified waste handling
and recycling companies manage the waste we
generate in accordance with local legal requirements.
Total general office waste from our headquarter office in
Trondheim in 2020 was reported as 1.78 (kg/m2) which is
equal to 8% decrease compared to 2021.

Nordic is working continuously with its manufacturing
suppliers to minimize the number of scrapped devices.
Scrapped components from the manufacturing process
are sorted and recycled according to local waste
regulations. This is managed by our qualified suppliers,
who are certified to operate in compliance with the ISO
14001 standard.

Product end-of-life treatment
Nordic's products are utilized and incorporated as
components in various end-products and applications.
The responsibility for disposing of the finished products
lies with the producer of the finished product, this topic
is less material to Nordic.

Water
Nordic submits the CDP Water questionnaire
annually. As a fabless company, water-related risks
such as scarcity and wastewater are of low concern
in our direct operations. Water consumption in our
operations is limited to overhead water usage (cleaning,
drinking, washing) for our offices and laboratory
operations. All water used by the company is supplied
by municipalities.

Reduced access to clean water is a risk for some of
our subcontractors, specifically droughts and floods
that can limit production capacity. This is assessed as
part of overall Group risk management and business
continuity planning.

Air pollution
In accordance with Nordic's environmental policy, we are
committed to minimizing air pollution, such as ozone-
depleting substances. As a fabless company, most
air pollution comes from outsourced manufacturing
processes, and therefore, the risks to direct operations
are low.

We communicate air pollution restrictions to our supply
chain through our Hazardous Substances Specification
for Suppliers. Manufacturing partners pledge adherence
to the requirements stated in the specification.

l Low risk
l Medium risk
l High risk

↗ High opportunity
→ Medium opportunity
↘ Low opportunity

Transition risks and opportunities related to the transition to a low carbon-economy

Risks
Policy and legal l Resource/Product energy efficiency ↗

Opportunities

The regulatory risks relevant to Nordic's value chain fall under the categories of ESG Reporting
Regulations (such as CSRD and Taxonomy) and carbon taxes in manufacturing locations. Nordic's risk
assessment system considers, evaluates, and mitigates these risks. The Group's strategy is to partner
with leading manufacturing suppliers and ensure that they have compliant regulatory systems in
place. The risk management system also includes binding climate-related contractual requirements
from customers to minimize the risk of violating these agreements.

As a leading Bluetooth LE group, Nordic has a competitive advantage in improving energy efficiency
and management through our low-energy designs. This presents a unique opportunity to capitalize
on the market's demand for lower energy consumption in end-user devices and expand the energy-
saving capabilities of our solutions, such as smart lighting and energy harvesting. By targeting and
improving the resource efficiency of our customers’ end devices, Nordic upholds its commitment to
addressing climate challenges.

Technology l Energy source →

As a group that outsources its manufacturing, our suppliers' ability to adapt to and support new
technologies aimed at reducing carbon emissions will be our main concern. Hence, Nordic's business
model is not directly impacted negatively by the technological shifts towards a low-carbon economy,
which allows us to take advantage of these advancements without bearing the risks ourselves.

Nordic is working to increase the use of renewable energy and reduce GHG emissions in its offices. In
Scandinavia, most of the office energy comes from renewable sources. Over 50% of employees work
in energy-efficient buildings with certifications like BREEAM and LEED, and the Group's subcontractors
are focused on reducing energy consumption and using renewable energy in component production.

Market l Market ↗

The production of semiconductors requires a significant amount of energy. Our markets indicate
a growing demand for products with a low carbon footprint. Nordic has taken action to lower its
carbon footprint by using renewable energy and other reduction strategies. In 2023, Nordic will create
a robust plan for achieving net-zero emissions aligned with the Science Based Targets initiative (SBTi).
This plan is part of Nordic's long-term strategy to minimize the risk of losing market share.

Reputation l

Environmental and climate change impact is crucial for our brand recognition. Poor performance
regarding climate change and GHG emissions (and our suppliers) could harm our brand value
and lead to loss of customers due to changing public attitudes towards climate change. Nordic's
strategy involves maintaining close relationships with suppliers, conducting annual carbon accounting,
regularly reviewing operations, implementing GHG reduction initiatives, and being transparent
in reporting.

The swift global transition to a low-carbon economy provides Nordic with an opportunity to grow
its market segments by offering products and technologies that help mitigate climate change
globally. The combination of low energy consumption in our products and the capabilities of IoT for
resource efficiency (such as smart sensors, cellular IoT, energy harvesting, and more) make Nordic's
products and services attractive solutions for both the public and private sectors in developed and
developing countries.

Acute physical events from climate change could affect our manufacturing suppliers located in
Southeast Asia, where tropical cyclones and flooding have the potential to damage production
facilities and infrastructure. Such events are likely to impact Nordic’s production capacity and delivery
capability in the short-to-medium term, potentially negatively impacting Nordic financially.

Chronic risks (long-term shifts in climate patterns) l

Long-term changes in climate patterns that affect acute weather event frequency, as well as events
like droughts and flooding, can potentially impact Nordic Semiconductor’s suppliers, their production
capacity, and our ability to deliver products to our customers. There is a risk of insufficient clean
water access in our supply chain. We have already experienced incidents of water rationing within
some of the countries in which our suppliers operate.

Nordic has established a short to medium-term strategy for reducing the risk of supply disruptions
caused by natural disasters or other severe weather events. In the short term, we maintain a reserve
of wafers or finished products to address any temporary shortage. For medium-term risk mitigation,
Nordic uses a second-sourcing strategy to secure insurance against widespread supply disruptions.
For long-term risk mitigation, our key manufacturing partners have contingency plans to reduce such
chronic risks.

Number of environmental incidents

Suppliers with documented environmental policy

Percentage of new suppliers that were screened using environmental
criteria

Hazardous waste - chemicals and batteries (tons)1

1 Hazardous waste measurement for Nordic's offices in Norway only.

Target 2023 YoY change

100%

—%

194%

2022

100%

0.16

2021

100%

0.05

2020

100%

0.05

Indicators related to energy and GHG emissions performance

YoY change

2022

2021

2020

Energy

Nordic Semiconductor offices' energy use (MWh)

Renewable energy purchase ratio for offices (%)

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

Scope 1 GHG emissions (tons CO2e)

Scope 2 GHG emissions after reduction initiatives (tons CO2e)1

Scope 2 GHG emissions reductions from GOO offsets (tons CO2e)2

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

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

Scope 1+2 GHG emissions per revenue (tons CO2e/USD million)

Scope 3 GHG emissions

Scope 3 GHG emissions after reduction initiatives (tons CO2e)3

Scope 3 GHG emissions per revenue (tons CO2e/USD million)

20.0%

17.9%

9.7%

(3.0)%

(5.7)%

—%

(54.7)%

55.2%

(61.1)%

(58.6)%

(64.4)%

(21.5)%

(38.3)%

5177.03

4314.05

3180.19

78%

0.19

3.78

6.67

226.2

273.7

0.17

0.01

0.3

66%

0.17

3.67

7.07

498.9

176.3

0.42

0.02

0.8

69%

0.16

4.01

7.85

3.9

375.9

173.4

0.48

0.02

0.9

33231.1

42.8

42312.8

58994.3

69.3

145.6

Measurements related to energy and GHG emissions
Note that several measurements related to Scope 3 GHG emissions are ready at the end of Q2 due to the
reporting schedules of external stakeholders. Therefore, some of the reported numerical are uncertain at the
time of publishing this Annual Report.

1 Reduction initiatives include purchased renewable energy (backed by GOO), I-RECs and carbon credit offsets
for Nordic operations. The base year for Scope 2 GHG emission reduction calculations is 2019.

2 GOO offset of excess renewable energy from Trondheim office allocated to offices in Krakow and Oslo.

3 Reduction initiatives include purchased renewable energy (backed by I-RECs) and carbon credit offsets 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.

Nordic Semiconductor is a growing business with
employees and offices, customers, and suppliers in
different parts of the world. We are proud of our diverse
workforce. Focusing on diversity, equity, and inclusion
throughout the entire employee journey is imperative to
attract and retain highly skilled personnel. Therefore, it
is an important part of realizing our strategic business
objectives. Equally important is the Group's ambition to
foster a healthy, safe, and motivating work environment,
amplify engagement and contribution, and avoid human
and labor rights violations.

Diversity, equity & inclusion

Human capital development

Employee Engagement

Health & Safety

Responsible supply chain

Social performance overview

Nordic Semiconductor works continuously through
diversity, equity, and inclusion (DE&I) initiatives and
introduced new measures to improve both consciousness
and data collection during 2022. For example, we
used language editing software when creating job
advertisements in May 2022 to ensure inclusive
language on employer branding material. The software
identifies potentially loaded words that could discourage
diverse qualified talent to apply, (language showing
bias towards gender, age, ethnicity, disability and
neurodiversity). It then proposes inclusive alternatives.
By the end of the year, the weighed average score on
inclusive language was 81, compared to the predefined
target of 80 on a scale between 1-100. Recruitment
training with managers during 2022 has, among other
topics, focused on DE&I through bias awareness and
understanding perspective opportunities.

We introduced a new employee engagement survey
platform in 2022. This allows continuous feedback and
monitoring of performance on specific measures, on
an average scale mode between 0 to 10, and on an
eNPS scale mode between -100 to 1001. The Group
conducted a global, confidential, engagement survey
in October 2022 with an employee participation rate
of 89%. The tool provides all people managers with a
team dashboard, while all employees have a personal
dashboard. This enables continuous assessment of
development in the years to come.

The platform also provides a confidential feedback and
dialogue function between employee and manager. A
heat map presents an overview of results, highlighting

improvement opportunities for the different levels and
parts of the organization.

The 2022 survey revealed that employees regard Nordic
as a diverse workplace, with an overall DE&I score
above the market benchmark for the technology sector.
Despite consistently high scores across demographics,
there is a minor difference between new joiners and
those with more than ten years' experience, compared
to those with between 1-10 years experience, where the
latter group gives an overall lower rating.

8.5

0,2 above Technology benchmark

Good: In the middle range of the technology sector

Promoters: 61% (709)

Passives: 28% (322)

Detractors: 11% (132)

1 Net promoter score (NPS) is a market research metric based on a
single survey question asking respondents to rate the likelihood that
they would recommend a company, product, or a service to a friend
or colleague on a scale from 1-10. Employer net promoter score (eNPS)
measures employee satisfaction and loyalty within organizations.
The survey NPS mode does not take into account scores between 7-8
into its calculation. Furthermore, it does not use the raw scores in its
calculation, but rather the percentage of the two groups (promoters
and detractors). In this report, the average scale mode is used.

Employees are encouraged to report any signs of
potential discrimination or ethical misconduct through
the Group’s whistleblower channel, further explained in
the governance chapter. The annual engagement survey
score indicates a group culture where employees feel
they can be themselves without fear of discrimination,
offering fair opportunities for all employees across
the world.

Workforce composition
Nordic has a culturally diverse and highly specialized
workforce of 1,435 employees, where technical
competence, industry experience, and market
understanding are common denominators. With 49
different nationalities represented at the Group’s
headquarters and 62 nationalities worldwide, we are in
a unique position to foster an inclusive culture where
different perspectives are valued and utilized, and
mutual respect is a matter of course. The Group saw
headcount growth of 20% in 2022, compared to 22%
in 2021.

R&D engineers represented 76% of total headcount
in 2022, with 17% growth during the year. Sales &
Marketing's headcount comprised 9% of the workforce
with a growth of 15.5%, while Supply Chain, 6% of total
headcount, increased by 22%. At the end of 2022, 823
(57%) employees were employed outside of Norway,
indicating proportionally stable growth in and out of
Norway since 2021 (57%).

Nordic Semiconductor’s Non-Discrimination Policy

All Nordic Semiconductor
employees shall be treated
equally and with dignity,
courtesy, and respect

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
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
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 whistleblowers.

Workforce composition

2022

2021

Employees by department & gender distribution

Executive Management Team

Female

Male

Business support1

Female

Male

Research and development

Female

Male

Non-binary

Sales

Female

Male

Supply chain

Female

Male

Total

Number of
employees

% of total
employees

Number of
employees

% of total
employees

148

1 083

116

966

107

1 435

0.7%

0.1%

0.6%

10.3%

4.8%

5.5%

75.5%

8.1%

67.3%

0.1%

7.5%

0.6%

6.8%

6.1%

2.6%

3.5%

925

839

136

113

1 197

0.8%

0.2%

0.7%

4.5%

2.3%

2.2%

77.3%

7.2%

70.1%

—%

11.4%

1.9%

9.4%

6.0%

2.4%

3.6%

1 For 2021, Marketing was part of Sales, however included in Business support in 2022.
In 2022, Business support includes: IT, Marketing, Finance, Legal and compliance, People and communication, Product Management and Quality

When measuring employee engagement, we see an
overall consistency across all age groups. There is a
minor difference in employee engagement between
age groups, with employees over 40 having a slightly
higher average than younger employees. This might be
explained by a larger proportion of employees in the
higher age segment having longer tenure, and thus
increased loyalty towards the Group. Average tenure
across the Group is 5 years. The survey also validates
that employees feel supported by their immediate
management, with an overall average score of 8.7 on
management support (0.1 above market benchmark
within the technology sector). Scores are evenly
distributed between age groups.

Employment opportunities
Nordic hires and develops competent workers as part of
a permanently employed workforce. Nevertheless, the
Group has needed to accommodate other employment
opportunities to attract required resources, due to a
talent shortage in the market and time-constrained
projects. All workers engaged by Nordic, regardless of
employment affiliation, are entitled to a healthy work-
life balance.

Temporary workers
Nordic engages a significant number of students in
internships, placements, and more every year to help
students graduate with relevant industry knowledge.
Nordic also employs temporary workers either directly
or through agencies to cover in cases of temporary
absence, such as parental leave. By year-end 2022,
Nordic had 83 temporary workers (5.5% of workforce),
including students and interns, with a gender split of
67% male and 33% female. Excluding students and
interns, Nordic had 11 temporary workers by year-end
2022, with a gender split of 54.5% male and 45.5%
female (9 of the 11 were employed in 2022).

Part-time employment
Nordic strives to offer full-time employment in all
positions, but offers part-time individual accommodation
to the extent it is possible. In 2022, 2.1% of Nordic's
permanent employees were employed in part-time
positions (excluding interns), either on employee request
or in accordance with medical advice. The gender split
was 24 men and 6 women (80% versus 20%), 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.

Early-in-Career
Collaborating with universities and educational
institutions and independently offering student
opportunities is important to Nordic. We want to
ensure that student workers graduate with relevant
competence, in turn ensuring a steady talent pipeline for
the Group. Nordic recruited 110 students in 2022, with
a gender split of 72% male and 28% female. Moreover,

we recruited 47 graduates in 2022 (81% male and 19%
female). This comprised 15% of all hires, a decrease from
22% (59 graduates) in 2021.

Leadership
Nordic has 231 managers1, with a gender split of
86% male, and 14% female. During 2022, 14% of the
employees being promoted or hired into management
positions were women. 59% of men and 65% percent of
women in R&D were promoted to a higher level on the
career ladder.

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

Managers by department

Research and development

Male

Female

Rest of organization

Male

Female

Number of
managers

163

150

% of
total

71%

92%

29%

72%

28%

1 Managers include business function managers, team managers, group
managers, division managers, and executive management.

Cultural diversity
During 2022, Nordic in Norway attracted more than
43% percent of its new hires from abroad (53% in 2021).
Nordic branches in the UK and Sweden relocated,
respectively, 26% and 50% of staff from abroad. We
consider relocation an indication of a strong global
employer brand and an international talent pool, and
an indication of fierce competition for local talent.
Successful employee relocation requires us to focus on
developing both leadership and communication skills.
We must also maintain an inclusive group culture where
employees of all backgrounds are valued for who they
are. The annual engagement survey score indicates
a group culture where employees feel accepted and
have a sense of belonging, with scores above market
benchmark on inclusiveness.

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendicesOur groupFinancial EnvironmentSocialGovernanceOutlookConcluding remarksGender diversity
Nordic has an ambition to minimize our internal gender
gap, a recognized challenge within the industry for
both competitors and partners. By year-end 2022, the
female share of employees was 16.3%, an improvement
from 14% in 2021. In order to increase the proportion of
women in our workforce, we have engaged in several
initiatives during 2022, such as inclusive language
in job advertisements, and engaging directly with
female students for support in their career choices.
Consequently, we see an improvement in number of
applications from female candidates, with an increase
from 18% to 24% from 2021, and in the number of
women interviewed, an increase from 15% to 24%. This
is also further reflected in an increase in female hires,
an overall improvement with 21.8% of new hires being
female in 2022 compared to 18.5% in 2021. In R&D,
female hires have increased with 36% from 2021 to 2022.
In Norway, female hires have increased by 27%. Please
see the table Employee growth with regard to gender
diversity for a further breakdown and comparable data
from previous years.

Category

Male

Female

Gender Pay
Ratio1

Overall (excl EMT)

1202

233

Executive Management Team
(EMT)

Business support2

Research and development2

Sales2

Supply Chain2

967

116

78%

76%

71%

88%

79%

42%

Salary development
The Group has a global standardized framework to
determine and adjust salary levels. Employees are
expected to advance through a career ladder with fixed

Gender pay ratio statistics for 2022, by category
¹ Average female salary / average male salary
² Executive management team has been excluded to avoid
double counting

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendicesOur groupFinancial EnvironmentSocialGovernanceOutlookConcluding remarksLabor unions
Nordic support and recognize freedom of association
and the right to organize. The Group encourages
and facilitates global employee representation and
involvement. 23.7% of our employees are covered by
formal collective bargaining agreements, which are
based on statutory requirements at the national level of
the sector in which Nordic operates. Other employees
are represented through an interactive dialogue with
elected representatives. Working conditions and
terms of employment are proposed and based on
benchmarks from professional salary survey providers.
Sources include data from organizations with collective
bargaining agreements. Nordic positions our working
conditions and terms of employment at par or above
regional statutory requirements, or in accordance
with collective bargaining agreements from other
comparable organizations.

Human capital development
At Nordic Semiconductor, we recognize the critical
value of our people driving continuous technological
innovation in a fiercely competitive business. This allows
us to reach our vision of “Simplifying lives through all
things connected”. Attracting, integrating, and retaining
highly specialized and diverse talents are the pillars of
our approach to human capital.

Talent acquisition
In 2022, Nordic had an organic growth in headcount of
20%, equivalent to 323 new employees across the world.
Major challenges in talent acquisition remain a global
talent shortage and maintaining our ability to attract
and hire the technical skill-sets required.

Recruitment
Recruitment is the responsibility of leadership, requiring
them to define job descriptions, screen, assess, and
onboard new talents. The People & Communication
function supports this. In 2022, more than 300 vacancies
were advertised and 10,000 applications were received.

Talent development
To enhance the relationship between employee and
manager and ensure employee involvement in setting
performance objectives, we encourage and facilitate
regular appraisal conversations between managers
and employees. The purpose of the dialogue is to
foster employee engagement, drive performance, and
ensure talent development. In 2022, 64% of employees
formally completed annual appraisal conversations.
One contributing factor to a low percentage is that
the Human Capital Management system is not always
used for this purpose. The implementation of the new
engagement survey tool during 2022 provided leaders
and managers with a platform for confidential feedback
dialogue, contributing to even better conversations and
development opportunities.

Performance culture
According to internal data, employees know what
they are expected to deliver, with scores above the
market benchmark for goal setting. This score suggests
they are able to link individual contribution towards
group objectives, further supported by high scores in
meaningful work.

Job autonomy is key to our highly specialized and
competent workforce. Internal data indicates that
employee priorities have transformed over the last three
years, where flexibility and the desire to work from
outside the office location are post-pandemic employee
expectations. Balancing employee expectations with
business needs is challenging, reflected in a score
under the market benchmark in our engagement
survey. Nevertheless, the data confirms that employees
experience challenging tasks.

Leadership training and development
The pillars of our approach to human capital and
business success are attracting, integrating, and
retaining highly specialized, diverse talent. This requires
managers who embrace group development, who can
promote creative synergies in their teams and across
the organization. Self-awareness, strong communication
skills, and intercultural competence are critical assets for
any manager at Nordic.

Leadership training
Nordic encourages and facilitates internal recruitment
and promotions in leadership responsibilities when
possible. The Group uses both internal and external
training and resources to train and build leadership
capabilities amongst new and experienced managers.
The Group structure also requires global alignment
on leadership principles, as well as local compliance
with national legislation and market practices. Nordic's
management handbooks outline country-specific legal
and regulatory requirements. Managers are expected
to advocate and adhere to these frameworks, policies
and practices. Nordic strengthened its capability and
framework for training and development in 2022, with
33% of all managers taking part in recruitment training,
including unconscious bias awareness.

Leadership development
Self-awareness, strong communication skills and
intercultural competence are critical assets for any
manager at Nordic. In 2022, 10 executives attended
external development courses. External contributions
were included in internal management courses and
individual coaching. The initiatives included high impact
communication, psychological safety, and unleashing
talent in others. The long-term ambition is to leverage
relevant group transformation through managers
embracing disruption and change, to reduce risk, and
to increase productivity and employee satisfaction.
Equivalent development opportunities will be tailored
for our leadership community as part of our continuous
organizational development. In addition to these
measures, identifying, selecting and developing qualified
successor candidates for executive and senior positions
is crucial for business success and continuity.

Career development
Nordic engages a large number of students every year.
Graduates remain an important candidate segment
for group growth. Consequently, training and career
development for entry level employees is part of
leadership responsibility.

The average tenure in the Group is five years, with
more than 12% percent of employees working for Nordic
for more than ten years. Considering the Group's
substantial growth over recent years, these numbers
suggest that employees are able to build a career and
take on new responsibilities within the Group. More than
40 employees were promoted to managerial positions
in 2022, 10% of which were women. The gender split in
the total numbers of external managerial hires was 75%
male employees and 25% female employees.

Analysis of R&D career development from developer
to principal levels from 2018-2022 shows no significant
difference in career progression due to gender
or ethnicity.

Retention
In 2022, the employee turnover rate was 6.6%, well
above our operational target of 5%, and up from
5.6% in 2021. In total, 82 employees left the Group
in 2022, of which 8.4% were women. Nordic’s People
& Communication function encourages and carries
out exit interviews with employees to obtain objective
information and ensure a professional experience
throughout the entire employee journey.

Nordic conducted a global employee engagement
survey in fall 2002. We saw an overall employee
engagement score of 8.4 (average scale from 1-10) with
a distribution of 65% promoters, 27% passives and 8%
detractors. A further breakdown reveals a 8.0 score on
loyalty and 8.4 on satisfaction, all 0.5 above the market
benchmark and in the top 25% of companies within the
technology sector.

The Group has committed to defined targets for 2023,
where the ambition are scores above the technology
benchmark on the following indicators;

■ Employee Engagement

■ Diversity & inclusion

■ Health and well-being

Social
Nordic has established an employee-driven social
committee at some of its larger offices. These groups
receive a formalized social budget from Nordic. The
social committee is responsible for various activities
throughout the year, including sports and social
gatherings. In addition, the Group arranges a variety
of events, incorporating local cultural celebrations and
initiatives, as well as global events, through the year.

Work-life balance
Nordic is committed to employee well-being and work-
life balance. We operate with a flexible core working
hour policy adapted to local market practices, which
allows employees to vary their start and finish time in
agreement with their manager. This allows employees to
adjust their working hours according to personal needs,
encouraging them to find a healthy balance where work

life can adapt to everyday life. In 2022, managers at
Nordic had the possibility to accept individual requests
to work from home, up to two days per week where
work tasks could be safely executed from outside the
office. This safeguards project deliveries and business
requirements. However, internal data reveals a score of
0.8 under the market benchmark in perceived freedom
to work remotely. Nevertheless, the same analysis
confirmed that employees feel they have a physically
healthy balance in their lives, with an average score of
8.2. This is 0.2 above the market benchmark.

Working hours
Working hours and other working conditions must
minimally comply with local employment laws and/
or RBA Code of Conduct paragraphs. All employment
contracts include a paragraph describing the local
working hours to clarify expectations and adherence to
local laws and regulations. Furthermore, working hours
and equivalent employment-related conditions are
available in country-specific employee handbooks.

Health & Safety
Employees' health and safety is imperative for Nordic
Semiconductor. We strive to always uphold our
legal and ethical responsibilities and are committed
to continuous improvement. Consequently, we
review and update our policies and procedures
regularly to maintain high standards of transparency
and accountability.

Health and safety management system
To ensure a safe working environment and promote
good health, Nordic is certified according to the ISO
45001 Occupational Health and Safety Management
System standard. ISO standard certification requires
an annual review by Det Norske Veritas (DNV), which
provides feedback and ensures that we uphold and
continuously improve on the standard.

The Group has established local Occupational
Health and Safety Committees for operations in
Norway, Finland, the Philippines, and Taiwan. Other
office locations are safeguarded by the corporate

Occupational Health and Safety Committee (AMU) body
in Norway. To further professionalize the efforts of local
committees and enhance safety management processes,
Nordic established a global Health & Safety Advisor role
in 2022.

Supplier requirements
All Nordic Semiconductor manufacturing partners must
be certified according to ISO 45001 or a similar standard
and adhere to the RBA Code of Conduct.

Safety metrics
Protecting the workforce environment is vital
for health and well-being. It contributes to the
quality of our products and services, and ensures
consistent production.

Total Recordable Rate
Our global Total Recordable Rate (TRR) for 2022 was
0,07%, below the known industry average. The key factor
in this value is Nordic's fabless set-up without heavy
machinery and equipment. This reduces the risk of
accidents and injuries. Employees handling hazardous
chemicals are trained and required to follow regularly
rehearsed emergency protocol and procedures. In 2022,
we had two minor incidents, one of which caused an
injury requiring short term sick leave. All incidents are
investigated, and corrective actions are put in place to
prevent recurrence.

Occupational Health and Safety risk assessment
Nordic Semiconductor conducts an annual Occupational
Health and Safety risk assessment to reveal areas
of concern in the workplace, followed by preventive
measures. In 2022 the analysis concluded that
ergonomics and negative stress are key improvement
areas. More so, the engagement survey supported the
findings with a score of 0.3 below market benchmark on
physical working condition. Measures are implemented
to address improvement areas, including offering
selected employees ergonomic equipment, work tools
and access to rapid health support, and encouraging
everyone to use 60 minutes work time each week for
physical activity.

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendicesOur groupFinancial EnvironmentSocialGovernanceOutlookConcluding remarksHealth benefits
Engaging in regular physical activity has a positive
impact not only on health, but also on productivity and
engagement. To promote physical activity, the Group
introduced an initiative in 2022 whereby employees are
encouraged to be active for up to 60 minutes per week
during work hours. This initiative has been well received
and widely used, with over 18,800 hours spent in 2022.
In addition, to promote physical activity outside the
workplace and working hours, Nordic Semiconductor
introduced a benefit subsidizing gym memberships in
2022, with more than 400 employees taking advantage
of this throughout the year.

In November 2022, Nordic facilitated an internal health
initiative for Cancer Awareness Week, meant to open
dialogue and educate employees to take care of their
own health. The initiative was well received, with almost
one third of employees participating in various sessions.

Vaccination
Due to the high risk of being seriously impaired by
seasonal influenza, Nordic offered vaccinations to
employees across the globe, as well as to temporary
workers and students. Nordic also offered the Boostrix
polio vaccine and pneumococcus vaccine for employees
in medically defined risk groups. More than 500
employees were vaccinated, approximately 35% of
the workforce.

Health and Wellbeing

Social wellbeing

Mental Wellbeing

Management Support

Organizational support

Workload

8.3

7.8

8.0

8.7

8.3

7.9

above benchmark

below benchmark

above benchmark

at the benchmark

A healthy workforce
As the Covid-19 situation stabilizes, a main focus of ours
has been to bring employees back to the office. We
believe that employees, as well as the business, benefit
from interaction in the office. Meeting and interacting
with colleagues outside of projects may contribute to
well-being and mental health as well.

Sick leave
As Nordic’s employee base has grown considerably in
recent years, our ambition remains maintaining a low
level of sick leave and high employee satisfaction. Illness
rate is monitored on an ongoing basis so we can take
preventive measures as soon as possible.

The average across our larger office locations for overall
sick leave was 2.37%, while the rate of short-term sick
leave1 was 1.59%. This confirms that the level of short-
term sick leave stayed well below the threshold of 2.5%.
Total sick leave in Norway was 2.8% (0.5% increase
from 2021), while short-term sick leave remained below
the Group threshold at 1.6% in 2022 (0.4% increase
from 2022).

1 Short-term sick leave is defined as ill-health absenteeism below 16
consecutive days.

Parental leave
During 2022, 67 employees in Nordic took parental
leave (62 men and 5 women). In Norway, 22 employees
were on paternity leave, while 3 employees were on
maternity leave.

Since 1993, part of parental leave in Norway has been
legally devoted to fathers as a way to promote gender
equality in the labor market. Nordic pays parental
benefits beyond the National Insurance Scheme. While
the National Insurance Scheme refunds an annual salary
up to 6 G, Nordic offers the full salary if the employee
has been working for at least 6 of the past 10 months
before the birth or adoption of the child. The average
number of weeks on leave for men in Norway was 12.95
weeks, while the average for women was 30.66, giving
an overall average for parental leave in Norway of 15
weeks in 2022.

Nordic Semiconductor’s value chain and illustrative examples to our approach to sustainable value chain management

Why it matters
As a global fabless semiconductor company bringing
together the best-in-class expertise from across the
globe, we believe that technology must be developed
and produced in a sustainable and ethical manner.
Supplier management plays a critical part in our
success, ensuring continuous focus on sustainable
practices and production of high-quality deliverables.

Our approach
Nordic’s approach to responsible supply chain
management is based on OECD’s Guidance for
Responsible Business Conduct. This enables us to
exercise our commitment to maintaining a responsible
supply chain through targeted risk-based efforts,
preventive and mitigating measures, and driving
continuous improvement.

Sustainability plays a key role throughout the supplier
life cycle. New tier-1 suppliers are subject to a thorough
qualification process where they are screened for
risks and actual negative impacts, and evaluated
on whether identified risks and impacts can be
acceptably mitigated. We use RBA’s risk assessment
model, comprised of self-assessment questionnaires
and audits, to annually evaluate our manufacturing

Nordic's manufacturing partners are required to be
certified to relevant ISO and environmental standards.
The Group works with globally recognized suppliers
such as TSMC and ASE, recipients of sustainability
ratings and awards. Tier-1 suppliers are required to
adhere to the RBA Code of Conduct and to promote
adherence of the same to tier-2 suppliers to mitigate the
risk of unacceptable business behavior.

Significant risks and negative impacts are subject to
corrective actions, which are tracked, and the outcome
verified. As a whole, our supply chain management
contributes to continuous development amongst our
suppliers whilst ensuring compliance with our standards
and expectations.

Nordic Semiconductor provides a third party
whistleblower channel on our website to enable
reporting of potential unwanted business practices.

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendicesOur groupFinancial EnvironmentSocialGovernanceOutlookConcluding remarks
Human rights and labor Rights
Our commitments
Nordic Semiconductor has made a commitment to
conduct business in a way that respects and supports
internationally proclaimed human and labor rights
as defined by the International Bill of Rights, and the
International Labor Organization (ILO) Fundamental
Principles and Rights at Work, as well as the UN
Global Compact Principles, by preventing and
mitigating negative impacts and by driving continuous
improvement. This means that we do not tolerate
any form of human rights abuse or labor violations,
including forced labor, child labor, human trafficking,
or any form of modern slavery, at any stage of our
operation, including the manufacturing of Nordic
Semiconductor products by subcontractors. We stand
by the principle that workers shall be treated with

respect and dignity as understood by the international
community, all employment shall be freely chosen,
workers shall be free to leave their employment with
reasonable notice, and working hours and wages shall
comply with applicable local laws or the principles of
the Responsible Business Alliance ("RBA") to which we
are a member (whichever is stricter).

How we work with human and labor rights
To ensure the operationalization of our commitment to
respect and support human and labor rights, Nordic
Semiconductor has in 2022 established a human rights
program as part of our overall compliance framework,
inspired by the iterative six-step process outlined in
the OECD´s Guidelines for Multinational Enterprises.
This entails:

1) Anchoring of commitment to policies and management
systems.
The Board of Directors, in particular through the Audit
Committee, provides oversight of Nordic's work to ensure
respect of and support to human and labor rights. Our
commitment is reflected in our CSR policy, which is
approved by the Executive Management Team and the
Board. Our human rights program is managed by the
Legal & Compliance function. We have operationalized
our commitment through relevant procedures
and processes throughout our business functions,
implementing relevant measures in a practical manner
within their respective area of responsibility. Relevant
requirements and expectations are communicated to
employees and business partners.

2) Conducting regular risk assessments.
Assessment of the risk of violation of human rights is
an integrated part of our corporate risk management
process, which is subject to bi-annual review. In 2022,
Nordic initiated an overarching human rights due
diligence review of our own operations, as well as a
more in-depth risk assessment of our supply chain.
This will continue in 2023. Nordic will report its findings
by June 30th in accordance with the Norwegian
Transparency Act.

3) Prevent and mitigate identified risks and actual
negative impacts.
Nordic conducts its business with integrity and
compliance with relevant regulations, and we expect
the same from our business partners. We conduct
integrity due diligence, including risks related to human
rights, prior to entering into a contractual relationship.
We also monitor suppliers' implementation of the RBA
Supplier Code of Conduct and contractual clauses
covering human and labor rights through tracing of
information from conflict mineral reports, reporting on
human rights and labor performance, and follow-up of
next-tier suppliers. This is done through self-assessment
questionnaires and on-site audits of high-risk suppliers.

5) Communication with employees and stakeholders.
We seek to actively communicate with employee
representative bodies as an extension of our efforts
to improve respect for human rights and working
conditions. Raising employee awareness on human
rights is a key part of our efforts. In 2023, we will include
training & communication regarding human rights in
Nordic in our Code of Conduct project.

6) Remediation of identified or reported grievances.
Nordic Semiconductor allows for anonymous reporting
of grievances through our whistleblowing channel. We
are committed to providing effective remediation where
we have caused or contributed to adverse human or
labor rights conditions.

More details related to our human rights work can be
found on our website.

Responsible sourcing of minerals
We support, contribute to and rely on industry-wide
efforts to validate that the minerals used in our products
come from responsible sources. As a committed member
of the RBA and the Responsible Minerals Initiative (RMI),
we use best practice tools and processes to promote
responsible sourcing and avoidance of conflict minerals
throughout our supply chain.

Nordic’s Conflict Minerals Policy is publicly available
on our website and has been communicated to all
relevant suppliers.

As a fabless semiconductor company, Nordic does not
purchase minerals directly from mining companies or
have direct contact with smelters but monitor our tier-1

suppliers to identify those that supply materials at risk
of containing conflict minerals. We rely on third-party
auditing programs such as the RMI audit program to
ensure compliance.

Nordic utilizes the supply chain reporting scheme set out
by RMI and the Global e-Sustainability Initiative (GeSI).
Furthermore, Nordic’s suppliers must adhere to RBA
Code of Conduct and its conflict minerals provisions.
Nordic reports at the smelter/refinery level to customers
and stakeholders weekly through RMI’s Conflict Minerals
Reporting Template.

To date, no incidents of minerals supporting armed
conflicts have been discovered. For 2023, we expect
Conflict Minerals to remain a highly relevant issue
related to human rights in our supply chain. We will
continue to engage our tier-1 suppliers in identifying the
origin of all materials used in Nordic’s products.

Human capital, diversity, and employee engagement

Number of employees

Percentage female employees

Employee turnover rate (%)

Number of students/interns from universities

Number of contractors

Percentage of temporary workers

Total compensation ratio

Total compensation ratio change (year-over-year)

Diversity, equity & inclusion average score

Employee engagement average score

Health and safety

Work related incidents

Lost Time Incident Rate (LTIR)

Fatality rate

Contractor fatality rate

Total sick leave (Norway)

Short time sick leave (Norway)

Health and well-being average score

Social well-being average score

Mental well-being average score

Management support average score

Organizational support average score

Workload average score

Target 2023

2022

2021

2020

1197

14.0%

5.6%

4.3%

9.18

0.0

2.28%

1.22%

897

13.8%

3.1%

6.8%

0.0

1.35%

1.03%

< 5.0%

Above benchmark

0.0

< 2.5%

Above benchmark

1435

16.3%

6.6%

110

5.5%

10.23

11.0%

8.5

8.4

0.1

2.79%

1.59%

8.3

7.8

8.0

8.7

8.3

7.9

Nordic Semiconductor has a corporate
governance framework for how our
Group is directed and controlled
to ensure we achieve our strategic
objectives the right way. Good,
transparent, corporate governance
aligns the interests of shareholders,
management, employees, customers
and other stakeholders to maximize
value creation and reduce business-
related risk. At the same time, the
Group's resources must be used in an
optimal and sustainable manner.

48
49

53
53

Governing structure

Board of directors

Executive management

Events and development

Norwegian Code of Practice
for corporate governance

65
70
72

Risk Management

Managing sustainability in Nordic

Compliance & integrity

Governance performance

Governing structure
Our risk management and internal control activities
are integrated into our corporate strategy and business
planning processes, based on the principle that risk
evaluation is an integral part of all business activities.

While corporate risk management is a centrally
governed process, the responsibility for day-to-day
risk management lies with the respective business
functions. Risk management and internal control seek
to handle risks and opportunities that may impact
Nordic's strategic objectives proactively, systematically

drive long-term value creation, and promote sustainable
business conduct. A prerequisite for the implementation
of our strategic goals is a clear understanding of
organization, responsibility, authority, and roles. See
above for an overview of Nordic's governance bodies.

Birger Steen | Chair
Chair of the Board since 2018 and board member since
2017. Member of the People & Compensation Committee.

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 AB1 and myneva Gmbh1 2, and
has previously served as a Non-Executive Director of
Schibsted ASA and Cognite AS.

Board meetings attendance: 11, PCC attendance: 5

Holdings in the company: 196,840 shares

¹Board positions included in the position as Thematic Partner at
Summa Equity AB.
²Mr. Steen is stepping down from his position on the board of myneva
Gmbh in 2023.

Inger Berg Ørstavik | Shareholder elected
Board member since 2017. Chair of Sustainability
Committee. Member of the Audit Committee.

Inger Berg Ørstavik is a professor at the Department of
Private Law, University of Oslo. She has previously been
a partner at the law firm 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 has previously served as a
Non-Executive Director of REC Silicon ASA.

Board meetings attendance: 10, SC attendance: 1, AC
attendance: 7

Holdings in the company: 5,258 shares

Øyvind Birkenes | Shareholder elected
Board member since 2019. Member of the Sustainability
Committee.

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.

Board meetings attendance: 11, SC attendance: 1

Holdings in the company: 10,600 shares

Jan Frykhammar is a Swedish business executive with
over 25 years of experience in the telecommunications
and technology industry. He spent the majority of
his career at Ericsson, one of the world's largest
telecommunications companies, where he held various
executive positions over the years. He was appointed
as the company's Chief Financial Officer (CFO) in
2009. As CFO, he was responsible for overseeing the
company's financial operations and played a key role
in Ericsson's cost-reduction program. Frykhammar
also has experience in strategic planning, portfolio
optimization, and mergers and acquisitions (M&A).
He led several acquisitions and divestments amongst
others Ericsson's acquisition of Nortel and Telcordia
as well as the divestment of Sony-Ericsson and ST-
Ericsson. Furthermore, Frykhammar has extensive board
experience in several industries including technology
by Enea AB, Alphawave Semi, Telavox AB and Clavister
AB, renewable energy by OX2 and consultancy by
Aspia Group.

Board meetings attendance: 11, AC attendance: 7

Holdings in the company: 24,528 shares

Morten Dammen | Employee elected
Board member since 2019. Member of the People &
Compensation Committee.

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 and team management to VP R&D.

Board meetings attendance: 11, PCC attendance: 5

Holdings in the company: 1,150 shares and 2,715 RSUs

Anja Dekens | Employee elected
Board member since 2022. Member of the Sustainability
Committee.

Anja Dekens joined Nordic in 2014 and has been
working with HW design in IC development since then.
Besides her position as an engineer, she is also leading
the Digital Design Discipline team, which is responsible
for the methodology used by all digital designers at
Nordic. Anja studied Electrical Engineering in Karlsruhe
University, Germany and at NTNU, Trondheim and
has a PhD degree from the University of Twente,
the Netherlands.

Board meetings attendance: 7, SC attendance: 1

Holdings in the company: 300 shares and 542 RSUs

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendicesOur groupFinancial EnvironmentSocialGovernanceOutlookConcluding remarksEndre Holen | Shareholder elected
Board member since 2019. Chair of the People &
Compensation Committee.

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
broad experience and a wide professional network from
counseling Fortune 1000 CEOs on topics like strategy,
corporate performance, succession planning, leadership
and Board governance.

Board meetings attendance: 11, PCC attendance: 5

Holdings in the company: 154,888 shares

Gro Fykse | Employee elected
Board member since 2022.

Gro Fykse has a Master of Science in Electrical
Engineering from NTNU in Trondheim. In 2017, she started
at Nordic Semiconductor as a Sr. Project Manager.
Since 2018, Gro has been leading Nordic's System
Architecture Group. Gro has 15 years of experience from
Atmel Corporation in different roles ranging from chip
design, product engineering, program management,
team management, and QA management. In addition
to over twenty years of experience in the semiconductor
business, she worked as a QA and Project Director at
Norbit ASA.

Board meetings attendance: 7

Holdings in the company: 850 shares and 1,191 RSUs

Annastiina Hintsa | Shareholder elected
Board member since 2019. Member of the Sustainability
Committee.

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.

Board meetings attendance: 11, SC attendance: 1

Holdings in the company: 4,258 shares

Anita Huun is an experienced business executive and
the current Commercial Director for Techstep, former
CFO for Techstep. Huun has more than 20 years of
experience in finance, capital markets and management.
Prior to joining Techstep, Huun served as the CFO of
Cappelen Damm, a Norwegian publishing company
and CFO for Microsoft Norway. Huun's capital market
experience comes from her years as an equity analyst,
covering the Norwegian IT sector, for Handelsbanken
Capital Markets. Furthermore, Huun has board
experience from Link Mobility until it was acquired by
Abry partners. She has a MSc from the Norwegian
School of Economics (NHH), with specialization
in Finance.

Board meetings attendance: 11, AC attendance: 7

Holdings in the company: 13,258 shares

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
Principal R&D engineer in Nordic Semiconductor.

Board meetings attendance: 11

Holdings in the company: 600 shares and 298 RSUs

Svenn-Tore Larsen | Chief Executive Officer /
President
CEO & President 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 a member of the
Board of Nordic Semiconductor from 2000-2002. Svenn-
Tore Larsen is based in Oslo, Norway.

Holdings in the company at year-end: 1,932,272 shares,
28,086 RSUs and 23,366 performance shares

Ola Boström | SVP Quality
Member of the Executive Management Team since 2022

Mr. Boström holds a M.Sc. degree from Uppsala
University and a PhD form the University of Aix-Marseille
III. Before joining the Quality Department of Nordic in
2006, Mr. Boström worked with wafer manufacturing
and TCAD in the R&D Department of STMicroelectronics.
Mr. Boström has held several positions inside
Nordic including Product Engineering and Product
Qualifications before being in charge of the installation
and operation of a high-end Electrical/Physical Analysis
lab in Trondheim. Ola Boström is based in Oslo, Norway.

Holdings in the company at year-end: 575 shares and
4,585 RSUs

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

Mr. 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 at year-end: 31,650 shares,
12,594 RSUs and 12,594 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. Katarina Finneng is
based in Oslo, Norway.

Holdings in the company at year-end: 600 shares, 10,427
RSUs and 10,427 performance shares

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 at year-end: 10,415 shares,
8,812 RSUs and 8,812 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 at year-end: 201,114 shares,
16,139 RSUs and 13,189 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 Electronics
Engineering from Norwegian University of Science and
Technology (NTNU). Ole-Fredrik Morken is based in
Taipei, Taiwan.

Holdings in the company at year-end: 190,670 shares,
9,995 RSUs and 9,995 performance shares

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 at year-end: 32,244 shares,
14,236 RSUs and 14,236 performance shares

Mrs. Pettersson holds a Master of Law degree from
Uppsala University in Sweden and has long international
experience within Legal and Compliance functions
within several different sectors. She started as a Legal
Counsel at Wallenius Wilhelmsen Logistics AS, providing
legal support within a wide variety of la across many
jurisdictions. At Wallenius Wilhelmsen Logistics,
she developed and implemented company-wide
compliance programs including all their components,
she supported investigations, and identified solutions
for non-compliance matters. Her most recent position
before joining Nordic in 202 was to head the Group
Compliance function at Norsk Hydro ASA. Mrs.
Pettersson also acts as Secretary to the Board of
Directors. Linda Pettersson is based in Oslo, Norway.

Holdings in the company at year-end: 598 RSUs

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 at year-end: 135,452 shares,
8,567 RSUs and 8,567 performance shares

governance provides a foundation for value creation
and good control mechanisms. A prerequisite for the
implementation and execution of our strategic goals is
a clear understanding of organization, responsibility,

authority, and roles. An overview of the status and
development of Nordic's governance bodies is provided
in the following overview.

Description

General Meeting

Developments and events during the reporting year

References

Company shareholders exercise ultimate authority through the Annual General Meeting.

The General Meeting was held April 28, 2022.

The General Meeting shall:
1. Adopt the annual accounts and report, including the application of the annual surplus
or covering of loss pursuant to the adopted balance sheet, and the distribution of
dividend.
2. Elect members of the Board of Directors and members of the Nomination Committee.
3. Adopt renumeration to the members of the Board of Directors and approve the
remuneration to the auditor.
4. Address and decide any other matters which are referred to in the notice of the
General Meeting.

Nomination Committee

The company has a Nomination Committee according to its Articles of Association.

The Nomination Committee has held 23 meetings during 2022.

The General Meeting stipulates instructions for the Nomination Committee, elects the
chair and members, and stipulates the committee’s renumeration.

The Nomination Committee shall make proposals to the General Meeting regarding
candidates to the Board of Directors and the remuneration to the Board of Directors.

Members:

a. Viggo Leisner (Chair)
Eivind Lotsberg
b.
Fredrik Thorsen
c.

Board of Directors

The Board of Directors currently includes 11 members. Seven are elected by the General
Meeting and four are employees elected by other employees for a term of up to
two years.

In accordance with the Norwegian Public Companies Act, the Board of Directors assumes
the overall governance of the company, ensures that appropriate management and
control systems are in place, and supervises the day-to-day management as carried out
by the CEO.

All shareholder-elected members are external. No members elected by employees are
part of the company’s executive management. Employee directors have no other service
contractual agreements with the company outside of their employee contracts, though
they are subject to their duties as board members.

The Board of Directors has held 11 meetings in 2022.

The Board of Directors has an annual plan for its work that includes strategy,
sustainability and business review, risk and compliance oversight, financial
reporting, people agenda and succession planning.

High on the Board of Directors' agenda in 2022 was progress on technology
projects related to shifting to a new process node, the acquisition of Mobile
Semiconductor Corporation, and the establishment of a Board Sustainability
Committee. Extraordinary meetings were held to handle critical matters.

The Board of Directors shall conduct an annual self-assessment of its work
and competence within a reasonable time prior to the Annual General
Meeting in 2023.

Gro Fykse and Anja Dekens were elected as board members from the
company’s employees and participated in their first meeting in June 2022.

All shareholder-elected members were deemed in 2022 to be independent,
according to the Norwegian Code of Practice. None of the company’s non-
employee board members had any other service contractual agreements with
the company.

The protocols from the
General Meeting can be
found at the company's
website: Corporate
Governance - nordicsemi.com

Articles of Association,
§8 can be found at the
company’s website: Corporate
Governance - nordicsemi.com

The Rules of Procedure of
the Board of Directors can
be found at the company’s
website: Corporate
Governance - nordicsemi.com

Biographical information
on the board members
can be found in the Board
of Directors section of this
report and at the company’s
website: Board of directors -
nordicsemi.com

Description

Audit Committee

Developments and events during the reporting year

References

The Audit Committee consists of three members from the Board of Directors.

The Audit Committee has held 7 meetings during 2022.

The Audit Committee is a preparatory body that supports the Board of Directors in fulfilling
its responsibilities with respect to financial reporting, auditing and control. Its supervisory area
includes adequate company policies, procedures, systems and measures to prevent violations
of relevant rules and regulations, including anti-corruption, data privacy, and human rights.
The committee shall be informed and evaluate material risks and issues related to tax. The
committee also supports the Board in the evaluation of IT and cyber security risk in the
company. The committee supervises the company’s external reporting, including the integrated
annual report and its alignment with relevant regulations and international guidance to ensure
transparent and reliable data.

The Audit Committee reviews and approves all non-audit fees paid to the companies
elected auditor.

The Nordic Group Compliance Officer has a dotted reporting line to, and meets regularly with,
the Audit Committee.

People & Compensation Committee

In 2022, the committee focused on reviewing the Group's internal
controls in connection with higher digitalization of reporting functions, as
well as reviewing processes to mitigate increased cyber threat.

Members:
a.
b.
c.

Jan Frykhammar (Chair)
Inger Berg Ørstavik
Anita Huun

The members meet the Norwegian requirements for independence
and competence.

The People & Compensation Committee consists of three members of the Board of Directors.

The People & Compensation Committee held 5 meetings in 2022.

The committee shall assist the Board of Directors in exercising its oversight responsibility in
particular regarding compensation matters pertaining to the CEO and other members of the
Executive Management Team. The committee handles other compensation issues of principal
importance, such as coherent renumeration policies and practices to enable the company to
attract and retain executives and employees who will create value for shareholders. It supports
the Board of Director and supervises management on human capital development, working
conditions, and diversity, equity, and inclusion (DE&I).

Succession planning, performance and growth management, and
continued development and review of the company’s organizational
fundamentals and rewards structures were important focus areas for the
PCC in 2022.

Members:
a.
b.
c.

Endre Holen (Chair)
Birger K. Steen
Morten Dammen

The members of the 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 includes both
an employee-elected director and two shareholder-elected directors with
extensive experience from the global technology space.

The Audit Committee
charter can be found at the
company’s website: Corporate
Governance - nordicsemi.com

The People & Compensation
Committee charter can be
found at the company’s
website: Corporate
Governance - nordicsemi.com

Description

Sustainability Committee

Developments and events during the reporting year

References

The Sustainability Committee consists of four members of the Board of Directors.

The Sustainability Committee is a preparatory body for the Board in fulfilling the Board's
responsibilities with respect to considering sustainability within the activities and value creation
of the company. The committee supervises the integration of sustainability into Nordic strategy
and business activities, reflected in adequate follow-up of ESG metrics to measure and monitor
its sustainability performance.

The Sustainability Committee was established by the Board of Directors
in September, 2022.

The Sustainability Committee has held 1 meeting in 2022.

In 2022 the committee focused on establishing an enhanced
sustainability framework for the company and reviewing ESG metrics,
including a high-level peer analysis.

The Sustainability Committee
charter can be found at the
company's website: Corporate
Governance - nordicsemi.com

Members:

Inger Berg Ørstavik (chair)

a.
b. Annastiina Hinsta
c. Øyvind Birkenes
d. Anja Dekens

CEO & Executive Management Team

According to Norwegian corporate law, the CEO constitutes the formal governing body
responsible for the daily management of the company. The CEO leads the company with the
assistance of the Executive Management Team.

The division of functions and responsibilities between the CEO and the Board of Directors are
defined in greater detail in the Rules of Procedure for the Board of Directors of the company.

The Executive Management Team held 20 meetings in 2022.

Marianne Frydenlund stepped down as SVP Legal in July 2022. Linda
Pettersson was appointed SVP Legal & Compliance with effect from July,
2022. Ebbe Rømcke stepped down as SVP Quality & Sustainability in
August 2022. Ola Boström was appointed SVP Quality with effect from
August 2022.

Biographical information
on the CEO and Executive
Management Team can
be found in the Executive
Management section of this
report and at the Company’s
website at: Management -
nordicsemi.com

Board of Directors' report in relation to the
Norwegian Code of Practice for Corporate
governance
The Board of Directors ("Board") and Management
of Nordic Semiconductor ASA ("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 chapter provides a detailed overview of how
Nordic Semiconductor follows 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 follows the most recent edition of the Code of
Practice from 2021. The Board monitors the subject of
corporate governance actively and continuously. The

Board approved this statement on the meeting of March
17, 2023 through the signing of the annual report.

Business
Nordic designs, sells and delivers integrated circuits
and related products and services for use in short- and
long- range wireless applications. The Group 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 Group is headquartered in
Trondheim, Norway. As of 2022, the Group has offices in
China, Finland, India, Japan, Korea, Germany, Poland,
Philippines, Singapore, Sweden, Taiwan, UK, and the
USA.

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 Articles of Association are published in full on the
Group website.

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

Nordic has purchased and maintains a Directors and
Officers Liability Insurance on behalf of the members of
the Board and the CEO. The insurance policy is issued
by a reputable insurer with an appropriate rating.

More details on Nordic's objectives, strategies, and risk
profiles, including Environmental, Social and Governance
matters, are presented in the respective chapters of
the Report of the Board of Directors. More information
about Nordic's objectives and efforts related to
Environmental, Social and Governance matters is also
available on the Group website.

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 cyclical nature of its
business, means that the company aims to maintain
a high equity ratio and considerable liquidity. The
company aims primarily to provide shareholders with
returns in the form of appreciation of shares. The
company 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. The
company believes a strong balance sheet is required
to ensure flexibility and resilience. Cash generation is,
however, expected to increase over the coming years.
This will allow for the evaluation of cash return to
shareholders when available and expected cash exceed
our liquidity risk policy. 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 28,
2022, has been authorized to buy back up to 19,200,000
own shares for a total par value of NOK 192,000.00 in

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendicesOur groupFinancial EnvironmentSocialGovernanceOutlookConcluding remarksone or more transactions. The authorization is limited to
10 percent of the company’s share capital. The price per
share, which in this case the company may pay for, shall
not be less than the par value nor greater than NOK
350. This power of attorney will remain in effect until the
company’s ordinary Annual General Meeting in 2023.
The Board believes that it is expedient for the Board
to be authorized to purchase its 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 28, 2022, 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 2023, and can be implemented through a
private placement, rights issue or public offering.

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 2023.

Equal treatment of shareholders and
transactions with close associates
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.

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. 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 a case, there will be full
transparency about the matter. Shareholders will receive
identical information simultaneously through a stock
exchange announcement and the company's website.

This also applies if the Board uses 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 investors
is normally conducted through company management.
Under special circumstances, the Board, represented
by the chairperson, may conduct dialogue directly
with investors.

Freely negotiable shares
Nordic Semiconductor’s shares are freely tradable.
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.

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 encourage 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, will be announced and
distributed at least 21 days in advance of the Annual
General Meeting. 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 Chair of the People & Compensation Committee
should attend 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

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendicesOur groupFinancial EnvironmentSocialGovernanceOutlookConcluding remarksopportunity 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.

proposals to the Nomination Committee is two months
before the Annual General Meeting.

The Nomination Committee held 23 meetings in 2022.

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

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
at 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 members of the Nomination Committee are:

■ Viggo Leisner (Chair)

■ Fredrik Thoresen

■ Eivind Lotsberg

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 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. Nordic has agreed with its employees not to
have a corporate assembly and thereby increased the
numbers of employees elected Board members.

The Nomination Committee consists of three
shareholder members or representatives. The company’s
executive personnel are not represented on the
Nomination Committee. The deadline for submitting

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 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.
Employee-elected board members should not be
included in this requirement.

In 2022, the Board, as elected in accordance with the
above-mentioned principles by the General Assembly,
consisted of seven shareholder-elected Board Members
and four 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
2022 three out of seven or 43%).

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

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 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.

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.

The Board of Directors has an annual plan for its
work. It includes recurring topics such as strategy,
sustainability and business review, risk and compliance
oversight, financial reporting, people agenda and
succession planning.

Progressing on technology projects related to shifting to
a new process node was high on the Board of Directors'
agenda in 2022, along with the acquisition of Mobile
Semiconductor Corporation and establishment of a
Board Sustainability Committee.

During 2022, the Board held eight ordinary Board
Meetings and three extraordinary meetings.
The meetings were held as a mix of virtual and
physical meetings.

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

The Board has established three board committees
comprised of Board members – the People and
Compensation Committee, the Audit Committee and
the Sustainability Committee. Furthermore, ad hoc
committees to address particular time bound issues and
questions are appointed. 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, as
well as allowing for deeper and stronger involvement in
the business’ challenges and initiatives.

People and Compensation Committee
The Board's People and Compensation Committee
supports the Board and Executive Management
in fulfilling their responsibilities with respect to
People Agenda, Organizational Development and
Compensation Approach. This includes to ensure
coherent remuneration policies and practices enabling
the company to attract and retain key talent, generate
sustained business performance, and support company
objectives and values. It also includes to review other
relevant people and business culture matters requested
by the Board or the management. The committee
recommends and evaluates remuneration principles and
execution for the CEO, guides and evaluates principles
and strategy for the compensation of executive
management, and evaluates and oversees the overall
compensation strategy for the Group. The committee
held 5 meetings in 2022.

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

■ Endre Holen (Chair)

■ Birger K. Steen

■ Morten Dammen

The members of the People and Compensation
Committee are selected to support continuous
organizational development that reflects the challenges
related to attraction and retention in a global
technology market. Therefore, the committee consists
of two shareholder-elected Board Members with global
experience in the technology space, in addition to
an employee-elected Board Member with extensive
company experience.

All members participated in all meetings during 2022.

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. At least one
member has 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. The
committee also supports the Board in evaluating IT and
cyber security risk to the company. Additionally, 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 seven meetings in 2022 and
has been in regular contact with the Group’s auditor
regarding audits of the statutory accounts. 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

One member has extensive experience as a CFO
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.

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.

Sustainability Committee
The Board established a Sustainability Committee in
September 2022.

The Sustainability Committee is a preparatory body for
the Board in fulfilling the Board's responsibilities with
respect to considering sustainability within the activities
and value creation of the company. The Committee
supervises the integration of sustainability into Nordic
strategy and business activities, hereunder adequate
follow-up of ESG metrics to measure and monitor its
sustainability performance.

The Sustainability Committee consists of the following
Board Members:

■

Inger Berg Ørstavik (chair)

■ Annastiina Hinsta

■ Øyvind Birkenes

■ Anja Dekens

The Sustainability Committee has held one meeting in
2022. All members participated in this meeting.

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 oversees 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 them, see the Risk Management section
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. The Board
of Directors also performs an annual review of the
company’s business strategy, focusing on market
development, technology updates, competitive
positioning and risk factors. The Board reviews various
aspects of the company’s business throughout the year,
including a detailed risk review twice a year.

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.

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's annual accounts. The
remuneration to Board members is neither performance
based nor linked to the company’s performance, and
the company does not provide share options to Board
members. Members of the Board of Directors receive
remuneration for work related to Board committees.

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

The main principle in the Group’s policy for
remuneration and compensation is that the leading
employees shall be offered competitive terms, so as
to ensure the group 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 Group has established an annual performance
bonus for the executive management team (EMT), for
which the employee must remain within her position
until the start of the following year to be eligible.
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 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 accounting and tax rules, and
confirmation of financial information in various contexts.
All other services besides audit services performed by
PwC are approved by the Audit Committee.

The remuneration policy includes a clawback
agreement for all members of the EMT, stating that any
remuneration paid or delivered under incentive schemes
such as shares, options or cash, and any vested right
to such remuneration, are subject to clawback by the
company in case of breach with the guidelines.

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

The remuneration policy was approved by the
shareholders at the Annual General Meeting in 2022.

The approved policy is available on Nordic’s website.
A new management remuneration report for 2022 will
be published on Nordic's website and presented to the
Annual General Meeting in 2023 for an advisory vote.

Information and Communications
The Board of Directors has established a
communications strategy for the company’s reporting of
financial and other information based on transparency
and taking into account the requirement for equal
treatment of all participants in the securities market. The
strategy is available on the company’s investor relations
web pages: https://www.nordicsemi.com/Investor-
Relations/Investor-relations-policy

Nordic Semiconductor aims to communicate actively,
openly and in a timely fashion with the financial
market. The Group'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 Group’s reporting.

Nordic Semiconductor’s financial reporting calendar for
2023 has been announced to the Oslo Stock Exchange
and can be found on the company’s website. The
Group’s annual and quarterly reports contain extensive
information about the various aspects of the Group’s
activities. The Group’s quarterly presentations can be
found on Nordic Semiconductor’s investor relations
webpages along with quarterly and annual reports, as
well as a comprehensive and detailed presentation of
other information, reports and documents.

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. 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.

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.

Risk

Strategic risks

Cyclical nature of semiconductor industry

Constraints in the supply of wafers

Customer concentration

Attraction and retention of key talent

Competitiveness of Nordic products

Geopolitical risk and trade tensions

Operational, Financial & Legal risks

Product ramp

Product liability

Product security

Credit risk

Intellectual property rights

Information security and cyber risks

Acute physical events and natural disasters

Failure to comply with regulatory requirements

Influence

Impact

Nordic Semiconductors risk framework

Framework
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. Risks are evaluated by the Executive Management Team and put into actions
and priorities proportionate to identified risks and opportunities to reach or maintain
target risk levels.

Process
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.

Categories
Nordic utilizes a methodology to assess risks within six categories: Strategic,
Operational, Financial, Legal & Compliance, Climate & Environmental and Social, and
rates likelihood and impact, as well as how Nordic may influence the risks as means of
prioritizing appropriate risk mitigating measures.

100%

75%

50%

25%

High

Medium

Low

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendicesOur groupFinancial EnvironmentSocialGovernanceOutlookConcluding remarks
Risk factors
In conducting our business, the Group faces risks
that may interfere with our business objectives. It is
important to understand the nature of these risks.
Based on the information currently known to us, an
overview of key risks are included below. Despite our
best efforts, our risk mitigating initiatives may fail or
prove to be inadequate to mitigate all risks. As our
risks increase, decrease, and as new risks emerge over
time, the information of this section should be carefully
considered by investors.

Theme

Risk

Cyclical nature of the
semiconductor industry

Constraints in the supply
of wafers

An underlying risk factor is the cyclical nature of the semiconductor industry. It is subject to constant and rapid
technological standards, short product life cycles and fluctuations in product supply and demand. The semiconductor
industry has experienced significant downturns at times, often in connection with or in anticipation of maturing
product cycles of semiconductor companies and their customer's products, as well as declines in general economic
conditions. Downturns are typically characterized by diminished product demand, accelerated erosion of average
selling prices, reduced revenues, lower capacity utilization rates and higher inventory levels. Nordic has historically
experienced adverse affects on its results of operations and cash flows during such down turns, specifically in the
form of decreased revenue because of reduced demand from end-customers an may experience such adverse
effects in future down turns. Nordic's growth is dependent, in part, on demand for its customer's end products,
primarily within 'IoT, consumer, healthcare and industrial sectors. Industry downturns that adversely affect Nordic's
customers or their customers, could also adversely affect demand for Nordic's product. Additionally, global, or
regional economic slowdowns affecting business and consumer confidence generally could cause demand for
semiconductor products to decline.

As a fabless semiconductor company, Nordic outsources the capital-intensive production of silicon wafers, packaging,
and testing of its products to third-party suppliers, mainly in Asia. The manufacturing pipeline involves multiple stages
with multiple suppliers. Disruption at any of these third-party suppliers could negatively affect revenue and customer
relationships. Over the recent years, the semiconductor industry has faced significant global demand fluctuations as
well as supply issues of various origins. Such as increased electrification of cars, the Covid-19 pandemic, the ongoing
war in Ukraine, and geopolitical- and trade tensions. For Nordic Semiconductor, the combined effect of these
factors has been a prolonged shortage of wafer supply, which in turn has has limited delivery capabilities for certain
products, notably in the higher end Bluetooth Low Energy series.

Response

Nordic monitors the situation and seek to mitigate
current and potentially continuing economic
slowdown by close dialogue with both customers
and suppliers, credit risk management and
operational cost control.

Nordic maintains close dialogue with customers
and suppliers to identify and address supply risks.
The standard practice of keeping buffer stock of
wafers and finished goods continues. Supply chain
options are considered when selecting suppliers
and technologies to minimize impact of future
supply constraints.

Nordic seeks to have insurance to cover financial
losses from supply disruptions related to disasters.

Risk

Response

Customer concentration

In 2022, Nordic derived around 45% of its total Bluetooth LE revenue from its 10 largest customers. As a result of our
customer concentration and the size of its existing customer base, Nordic revenue could fluctuate materially and
could be materially and disproportionately impacted by the decisions of its largest customers if they were to cancel
or reduce their purchase commitments. Furthermore, in the event Nordic’s largest customers experience a dramatic
decline in sales, fail to compete with their competitors due to oversupply or overcapacity in the market or if they
decide to alter the product mix, Nordic’s business, financial condition, and results of operations could be materially
and adversely affected.

Nordic is required to prioritize high-volume
customers as well as customers with contractual
obligations but strives to maintain allocation
to long tail customers. Nordic seeks to
expand customer base with new platforms
and technologies.

Attraction and retention of
key talent

Our success depend largely on our ability to attract and retain key personnel. Loss of key employees or the inability
to attract or retain qualified personnel, may result in inability to deliver on growth according to expectations,
affecting sales, quality of products, cause delay time to market and more. The demand for skilled workers in the
industry has been steadily increasing over the last years, combined with a post-pandemic approach to work life
flexibility expectations, leading to a growing need for effective attraction and retention strategies.

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 Proposition.

Competitiveness of
Nordic products

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 semiconductor industry is extremely competitive. Competition is based on product performance, structure,
pricing, quality, product features, system-level design capability, engineering expertise, responsiveness, new product
innovation, product availability, delivery timing and reliability, customer sales and technical support, product line-up
and customized design capability. Nordic is exposed to competition from existing companies and new entrants,
mainly from China. Nordic’s competitors range from large, international companies offering a full range of products
to smaller companies specializing in particular semiconductor products. Such competitors may have greater financial,
technological, personnel and other resources than Nordic has in a particular market or overall, which again may
influence Nordic’s business, scope of assignments and customer relationships in the future.

Nordic expects competition in the markets in which it participates to continue to increase as existing competitors
improve or expand their product offerings or as new participants enter its markets, including those participants
that had not historically engaged in such markets. For example, with Bluetooth Low Energy being adopted across
more than 25 identified market verticals, it is likely that more focused and specialized competitors gain market
share, especially win verticals where Nordic’s position is weaker. Furthermore, there is a risk that Bluetooth becomes
unattractive compared to other technologies or is bundled with non-Nordic technologies. The largest immediate
threat comes from various Wi-Fi standards tightly integrated with Bluetooth in combo chipset. There are other
wireless standards, such as Ultra-Wide Band, that may be a risk factor in the long term in some of the verticals
where Bluetooth plays a dominant role today. 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.

Nordic continues to invest in developing competitive
products, software, software development tools,
complementary products and services including
investments in cellular technologies. The Group 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
Group is well positioned to benefit from projects
seeking to improve compatibility across different
standards. Nordic is a part of the Bluetooth
Special Interest Group (Bluetooth SIG), which is
continuously developing the Bluetooth standards.
Nordic joined the Board of Connectivity Standards
Alliance as a Promoter Member, the highest level
of membership in 2022. This allows the Group to
further shape the Alliance’s continued development
of standards such as “Matter”, which will ensure
interoperability between smart home devices and
accelerate the mainstream adoption of smart
home technologies.

Nordic will continue to monitor the trends in the
market, keeping the product portfolio relevant.

Theme

Risk

Product ramp

There is a risk that Nordic is not able to ramp up production of new products according to customer demand,
resulting in reduced or delayed market absorption of products, reduction in revenue growth, and/or 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.

Geopolitical risk and
trade tensions

As a global group, Nordic Semiconductor is exposed to geopolitical risks, challenging global economic conditions,
trade frictions, political unrest, war and related uncertainties which can result in reduced demand for our products
or negatively affect our supply chain. Trade tensions have resulted in the implementation of trade restrictions,
tariffs, export controls and sanctions and other trade barriers against certain countries and individual companies. In
particular, the ongoing efforts by the United States to protect its national security by imposing trade controls related
to China has and will continue to have implications for the global supply chain of semiconductors. Such implications
may include change in manufacturing patterns and cost for end-customers, and/or limit ability to source certain
components required for production of their end-products which may reduce demand for Nordic Semiconductors
products and materially harm our business, financial condition and results of our operations. During fiscal year 2022,
the percentage of our revenue associated with end customers in China was 14%.

Nordic is continuously monitoring potential
implications of geopolitical risks, such as the
Russian invasion of Ukraine, the increased tension
between China and Taiwan and China and United
States respectively to mitigate potential risks.

Nordic seeks preparedness and robustness through
close customer dialogues, dual sourcing planning,
business contingency planning and strong
balance sheet.

Acute physical events and
natural disasters

The nature of our business as a fabless manufacturer, means that Nordic is heavily reliant on semiconductor
manufacturing in Taiwan as well as testing and assembly in Asia. Acute physical events from climate change could
affect our suppliers located in Southeast Asia where tropical cyclones and flooding. or natural disasters such as
earthquakes, have the potential to damage production facilities and infrastructure. Such events could impact Nordic's
delivery capability short-to-medium term.

Information Security and
Cyber Risk

Nordic relies heavily on information technology systems across its operations, including for procurement, research
and development, sales, delivery and various other processes and transactions. Nordic’s ability to effectively manage
its business and coordinate the production, distribution and sale of products depends significantly on the reliability
and capacity of these systems. In addition, Nordic may face attempts by others to gain unauthorized access through
the internet, or to introduce malicious software, to its information systems, and if successful, could expose Nordic and
any other affected parties to risk of loss or misuse of proprietary or confidential information or disruptions of Nordic’s
business operations.

Nordic maintains an active, and seek to
continuously enhance, sanctions & trade
compliance framework to ensure compliance with
increasingly complex regulations.

Nordic has established a short-to-medium term
strategy for reducing the risk of supply disruptions
cased by natural disasters or other severe weather
events. In the short term, we maintain a reserve of
wafers or finished products to address temporary
shortage. For medium-term risk mitigation, Nordic
utilizes a second-sourcing strategy to secure
insurance against widespread supply disruptions.
In addition, Nordic is seeking to maintain partial
insurance coverage. For long-term risk mitigation,
our key manufacturing partners have contingency
plans to reduce such chronic risks.

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.

Credit Risk

Nordic is exposed to credit risk pursuant to trade credit arrangements with its distributors and certain customers.
The main counterparties are leading international distributors of electronic components. Nordic has not historically
suffered any significant credit losses pursuant to its trade credit arrangements with its distributors or customers,
however, if such distributors or customers were to experience financial difficulties or any deterioration in their ability
to satisfy their obligations, Nordic’s cash flow could be materially and adversely affected.

Credit monitoring routines are integrated into any
new credit lines, requiring security in the form
of payment guarantees or advance payment
requirements if needed.

Theme

Risk

Failure to comply with
regulatory requirements

Nordic is subject to regulatory regimes of each country in which it operates, including among others, those relating
to anti-trust, anti-corruption, sanctions & export control, human rights and data privacy. Although Nordic has in
place internal controls and compliance system for the purpose of complying of such laws and regulations, there
can be no assurance that such systems and other efforts to promote compliance, will be effective. Any violation of
such regulations could result in criminal penalties, sanctions, significant fines or mandatory suspension from certain
business activities and could also adversely affect Nordic’s reputation, business and results of operations.

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.

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.

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 seek to continuously enhance its compliance
system and programs, internal controls and risk
mitigating measures, including efforts to strengthen
its culture of integrity.

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
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.

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.

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 aims to limit the contractual liability to an
acceptable level in the industry and seek adequate
insurance coverage.

Managing sustainability in Nordic

To ensure that sustainability is integrated into all of our
business activities and value creation, sustainability
is not the sole responsibility of a particular function.
Instead, our sustainability governance framework is
set up to ensure that sustainability is integrated into
our overall way of doing business. We utilize tangible
Environmental, Social and Governance (ESG) criteria to
allow for transparent follow-up and measurement of our
sustainability performance. Since 2021, ESG related Key
Performance Indicators (KPIs) have been incorporated
into our incentive programs.

The Nordic Board of Directors established a
Sustainability Committee (SC) in 2022, assisting the
Board to maintain the oversight of Nordic’s overall
integration of sustainability in the value creation. An
important part of the tasks of the SC is to assist the
Board in monitoring the company's performance in
accordance with defined ESG criteria that measure our
sustainable performance. The SC has a particular focus
on Climate & Environment topics as well the way Nordic
products and services are used in solutions for climate
change and other sustainability related applications.

The Board Audit Committee (AC) is a preparatory
body that supports the Board in fulfilling its financial
reporting, auditing, and control responsibilities. The
AC oversees that the Group has adequate policies,
procedures, systems, and measures to prevent violation
of relevant rules and regulations, including anti-
corruption and bribery, data privacy, human rights, and
tax. To ensure transparent and reliable data, the AC
also oversees the Group’s external reporting, including
the integrated annual report and its alignment with
relevant regulations and international guidance.

The Board People & Compensation Committee (PCC)
assists the Board in exercising its oversight responsibility,
particularly in relation to compensation. Matters
of principal importance are coherent renumeration
policies and practices, to enable Nordic to attract
and retain executives and employees. This contributes
to create value for shareholders, generate sustained
business performance, and support Nordic’s goals
and values. The PCC focuses on several sustainability
topics, including human capital development, working
conditions, and diversity, equity & inclusion.

On a Nordic management level, the ESG Committee
supports the CEO to develop and maintain the Group's
sustainability framework and drive a holistic and aligned
approach to sustainability across Nordic. The ESG
Committee is chaired by the SVP Legal & Compliance.
It consists of EMT members with dedicated functional
responsibilities within the ESG sphere: SVP QA, EVP
Supply Chain, EVP People & Communication, EVP
Product Management, EVP Finance, and SVP Investor
Relations. The functional responsibilities follow the
principle of integrating sustainability across business
functions, and subject matter expertise to ensure
proximity to the right competencies, key stakeholders,
and relevant business processes.

The Nordic organization integrates our defined
sustainability agenda through line management
leadership within our daily operations, including
following up on our value chain.

UN Global Compact Principles

The United Nations Global Compact is a voluntary
program that encourages businesses to adopt and
implement 10 principles related to human rights, labor,
the environment, and anti-corruption in their operations
and strategies.

Nordic Semiconductor has been a signatory to these
principles since 2016 and has committed to integrating
them into its policies, procedures, and strategies
to ensure that they are firmly integrated into the
Group's foundation.

The ten principles of the UN Global Compact
Human Rights
■ 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
■ 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
■ 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

Our commitments
Responsible Business Alliance

Nordic is a member of the Responsible Business Alliance
(RBA), the world's largest industry coalition dedicated to
corporate social responsibility in global supply chains.

The RBA has established a Code of Conduct (Code),
which sets forth standards on social, environmental, and
ethical issues in the electronics industry supply chain.
The RBA involves a variety of stakeholders from the
business community, government, community groups,
investors, and educational institutions in order to
obtain diverse perspectives and specialized knowledge.
This enables the RBA to review and revise the Code
on an annual basis. For us, this helps to continually
improve our performance and adhere to our values.
The Code is reflected in our internal policies, standards,
audit processes, and agreements with suppliers. It
guides our business and sustainability strategy and
plays an important role in informing our decision-
making processes.

Since 2007, Nordic has committed to following the RBA
Code of Conduct and has aligned its policies with the
Code to improve sustainability performance. In 2021,
Nordic became a member of RBA to further strengthen
our commitment to the Code and engage with our
stakeholders to achieve common industry goals:
Advancing labor rights, health and safety, environment
preservation, and ethics worldwide.

The standards outlined in the Code are aligned with the
UN Guiding Principles on Business and Human Rights,
which are derived from essential international human
rights standards, including the ILO Declaration on
Fundamental Principles and Rights at Work and the UN
Universal Declaration of Human Rights.

Our corporate compliance framework is inspired by
standard management system practices and relevant
regulations, such as the United States Foreign Corrupt
Practices Act, the United Kingdom Bribery Act, and
other relevant national legislation and guidance for
corporate compliance programs.

Common to all our material governance topics and
respective compliance programs is our systematic and
integrated approach, wherein 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 KPIs
as part of our business plan process. We then follow
up through performance management processes and
management reviews.

Anti-corruption
Nordic has a zero-tolerance policy on bribery and
corruption and is committed to conducting business with
high ethical standards. This expectation of commitment
applies to all employees and directors of our Group, as
well as anyone acting on our behalf. The organization
is supported with relevant procedures, guidelines and
training to mitigate bribery and corruption risks.

Nordic 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 suspected misconduct

related to the business of the Group through intranet-
based whistleblower channels, as well as an external
process through our website. Nordic does not tolerate
any retaliation against those who report a concern in
good faith.

Ensuring awareness of and nurturing a culture of
integrity is an essential part of Nordic's compliance
system and our approach to governance. One of our
main achievements in 2022 was to establish an Integrity
Culture Index by integrating defined integrity parameters
into our regular employee engagement surveys. This
index allows us to measure how employees perceive our
internal culture of ethics and integrity. Over time, it will
enable us to measure any changes and define targeted
measures. The overall score is part of our corporate
ESG KPIs, which are part of the evaluation of Long Term
Incentives (LTIs) for the Executive Management Team.
Our baseline is now set and in 2023, we will follow up
on what we learned from the 2022 results.

We continue to focus on enhancements of our
compliance framework in 2023. As part of a Group-
wide employee engagement project, one of our main
activities will be to establish an enhanced Code of
Conduct to support our employees and strengthen our
company culture. Ensuring the possibility of reporting
and adequate follow-up of reports of suspected
violations is an important related task. In 2023, we
will assess the potential of new reporting systems
from 3rd parties and overall management of such
reports. Another main initiative is implementing an
improved business partner screening process and
tool. Both of these initiatives are linked to our Human
Rights program.

Please find more information about the components
of our Anti-Corruption program on our website: Nordic
Semiconductors Anti-Corruption Program - nordicsemi.
com

Data privacy and personal data protection
Nordic Semiconductor ASA (including subsidiaries) is
committed to individuals’ privacy and the protection
of registered personal data. The EU General Data
Protection Regulative (EU GDPR), as well as an
increasing number of global data privacy laws, sets
strict requirements for protection of personal data by
the Group.

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. Employees
responsible for processing personal data are further
trained in how to ensure legal, justified, accurate,
and rightful processing of that data. A dedicated
Privacy Responsible, reporting to Senior Vice President
Legal & Compliance, is responsible for follow-up on
required evaluations of activities and communication
with internal and external stakeholders on matters of
privacy. Annual reports from the Privacy Responsible are
presented in Management Review.

Any incidents of privacy nonconformity are handled
according to Group-defined routines for registration,
investigation, corrective, and preventive actions
(including notifying affected parties and authorities).

Confirmed incidents of corruption and actions taken

Numbers of reports made through whistle-blowing channels

Numbers of whistleblower reports investigated and resolved

Substantiated complaints concerning breaches of customer privacy
and losses of customer data

Number of substantiated complaints or incidents concerning data
breaches1

Target

2022

2021

2020

Annual Information Security awareness training conducted

Yes

Measurements related to governance performance.
¹Identified severe data breach or a complaint lodged with the organization regarding data breaches that has
been recognized as legitimate by the organization

Information security
Information security concerns the protection of
information 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 according to the
standard ISO 27001 Information Security Management
System. Technical and organizational measures are
implemented to protect information, including (but
not limited to) information classification and labeling,
access rights reviews, IT operations, backups, and
physical security. Vulnerability assessments are regularly
conducted on Group systems, and internal and external
audits are carried out to identify improvement potential
annually at minimum.

Cybersecurity is an important aspect of 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 Group has also defined business continuity plans,
with disaster recovery strategies to limit the potential
subsequent risks. Employees regularly conduct internal
training and awareness programs on cybersecurity risks.

Nordic’s IPR policy provides visibility and control over
relevant in-house IP and patent filing. It is an integral
part of project management workflows and milestones,
with related checklists.

Nordic maintains a positive market outlook, supported by the continued strong
demand from tier-1 customers and the gradual easing of constraints. This
outlook supports Nordic's expectation of reaching an annual run rate of USD 1
billion in the second half of 2023, while also maintaining healthy gross margin
levels.

Nordic Semiconductor delivered 27% revenue growth to
USD 777 million for the full year 2022.

Looking to 2023, Nordic sees lower demand for
proprietary products , a near-term slowdown for cellular
IoT, and generally weak demand in China.

Demand from tier-1 customers stays strong, although
wafer supply constraints continue to curb production of
these products. In combination, these factors indicate a
quarterly revenue level of USD 140-160 million in the first
quarter 2023.

Nordic sees higher wafer allocations later in the year,
which will increase delivery capacity. The first quarter
is therefore expected to be a low point in terms
of revenue.

Given the slow start to the year, Nordic no longer
expects to meet its USD 1 billion revenue ambition in
2023, although the Group expects to reach an annual
run rate of USD 1 billion in the second half of the year.

Nordic maintains a positive longer-term market
outlook, and the Group's strong financial position
enables it to continue investing to build a leadership
position in a market with significant growth potential.
The development of a complete connectivity portfolio
across Bluetooth, Wi-Fi and Cellular IoT broadens our
scope of business and opens significant long-term
growth opportunities.

Our growth ambitions obviously lean on assumptions of
economic growth and increasing product demand from
both consumers and industrial customers. The Group will
adapt its investment plans as necessary to reflect any
persistent major changes in economic conditions and/or
customer behavior.

Gross margin was 53% in the fourth quarter and 56%
for the full year 2022. The Group expects a gross margin
level above 52% for the first quarter of 2023. The Group
reiterates its long-term ambition to maintain a gross
margin level above 50%.

The parent company Nordic Semiconductor ASA has
a net profit after tax of USD 116.9 million in 2022,
compared to USD 65.7 million in 2021.

The entire net profit is attributable to the equity holders
of the parent. Net profit after tax corresponds with
ordinary earnings of USD 0.61 and fully diluted earnings
per share of USD 0.61 for 2022. This compares to
ordinary and fully diluted earnings per share in 2021 of
USD 0.34 and 0.34, respectively.

Nordic pursues an ambitious long-term growth strategy
which requires significant investments in R&D, 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 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 2022.

In accordance with the provisions of the Norwegian
Accounting Act, the Board of Directors confirms that
accounts have been prepared on a going-concern basis
and that the going-concern assumption applies.

Oslo, March 17, 2023

Jan Frykhammar

Board member

Birger Steen

Chair

Anita Huun

Board member

Inger Berg Ørstavik

Board member

Svenn-Tore Larsen

Chief Executive Officer

Endre Holen

Board member

Øyvind Birkenes

Board member

Jon Helge Nistad

Annastiina Hintsa

Gro Fykse

Anja Dekens

Morten Dammen

Board member, employee

Board member

Board member, employee

Financial statements

Responsibility statement Audit opinion letterAppendicesIncome statementsStatement of Financial PositionCash FlowDisclosuresAlternate Performance MeasuresMessage from the CEONordic at a glanceReport from the Board of Directors Financial statements05060701020304Income statement
for the year ended December 31

GROUP

2022

2021 Amount in USD 1000

776 734

610 528 Total Revenue

-339 941

-283 415 Cost of materials

-472 Direct project costs

436 793

326 640 Gross profit

-161 440

-149 824 Payroll expenses

-69 685

-52 098 Other operating expenses

-44 067

-37 798 Depreciation

161 602

86 920 Operating profit

6 205

-1 270

619

730 Financial income

-1 129 Financial expenses

739 Net foreign exchange gains (losses)

167 155

87 260 Profit before tax

-44 817

-16 089 Income tax expense

122 339

71 171 Net profit after tax

Attributable to:

122 339

71 171 Equity holders of the parent

0.64

0.63

2022

0.37 Ordinary earnings per share (USD)

0.37 Fully diluted earnings per share (USD)

2021 Statement of comprehensive income

122 339

71 171 Net profit after tax

-13

-150

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

33 Income tax effect

-593

-1 186 Currency translation differences

121 807

69 868 Total Comprehensive Income

Attributable to:

121 807

69 868 Equity holders of the parent

Note

9/10/12/18

5/11

11/12/21

6/22/23

6/21/22/23

6/22

PARENT

2022

777 763

-339 941

437 822

-80 872

-166 328

-36 966

153 656

6 171

-1 094

673

159 405

-42 463

116 942

2021

611 577

-283 415

-472

327 690

-84 483

-130 450

-32 893

79 864

737

-1 001

704

80 305

-14 618

65 687

116 942

65 687

2022

2021

116 942

65 687

-13

-150

117 003

65 570

117 003

65 570

GROUP

2022

2021 Amount in USD 1000

ASSETS

Non-current assets

2 386 Goodwill

31 542 Capitalized development expenses

15 764 Software and other intangible assets

6 331 Deferred tax assets

18 935 Right of use assets

2 284

26 608

11 655

4 554

21 416

35 603

33 885 Fixed assets

0 Shares in subsidiaries

102 120

108 844 Total non-current assets

102 091

175 120

267

17 539

379 104

Current assets

54 943 Inventory

141 748 Accounts receivable

0 Current financial assets

11 951 Other current receivables

279 331 Cash and cash equivalents

674 121

487 973 Total current assets

776 241

596 817 TOTAL ASSETS

Note

2022

2021

PARENT

11/22/23

1/13

14/22/23

22/23

15/22/23

16/22/23

249

26 608

10 726

3 808

12 076

25 271

10 055

88 793

102 091

175 120

267

21 884

249

31 542

15 232

5 748

14 923

28 824

6 696

103 215

54 943

141 748

11 283

369 709

273 430

669 070

481 405

757 864

584 620

EQUITY

317

317 Share Capital

235 448

235 448 Share premium

347 779

222 443 Other components of equity

583 544

458 209 Total equity

LIABILITIES

Non-current liabilities

580 Pension liabilities

14 281 Non-current lease liabilities

14 861 Total non-current liabilities

Current liabilities

28 392 Accounts payable

17 427 Income taxes payable

7 599 Public duties

5 594 Current lease liabilities

520 Current financial liabilities

64 215 Other current liabilities

123 747 Total current liabilities

676

14 861

15 537

34 229

43 758

6 455

6 280

86 439

177 160

192 697

138 608 Total liabilities

776 241

596 817 TOTAL EQUITY AND LIABILITIES

21/22/23

20/22/23

21/22/23

22/23

15/20/23

317

235 448

325 308

204 924

561 074

440 690

430

8 711

9 141

32 335

42 837

4 745

2 813

104 918

187 648

554

11 673

12 226

27 558

17 181

6 266

3 921

520

76 258

131 703

196 790

143 930

757 864

584 620

Oslo, March 17, 2023

Jan Frykhammar

Board member

Birger Steen

Chair

Anita Huun

Board member

Inger Berg Ørstavik

Board member

Svenn-Tore Larsen

Chief Executive Officer

Endre Holen

Board member

Øyvind Birkenes

Board member

Jon Helge Nistad

Board member, employee

Annastiina Hintsa

Board member

Gro Fykse

Anja Dekens

Morten Dammen

Board member, employee

Amount in USD 1000

Share capital

Treasury shares

Share premium

Other paid in
capital

Currency
translation
reserve

Retained earnings

Total equity

Equity as of 01.01.2021

Net profit for the period

Other comprehensive income

Share based compensation

Option exercise

Equity as of 31.12.2021

Net profit for the period

Other comprehensive income

Share based compensation

Option exercise

Equity as of 31.12.2022

Nordic Semiconductor Parent
Statement of changes in equity
Amount in USD 1000

Equity as of 01.01.2021

Net profit for the period

Other comprehensive income

Share based compensation

Option exercise

Equity as of 31.12.2021

Net profit for the period

Other comprehensive income

Share based compensation

Option exercise

Equity as of 31.12.2022

317

-2

235 448

15 980

379

150 368

402 492

317

-2

235 448

317

-2

235 448

-1 185

-806

-593

71 171

-117

221 421

122 339

-1 399

343 820

71 171

-1 302

6 670

-20 821

458 209

122 339

-532

7 769

-4 240

583 544

6 670

-20 821

1 830

7 769

-4 240

5 359

Share capital

Treasury shares

Share premium Other paid in capital

Retained earnings

Total equity

317

-3

235 448

14 219

317

-3

235 448

317

-2

235 448

6 670

-20 816

7 621

-4 240

3 456

139 283

65 687

-117

204 853

116 942

321 856

389 266

65 687

-117

6 670

-20 816

440 690

116 942

7 621

-4 239

561 074

GROUP

2022

2021 Amount in USD 1000

Cash flows from operating activities

87 260 Profit before tax

-6 332 Taxes paid for the period

37 798 Depreciation and amortization

-41 043 Change in inventories, trade receivables and payables

6 670 Share-based compensation

134 Pension fund payments

11 332 Other operations related adjustments

95 818 Net cash flows from operating activities

Cash flows used in investing activities

-25 050 Capital expenditures (including software)

-5 644 Capitalized development expenses

167 155

-16 760

44 067

-74 595

7 794

104

14 947

142 711

-24 065

-6 489

0 Investment in subsidiaries

-30 554

-30 694 Net cash flows used in investing activities

Cash flows from financing activities

-4 727

-20 758 Cash settlement of options contract

-6 609

-6 493 Repayment of lease liabilities

-11 336

-27 250 Net cash flows from financing activities

-1 049

-1 090 Effects of exchange rate changes on cash and cash equivalents

99 772

36 784 Net change in cash and cash equivalents

279 331

242 547 Cash and cash equivalents as of 1.1.

379 104

279 331 Cash and cash equivalents as of 31.12.

2 479

2 285 Restricted cash incl. in the cash and cash equivalents as of 31.12.

PARENT

Note

2022

2021

11/12/21

4/14/20/22

11/12

159 405

-15 967

36 966

-75 743

4 554

-46

19 136

128 305

-17 038

-6 489

80 305

-5 045

32 893

-40 204

4 359

106

16 460

88 873

-20 301

-5 644

-2 878

-23 527

-28 824

-4 727

-3 773

-20 758

-4 476

-8 500

-25 234

96 279

34 815

273 430

238 615

16/22

369 709

273 430

2 479

2 285

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statement Audit opinion letterAppendicesIncome statementsStatement of Financial PositionCash FlowDisclosuresAlternate Performance MeasuresGross 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, Industrial, Healthcare, and
Other. 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,
2023, and will be presented for approval at the Annual
General Meeting on April 2th, 2023.

1.3 Accounting standards adopted in 2022
In 2022, there are few revisions by the International
Accounting Standards Board to the financial reporting
requirements in accounting policies. There are no
amendments that significantly effects the financial
reporting in 2022.

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 its wholly owned subsidiaries,
as specified in Note 13: Subsidiaries.

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 1400 employees across the globe. The
Group’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. In 2018,
Nordic launched its low power, compact LTE-M/NB-IoT
cellular IoT solutions to extend the penetration of 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, 2022. 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.

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.

currently holds low volume of assets that are dependent
on assessment of future cashflows. Hence, the climate
risk is assessed to have low impact on current financial
statement although it may impact the Group's future as
described in Report from the Board of Directors.

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 2022,
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.

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. The Group's Financial Statement

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 1-5 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 2022
USD 6.5 million was capitalized. The carrying amount
of capitalized development costs as of December
31, 2022 and 2021 was USD 27 million and USD 32
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
intercompany 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.

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).

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statement Audit opinion letterAppendicesIncome statementsStatement of Financial PositionCash FlowDisclosuresAlternate Performance Measures2.3 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.

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.

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.

■ 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
1-5 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 3-10 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.

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

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 are 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

Computer equipment

3-5 years

3-4 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.

■ 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.

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, other financial
assets, other current receivables, accounts payable, and
other current payables.

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 fair value through profit and loss 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.

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 and short-term time deposits 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 according to the
FIFO principle 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. Cost of inventories
includes purchase price of raw materials and costs
directly related to the conversion of materials into
finished goods. They also include fixed and variable
overheads which can be allocated to items based on
normal capacity.

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 Group applies standard cost method to measure
cost of inventories. The cost on products with high
sales volume is reviewed monthly, and quarterly for
other goods. Standard cost variance is the difference
between standard cost and actual cost. This variance is
impacting the cost of goods sold, and the variance is
monitored on a regular basis.

■ 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

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.

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

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

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statement Audit opinion letterAppendicesIncome statementsStatement of Financial PositionCash FlowDisclosuresAlternate Performance Measurespayments 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, 2022.

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

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.

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.

2.16 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.

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.

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,
Industrial, Healthcare and Others. In 2022, wireless components accounted for 99.4%
of sales versus 98.9% in 2021. In addition to standard components, the Group sells
customer-specific ASIC components (Application Specific Integrated Circuits) and
related Consulting Services.

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.

GROUP

2022

2021 Revenue

483 799

408 156 Consumer

191 543

67 623

29 163

141 936 Industrial

35 575 Healthcare

18 376 Others

772 128

604 044 Wireless components

4 607

6 083 ASIC components

400 Consulting services

0 Management fee

PARENT

2022

483 799

191 543

67 623

29 163

2021

408 156

141 936

35 575

18 376

772 128

604 044

4 607

1 029

6 083

400

1 049

776 734

610 528 Total revenue from contracts with customers

777 763

611 577

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. Two distributors were above 10% of revenue in 2022, with 34% and
12% of total revenue respectively. Both distributors are in Asia. In comparison, one
distributor represented more than 10% of the Group’s total revenues in 2021 with 28% of
total revenues.

Revenue from contracts with customers classified by timing of revenue recognition:

GROUP

2022

2021

776 734

610 128 Goods transferred at a point in time

400 Services transferred over time

776 734

610 528 Total revenue from contracts with customers

PARENT

2022

776 734

1 029

777 763

2021

610 128

1 449

611 577

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

2022

2021

175 120

141 748 Trade receivables

3.3 Refund liabilities

GROUP

2022

30 694

23 382

2021

20 530 Refund liability – from ship & debit

10 757 Refund liability – from end-customer rebates

PARENT

2022

2021

175 120

141 748

PARENT

2022

30 694

23 382

2021

20 530

10 757

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

GROUP

2022

97 868

107 966

570 899

776 734

2021

53 116 Europe

61 663 Americas

495 749 Asia/Pacific

610 528 Total revenue from contracts with customers

PARENT

2022

98 679

108 123

570 961

777 763

2021

53 886

61 910

495 781

611 577

3.4 Performance obligations
The performance obligations for the sale of components are 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.

GROUP

2022

2021

387 088

276 402 Purchased materials

-47 147

7 012 Changes in inventory

339 941

283 415 Cost of materials

34 356

25 380

42 355

102 091

5 006

9 704 Raw materials

18 440 Work in Progress

26 799 Finished goods

54 943 Total inventory

5 712 Amount Written down

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

PARENT

2022

2021

387 088

276 402

-47 147

7 012

339 941

283 415

34 356

25 380

42 355

102 091

5 006

9 704

18 440

26 799

54 943

5 712

GROUP

2022

109

—

128

2021

90 Audit services

4 Other attestation Services

3 Tax advisory Services

— Other Non Audit Services

96 Total revenues

Note 6: Net financial items
All figures in USD 1 000

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 1 000

GROUP

PARENT

2022

24 837

17 422

2 301

1 956

11 401

-57

-2 034

3 585

10 274

—

2021

19 580 Service and maintenance

15 527 Other consultancy fees

1 582 Office expenses

1 558 Office equipment

6 198 Material and components

-108 Tax grant

-1 515 Capitalized development expenses

1 068 Travel and meeting expenses

8 207 Other operating expenses

— Other operating expenses intercompany

2022

23 222

12 318

1 088

1 246

9 720

-57

-2 036

1 799

8 448

110 581

2021

18 288

11 658

1 030

1 201

5 142

-108

-1 515

742

7 297

86 715

69 685

52 097 Total other operating expenses

166 328

130 450

GROUP

PARENT

2022

5 230

972

6 202

621

646

1 267

-619

5 554

2021

340 Interest income

389 Other financial income

730 Financial income

822 Interest expenses on lease liabilities

307 Other financial expense

1 128 Financial expense

-739 Foreign exchange loss (net)

340 Net financial

2022

5 203

968

6 171

478

616

1 094

-673

5 749

PARENT

2022

2021

—

107

—

2021

350

387

737

733

268

1 001

-704

441

GROUP

2022

2021 Tax consists of

-43 907

-17 427 Tax payable

-2 102

—

1 192

2 663 Change in deferred tax / benefit

— Group contribution, tax amount

-1 325 Other items

PARENT

2022

-42 837

-1 940

-83

2 397

2021

-17 181

2 719

—

-156

-44 817

-16 089 Tax expense

-42 463

-14 618

GROUP

2022

2021

Reconciliation of nominal and actual tax
expense

167 155

-36 774

518

726

-265

-9 064

-44 817

87 260 Profit before tax

-19 197 Tax at nominal rate 22 %

47 Tax effect of different tax rates in other countries

4 605 Tax effect permanent differences

— Credit for tax paid

25 Excess tax provision previous year

-1 568 Currency effect from translation to USD

-16 089 Tax expense

PARENT

2022

2021

159 405

-35 069

1 527

—

-9 061

-42 463

80 305

-17 667

-89

4 679

—

-1 566

-14 618

The Group has not recognized net deferred tax benefit of USD 34 related to the
subsidiary in India.

GROUP

Deferred taxes:

Inventory

Fixed Assets

Leasing

Options (share based payments)

Pension obligation

Financial instrument

Accruals

Balance sheet

Income
statement

2022

757

2021

1 517

2022

600

2021

1 023

3 267

2 439

-1 178

177

— 1 729

-145

1 547

—

341

122

114

489

-3

—

212

613

-121

747

-10

344

Deferred tax benefit - gross

4 637

6 446

1 033

2 644

Gain and loss account

Net other tax-obligations

Financial instrument

Deferred tax obligation - gross

Currency effect of translation to USD

—

115

-161

-82

-21

-10

—

165

Net deferred tax benefit (obligation)

4 554

6 331

Other. Comp.
income

2022

2021

—

Deferred tax expense

1 094

2 795

PARENT

Deferred taxes:

Inventory

Fixed Assets

Leasing

Options (share based payments)

Pension obligation

Financial instrument

Accruals

Balance sheet

Income
statement

2022

757

2021

1 517

2022

600

2021

1 023

2 836

2 044

-1 008

173

— 1 729

—

122

114

302

857

-121

747

-10

157

2 701

-10

—

127

-140

1 547

-3

—

240

1 236

-161

-85

-9

Other. Comp.
income

2022

2021

—

Deferred tax expense

1 312

2 813

Deferred tax benefit - gross

3 891

5 864

Gain and loss account

Net other tax-obligations

Financial instrument

Deferred tax obligation - gross

Currency effect of translation to USD

—

115

Net deferred tax benefit (obligation)

3 808

5 749

2022

6 331

-1 083

-711

2021 Reconciliation of net deferred tax obligation

3 668 Opening balance as of 1.1

2 795 Tax expense recognized in the P&L

33 Tax expense recognized in OCI

-165 Currency effect from translation to USD

4 550

6 331 Net deferred tax obligation / benefit 31.12

GROUP

2022

2021 Net deferred tax recognized in OCI as of 31.12

33 Net gain on actuarial gains and losses

33 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)

PARENT

2022

5 748

-1 312

-645

3 804

PARENT

2022

2021

3 029

2 813

-127

5 748

2021

2022

122 339

191 365

0.64

122 339

192 739

0.63

2021

71 171

190 961

0.37

71 171

193 042

0.37

The number of shares was as follows:
Date

01.01.2022

31.12.2022

Opening balance

Closing balance

Shares issued

Shares outstanding

192 781 600

190 962 563

191 575 087

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.

Note 9: Payroll expenses
All figures in USD 1 000

GROUP

2022

2021

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

115 380

28 335

11 704

-424

10 898

-4 453

104 476 Salary and vacation pay

25 239 Other compensation

14 011 Payroll tax

-431 Tax grant

10 650 Defined contribution pension

-4 121 Capitalized development expenses (hourly costs)

161 440

149 824 Total

1 311

1 090 Weighted average number of full time employees

GROUP

2022

2021

Employees as of December 31, are distributed as
follows:

612

322

115

518 Norway

273 Finland

93 Poland

52 India

49 USA

49 Taiwan

48 UK

34 Philippines

28 Sweden

19 China

13 Hong Kong

5 South Korea

4 Germany

3 Japan

3 The Netherlands

2 Spain

2 Australia

1 Switzerland

1 Singapore

PARENT

2022

2021

57 004

15 448

8 692

-424

4 606

-4 453

80 872

647

56 579

16 747

11 869

-431

3 840

-4 121

84 483

599

PARENT

2022

612

2021

518

—

1 435

1 197 Total

662

634

presented below. This includes an overview of the operational, financial, environmental,
social and governance targets that form basis for the short-term incentives.

Note 10.1: Management remuneration
Pursuant to the changes in the Public Limited Liability Companies Act, i.e., the 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 20 April 2023, containing detailed information on remuneration to Executive
Management Team (EMT) for the reporting year 2022. The remuneration report
includes detailed information on EMTs remuneration complementing the numbers

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 2022 and 2021.

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:

2022

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 & Communication

Linda Pettersson, SVP Legal & Compliance****

Ola Boström, SVP Quality & Sustainability****

Total

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 & Communication

Total

Salary

Bonus

Options &
PSU**

RSUs &
PSUs

Other Comp.

Pension
expenses

461

273

308

290

189

303

121

203

227

136

160

185

112

118

—

267

124

140

150

—

103

2 873

Salary

958

Bonus

299

Options &
PSU**

1 168

RSUs &
PSUs

Other Comp.

425

Pension
expenses

488

289

327

306

203

328

182

224

208

239

270

143

162

168

109

101

118

237

112

128

132

2 794

1 355

1 063

Total

1 072

575

657

648

387

538

150

406

417

453

198

257

5 758

Total

1 027

571

645

633

399

552

361

424

407

451

179

5 470

*Management compensation is paid in NOK. Exchange rate for 2022: 9.62 and 2021: 8.56
**Option cost is the expense of fair value of options based on Black Scholes calculation
***Includes expat allowances
****Marianne Frydenlund and Ebbe Rømcke were no longer a part of the EMT by year end 2022. Linda Pettersson and Ola Boström joined the
EMT during 2022, in July and August respectively

EMT member

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 & Communication

During 2022 the executives exercised the following options:

Executives

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 &
Communication

Grant year

2019 Option

2019 PSU

2019 Option

2019 PSU

2019 Option

2019 PSU

2019 Option

2019 PSU

2019 Option

2019 PSU

2019 Option

2019 PSU

2019 Option

2019 PSU

2019 Option

2019 PSU

2019 Option

2019 PSU

2019 Option

Number
of options
exercised

Strike price
in NOK

Cash
payout in
USD 1000

12 721

26 872

7 880

12 804

9 381

15 244

8 256

13 414

5 254

8 536

6 567

10 670

4 315

7 012

5 816

9 452

4 691

7 622

6 667

45.10

119

533

254

302

266

168

212

138

187

*The RSU for management vest after three years for management two years for employees
** Purchased shares, no cash payout from the company
*** Grant in 2022 due to ended employment contract

2022

2021

6 532 RSUs

3 193 RSUs

3 609 RSUs

3 379 RSUs

2 111 RSUs

2 429 RSUs

0 RSUs

2 087 RSUs

2 380 RSUs

2 662 RSUs

6 532 PSUs

3 193 PSUs

3 609 PSUs

3 379 PSUs

2 111 PSUs

2 429 PSUs

0 PSUs

2 087 PSUs

2 380 PSUs

2 662 PSUs

10 933 RSUs

3 056 RSUs

3 455 RSUs

6 139 RSUs

2 059 RSUs

2 325 RSUs

1 927 RSUs

2 066 RSUs

2 156 RSUs

2 524 RSUs

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)

Susheel Nuguru, Board Employee Representative (Board remuneration
only)

Morten Dammen, Board Employee Representative (Board remuneration
only)

Joel Stapleton, Board Employee Representative (Board remuneration only)

Gro Fykse, Board Employee Representative (Board remuneration only)

Anja Dekens, Board Employee Representative (Board remuneration only)

6 213 PSUs

3 056 PSUs

3 455 PSUs

3 189 PSUs

2 059 PSUs

2 325 PSUs

1 927 PSUs

2 066 PSUs

2 156 PSUs

2 524 PSUs

2022

165

2021

132

Total

659

554

*Numbers noted in USD and converted from NOK using USD/NOK rate of 9,62 for 2022 and 8,56 for 2021.

GROUP

2022

Opening balance

Additions

Disposals

Acqusition cost as of 31.12

Opening balance

Depreciation expenses

Disposals

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

PARENT

2022

Opening balance

Additions

Disposals

Acqusition cost as of 31.12

Opening balance

Depreciation expenses

Diposals

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

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

Office and lab
equipment

Computer
equipment and
machinery

Fixture and fittings

Property

37 980

8 027

-6 163

39 843

25 192

7 485

-6 163

26 514

13 329

66 006

11 492

-32 826

44 673

47 999

10 781

-32 825

25 955

18 716

6 716

1 374

-1 950

6 138

3 958

990

-2 032

2 916

3 222

333

—

333

—

333

Total

111 035

20 893

-40 939

90 989

77 149

19 257

-41 020

55 384

35 603

Office and lab
equipment

Computer
equipment and
machinery

Fixture and fittings

Property

Total

25 482

2 818

-10 038

18 262

15 563

4 402

-7 753

12 212

6 050

61 891

11 315

-32 650

40 555

45 382

10 334

-32 589

23 127

17 429

5 469

771

-3 262

2 977

3 404

577

-2 465

1 517

1 460

333

—

333

—

333

Office and lab
equipment

Computer
equipment and
machinery

Fixture and fittings

Property

30 055

7 925

37 980

18 725

6 468

25 192

12 788

53 470

12 536

66 006

39 302

8 697

47 999

18 007

5 556

1 159

6 716

3 104

854

3 958

2 757

333

—

333

—

333

93 174

14 903

-45 950

62 126

64 349

15 313

-42 807

36 855

25 271

Total

89 414

21 619

111 034

61 131

16 019

77 149

33 885

Computer
equipment and
machinery

Fixture and fittings

Property

20 565

4 917

25 482

11 031

4 532

15 563

9 919

50 051

11 840

61 891

37 014

8 368

45 382

16 509

3 - 5 years

Straight-line

3 - 4 years

Straight-line

4 795

674

5 469

2 737

667

3 404

2 064

5 years

333

—

333

—

333

Straight-line

No depreciation

Total

75 743

17 430

93 174

50 782

13 567

64 349

28 824

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 AND PARENT

Estimated useful life

Depreciation method

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

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 temporarily out of operation.

Impairment
There have 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

2022

Acquisition cost

Opening balance

Additions

Disposals

Acqusition cost as of 31.12

Accumulated depreciation

Opening balance

Depreciation expenses

Disposals

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

PARENT

2022

Acquisition cost

Opening balance

Additions

Disposals

Acqusition cost as of 31.12

Accumulated depreciation

Opening balance

Depreciation expenses

Disposals

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

Estimated useful life

Depreciation method

GROUP

R&D expenses:

98 672 Personnel expenses

38 488 Other operating expenses

137 160 Total cost recognized in income statement

143 649 Total cost for R&D (incl. capitalized development cost)

Software and other
intangible assets

Capitalized development
expenses

Goodwill

Total

50 896

2 909

-22 684

31 121

35 132

7 068

-22 734

19 466

11 655

80 019

6 489

-29 491

57 015

48 477

11 423

-29 491

30 408

26 608

2 386

-102

—

2 284

—

2 284

133 302

9 297

-52 175

90 424

83 609

18 491

-52 225

49 874

40 547

Software and other
intangible assets

Capitalized development
expenses

Goodwill

Total

49 387

2 135

-22 683

28 839

34 155

6 642

-22 683

18 114

10 726

80 017

6 489

-29 491

57 015

48 476

11 423

-29 491

30 408

26 608

249

—

249

—

249

129 653

8 624

-52 174

86 103

82 631

18 065

-52 174

48 522

37 583

3 - 10 years

Straight-line

1 - 5 years

No depreciation

Straight-line

PARENT

40 232

29 209

69 441

75 930

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

Estimated useful life

Depreciation method

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)

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

—

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

—

249

121 140

8 514

129 653

67 042

15 589

82 631

47 022

3 - 10 years

Straight-line

1 - 5 years

Straight-line

No depreciation

PARENT

49 886

25 335

75 221

80 866

Impairment
There have 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.

The following subsidiaries have been included in the financial statements:

Established
Year

Location

Share
Ownership

Voting
Rights

Subsidiaries consolidated in

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

2006

2013

2014

2017

2018

2020

USA

Poland

Finland

Japan

Germany

Norway

India

Sweden

Nordic Semiconductor Hong Kong Limited

2021 Hong Kong

Nordic Semiconductor (Shenzhen) Limited

Nordic Semiconductor Singapore PTE Ltd

Nordic Semiconductor Denmark ApS

Nordic Semiconductor Philippines, Inc.

2021

2022

China

Singapore

Denmark

Philippines

100%

Subsidiaries as of 31 December 2022

Ownership

Share of
votes

Net profit
2022

Equity 31.
Dec 2022

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

Nordic Semiconductor Singapore PTE Ltd

Nordic Semiconductor Denmark ApS

Nordic Semiconductor Philippines, Inc.

100%

407

1 106

2 513

507

388

351

112

176

-8

3 551

3 061

17 423

110

115

3 674

2 149

1 794

749

300

257

140

-8

■ 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, product promotion, and support

company, but since 2016 has 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, product promotion, and

support company,

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

and support company.

■ Nordic Semiconductor (Shenzhen) Limited is a market development, product promotion,

and support company.

■ Nordic Semiconductor Singapore PTE Ltd is Nordic's regional head office in APAC.

■ Nordic Semiconductor Denmark ApS is a development company working across

technologies. The R&D team in the Denmark works closely alongside the rest of the R&D
teams in the Group.

■ Nordic Semiconductor Philippines, Inc. is a development company working across

technologies. The R&D team in the Philippines works closely alongside the rest of the
R&D teams in the Group.

GROUP

2022

175 120

—

2021

141 748 Gross receivables

236 Provision for doubtful accounts

175 120

141 984 Accounts receivable, net

Note 15: Intercompany
All figures in USD 1 000

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 1 000

GROUP

2022

2021

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

277 700

223 786 Cash at bank

2 479

50 467

48 458

2 285 Restricted cash (withholding tax account)

— Short-term bank deposits

53 259 Money market funds

379 104

279 330

Cash and cash equivalents in statement of
financial position

PARENT

2022

2021

268 304

217 886

2 479

50 467

48 458

2 285

—

53 259

369 709

273 430

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

■ Nordic Semiconductor ASA 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 the company. Nordic Semiconductor ASA and Nordic Semiconductor OY
participate in the cash pool, which is operated by Danske Bank.

■ Restricted deposits are held by Nordic Semiconductor ASA. They are subject to

regulatory restrictions and are therefore not available for general use by the entities
within the Group.

■

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

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

PARENT

2022

175 120

—

2021

141 748

236

175 120

141 984

2022

—

10 486

—

31 994

2022

1 029

110 581

2021

—

1 692

—

25 596

2021

1 049

86 715

100

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statement Audit opinion letterAppendicesIncome statementsStatement of Financial PositionCash FlowDisclosuresAlternate Performance MeasuresNote 17: Share capital and shareholder information
Share capital
The share capital in Nordic Semiconductor as of December 31, 2022 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 preemptive 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

Holdings as of 1.1

Change in treasury shares

Holdings as of 31.12

Dividend
No dividend was paid during 2022.

Treasury shares
The company owned 1,206,513 treasury shares on December 31, 2022. On January
1, 2022, the company owned 1,819,037 treasury shares. Based on a resolution of the
annual general meeting of April 28, 2022, 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 350. This authority applies until the
company’s annual general meeting in 2023, and by June 30, 2023 the latest.

Long-Term Incentive plan
With reference to the annual general meeting, on April 28, 2022, 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.

Shareholder overview
The largest shareholders in Nordic Semiconductor ASA were as follows as of
December 31, 2022 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.

Number of shares

Share capital
(USD 1000)

Treasury shares
(USD 1000)

Share premium
(USD 1000)

2022

2021

192 781 600

2022

317

2021

317

192 781 600

317

2022

2021

2022

2021

-3

-2

-3

235 448

Shareholder

Folketrygdfondet

Capital Research and Management

DNB Asset Management

Danske Bank

The Vanguard Group

Invesco Advisers

Hardman Johnston Global Advisors

Alfred Berg Kapitalforvaltning

Swedbank Robur Fonder

KLP Kapitalforvaltning

Oberweis Asset Management

Robeco Institutional Asset Management

Contour Asset Management

Handelsbanken Fonder

Passesta

RBC Global Asset Management

Eika Kapitalforvaltning

BlackRock Fund Advisors

Storebrand Asset Management

Alden

Total for the 20 largest shareholders

Other shareholders

Total shares outstanding

17 077 869

11 662 016

9 405 822

6 022 054

5 539 580

5 089 089

4 847 702

4 473 230

4 240 000

4 177 632

4 104 644

3 675 000

3 035 986

2 808 596

2 700 000

2 669 001

2 535 666

2 271 762

2 036 606

2 000 000

100 372 255

92 409 345

192 781 600

Percentage

8.9%

6.0%

4.9%

3.1%

2.9%

2.6%

2.5%

2.3%

2.2%

2.1%

1.9%

1.6%

1.5%

1.4%

1.3%

1.2%

1.1%

1.0%

52.1%

47.9%

100.0%

101

*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.

Board of Directors

Birger Steen

Endre Holen

Jan Frykhammar

Anita Huun

Øyvind Birkenes

Inger Berg Ørstavik

Annastiina Hintsa

Jon Helge Nistad

Anja Dekens

Morten Dammen

Gro Fykse

Total

196 840

154 888

24 258

13 258

10 600

5 258

4 258

600

300

1 150

850

Executive Management Shares

Svenn-Tore Larsen

1 932 272

Geir Langeland

Ole Fredrik Morken

Ståle Ytterdal

Ola Bostrøm

Pål Elstad

Svein-Egil Nielsen

Kjetil Holstad

Linda Pettersson

Katarina Finneng

201 114

190 670

135 452

575

31 650

32 244

10 415

600

All figures in USD 1 000
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

412 260

Total

2 534 992

Total actual net obligation ink. Social security tax

2022

2021

—

-13

2022

1 091

899

192

219

2022

219

211

—

216

676

—

-14

2021

1 195

964

231

263

2021

263

290

—

580

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 2022 the pension liability was USD 210,944.

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:

102

Total pension liability for the Group

Employees in Norway

Employees in Philippines

Employees in the UK

Employees in Poland

Employees in India

Total

Defined contribution pension plan
All employees in Norway have a defined contribution pension plan from January 1,
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. In addition to this, the company offers
a disability pension of approximately 66% of salary including estimated social security
based on 40 years of full employment. In 2022, the cost of the defined contribution
pension was USD 4,553,944, and the plan had 708 members.

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statement Audit opinion letterAppendicesIncome statementsStatement of Financial PositionCash FlowDisclosuresAlternate Performance MeasuresNote 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.

On April 28, 2022, Nordic Semiconductor granted 486,677 Restricted Stock Units (RSUs)
and Performance shares to 1,288 employees. A share price of NOK 183.8 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 2022 and 2021 below:

2022

2021

Outstanding options 1.1

Granted

Forfeited

Exercised

Expired

Outstanding options 31.12

Of which exercisable

A summary of RSUs transactions during 2022 and 2021 below:

Outstanding RSUs 1.1

Granted

Forfeited

Exercised

545 203

2 548 589

—

705

—

28 992

544 498

1 974 394

—

2022

1 058 947

486 677

50 340

492 780

—

545 203

—

2021

690 617

423 383

55 053

—

Outstanding RSUs 31.12

1 002 504

1 058 947

A summary of performance shares during 2022 and 2021 below:

Outstanding performance shares 1.1

Granted

Forfeited

Exercised

Outstanding performance shares 31.12

2022

142 990

30 376

7 921

111 626

53 819

2021

114 020

28 970

—

142 990

The fair value of the options, RSUs and performance shares are set on the grant date
and expensed over the vesting period. USD 7,797 thousand was expensed during 2022
and USD 4,287 thousand in 2021.

The fair value per RSU and performance share without market condition granted
in 2022 was NOK 236.00 and 177.50. The fair value of the performance shares
with Relative Total Shareholder Return performance condition granted in 2022 was
NOK 270.1612. The valuation is based on a Monte Carlo simulation model with the
following assumptions:

Share price on the grant date
The closing share price of the company and peer group companies (SOX Index) were
NOK 177.35 and USD 2,982.06, 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 2022, i.e. 2.676 % in Norway and US.

103

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statement Audit opinion letterAppendicesIncome statementsStatement of Financial PositionCash FlowDisclosuresAlternate Performance MeasuresVolatility
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
47.89% on the date of grant in 2022 for the company and 37.92% for the SOX Index.

Expected lifetime
Performance shares vest on the April 28, 2025. Performance end date is December 31,
2024, so as of vesting date the quantity to vest is known. Performance shares expire 3
years from grant date, i.e. 28th of April 2025.

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 1 000

GROUP

2022

34 229

43 758

14 542

6 455

10 129

30 694

23 382

2021

28 392 Accounts payable

— Accounts payable from subsidiaries

17 427 Taxes payable

17 452 Employee benefit obligations

7 599 Social security tax and payroll tax

8 620 Holiday pay

20 530 Ship and debit rebate

10 757 End-customer rebate

1 011 Contractual severance payment

567 Legal claims

6 280

5 594 Current lease liabilities

7 547

145

520 Currency swap

5 197 Accrued expenses

79 Other current liabilities

177 160

123 747 Total current liabilities

PARENT

2022

32 335

31 994

42 837

7 333

4 745

5 991

30 694

23 382

—

2 813

—

5 450

2021

27 558

25 596

17 181

10 312

6 266

5 548

20 530

10 757

—

567

3 921

520

2 879

Note 21: Leases
All figures in USD 1 000.

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 7 years. Equipment and machinery leases
range between 1 to 5 years. Vehicles are leased for less than 4 years.

There are no leases with variable lease payments, other than lease payments linked to
a 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 2022, there have been no material rent concessions as a direct consequence of the
Covid-19 pandemic.

In 2022, Nordic Semiconductor ASA signed an office rental agreement in Oslo with
an expected commencement date of 1 April 2023 and an office rental agreement
in Trondheim with a commencement date of 1 October 2027. Nordic Semiconductor
UK Limited has signed an office rental agreement in Bristol with an expected
commencement date of 4 May 2023

Below is the contractual cash flow of right to use assets and short-term leases with
commencement date after balance sheet date.

GROUP

Carrying
amount

Contractual
cash flow

Less than
one year

One to five
years

More than
five years

Office lease commitments

187 648

131 703

Short-term leases

Total

—

253 479

196

253 675

4 505

196

4 701

51 303

—

51 303

197 670

—

197 670

104

PARENT

Carrying
amount

Contractual
cash flow

Less than
one year

One to five
years

More than
five years

Office lease commitments

Short-term leases

Total

—

248 927

—

248 927

3 748

—

3 748

47 508

197 670

—

47 508

197 670

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

GROUP

31.12.2022

31.12.2021 Right of use assets

18 786 Property

149 Office equipment and machinery

18 935 Total

21 416

—

21 416

GROUP

31.12.2022

31.12.2021 Lease liabilities

6 280

14 861

21 141

5 594 Current

14 281 Non-Current

19 876 Total

GROUP

2022

8 951

—

2021

-80 Additions and adj. to right-of-use assets

— Disposals to the right-of-use assets

PARENT

31.12.2022

31.12.2021

12 076

—

14 774

149

12 076

14 923

PARENT

31.12.2022

31.12.2021

2 813

8 711

11 524

3 921

11 673

15 594

PARENT

2022

1 277

-534

2021

-1 998

—

In 2021, Nordic Semiconductor ASA signed an office rental agreement in Oslo with
commencement date of 1 January, 2023. During 2022, the date of expire was changed
from 31 December 2022 to 1 April 2023. The total adjustment to the right-of-use asset is
a reduction of USD 0.2m.

The statement of profit or loss shows the following amounts relating to leases:

GROUP

PARENT

2022

5 974

162

6 135

621

513

644

7 914

7 766

2021 Depreciation of right-of-use assets

5 662 Properties

213 Office equipment and machinery

5 875 Total depreciation

822 Interest expense

214 Expenses relating to short-term leases

543 Expenses relating to leases of low-value assets

7 454 Total amount recognized in profit and loss

7 265 The total cash outflow for leases

2022

3 427

162

3 588

478

235

303

4 603

4 311

2021

3 524

213

3 737

733

182

285

4 937

4 938

Below are the carrying amounts of lease liabilities and movements during the period:

GROUP

Cash flow information for lease liabilities

PARENT

19 876 Net liabilities as at 1 January 2022

-6 609 Lease payments

8 951 Acquisitions and adjustments

— Disposals

629 Interest

-1 706 Other

21 141 Net liabilities as at 31 December 2022

15 594

-3 773

1 277

-534

477

-1 517

11 524

Note 22: Financial instruments
All figures in USD 1 000.

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

2022

2021

583 544

458 209 Total equity

776 241

596 817 Total assets

75%

77% Equity share

PARENT

2022

2021

561 074

440 690

757 864

584 620

74%

75%

105

GROUP

2022

175 120

5 562

280 178

50 467

2021 Amortized cost

141 748 Accounts receivable

3 606 Other current receivables

220 171 Cash at bank

— Short-term bank deposits

PARENT

GROUP

2022

175 120

12 989

270 783

50 467

2021

141 748

3 606

220 171

—

2022

2021 Fair value through profit or loss

—

520 Currency swap

520 Total financial liabilities through profit or loss

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

511 327

365 526

Total financial assets at amortized
cost

509 359

365 526

GROUP

2022

48 458

267

48 725

2021 Fair value through profit or loss

53 259 Money market fund

— Currency swap

53 259

Total financial assets at fair value
through profit or loss

PARENT

2022

48 458

267

48 725

2021

53 259

—

53 259

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

GROUP

2022

53 259

1 073

-5 607

48 725

2021

54 701 As at 1 January

337 Changes in fair value

-1 779 Currency translation differences

53 259 As at 31 December

Financial liabilities
The Group holds the following financial liabilities:

GROUP

2022

34 229

86 439

14 861

6 280

2021 Amortized cost

28 392 Accounts payable

64 215 Other current liabilities

14 281 Non-current lease liabilities

5 594 Current lease liabilities

PARENT

2022

53 259

1 073

-5 607

48 725

2021

54 701

337

-1 779

53 259

PARENT

2022

32 335

104 918

8 711

2 813

2021

27 558

76 258

11 673

3 921

141 809

112 482 Total financial liabilities at amortized cost

148 777

119 410

106

PARENT

2022

—

2021

520

PARENT

2022

520

-520

—

2021

302

218

520

GROUP

2022

520

-520

—

2021

302 As at 1 January

218 Changes in fair value

520 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 150m any time with an interest rate equal to SOFR + margin. The line of
credit expires in June 2025. As of December 31, 2022, 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 102m, accounts receivable USD
175m and operating equipment USD 25m.

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.

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.

In 2022, the Group has investments in these financial assets and liabilities using the
following methods and assumptions:

■ Term deposit is defined as cash equivalents because the asset is liquid and there is

no significant risk of a change in value as a result of an early withdrawal. The asset is
remunerated at fixed maturity date and rate, determined in advance.

■ 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.

Note 23: Financial risk management
All figures in USD 1 000.

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

Age distribution of customer receivables was:

GROUP

2022

143 750

30 241

846

283

2021 Gross total

112 399 Not due

29 327 Past due 0-30 days

68 Past due 31-120 days

190 Over 120 days

175 120

141 984 Total

PARENT

2022

143 750

30 241

846

283

2021

112 399

29 327

190

175 120

141 984

Historically there has not been any significant credit losses. 82% 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 2022 was 0m.

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.

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

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.

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

GROUP

2022

175 120

17 539

379 104

50 467

2021

141 748 Accounts receivable

11 951 Other current receivables

279 331 Cash and cash equivalents

— Short-term bank deposits

622 230

433 030 Total

PARENT

2022

175 120

21 884

2021

141 748

11 283

369 709

273 430

50 467

—

617 180

426 462

The credit risk in table above is diversified over a range of distributors, vendors,
and banks.

107

Interest rate risk
The Group’s liquidity requirements and risk assessment determine its investment
strategy and interest rate exposure.

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’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.

As of 31 December 2022, cash and cash equivalents amounted to USD 379.1m (USD
279.3m), see note 16 for details. The total balance includes short-term bank deposits at
fair value USD 50.5m and money market fund at fair value USD 48.5m.

The Group has a sustainability linked revolving credit facility, which enables it to
borrow up to USD 150 million with an interest rate equal to SOFR + margin. The line
of credit expires in June 2025, with option to extend. The security for the credit line is
provided by inventory, receivables and operating equipment.

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, 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 as of December 31,
2022 is not utilized.

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

34 229

—

136 652

21 141

192 021

—

136 652

23 056

193 937

—

136 652

6 639

177 520

—

15 795

—

622

Carrying
amount

Contractual
cash flow

Less than
one year

One to five
years

More than
five years

32 335

31 994

—

120 506

11 524

196 360

—

120 506

12 481

197 316

—

120 506

3 003

187 838

—

9 479

—

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

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 dominated functional currency for the Group is USD. Nearly all revenues and cost
of goods are in USD. However, approximately 45% of the Group’s operating expenses
(excluding depreciation and amortization) are denominated in NOK and 25% are
denominated in 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%

+/- 4 038

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

108

2022

USD

EUR

Other

Total

PARENT

USD

EUR

Other

Total

Local currency
(1,000)

776 712

130

Local currency
(1,000)

777 106

356

4 532

USD
(1,000)

776 712

776 734

USD
(1,000)

777 106

369

287

777 763

Share of total revenue in %

100.0%

—%

100.0%

Share of total revenue in %

99.9%

—%

100.0%

2022

Local currency
(1,000)

610 283

175

314

Local currency
(1,000)

610 528

538

5 163

2021

USD
(1,000)

610 283

208

610 528

USD
(1,000)

610 528

636

411

611 577

Share of total revenue in %

100.0%

—%

100.0%

Share of total revenue in %

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.

The tables below show the exposure at the end of reporting period in the most
significant currencies:
All amounts stated in USD 1000.

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.

GROUP

USD

EUR

NOK

Other

Total

2022

Accounts
receivable

175 120

—

175 120

PARENT

2022

USD

EUR

NOK

Other

Total

Accounts
receivable

175 120

—

175 120

Accounts
payables

30 640

1 955

1 106

528

34 229

Accounts
payables

30 640

499

1 106

32 335

2021

Accounts
receivable

141 971

—

141 971

2021

Accounts
receivable

141 971

—

141 971

109

99.8%

0.1%

100.0%

Accounts
payables

25 140

1 024

1 854

374

28 392

Accounts
payables

25 140

461

1 854

103

27 558

Note 24: Events after the balance sheet date
During the first quarter 2023, Nordic made a prepayment of USD 100 million related to
ongoing initiatives to strengthen supply resilience and diversification.

Below is an overview of Nordic’s financial instruments:
GROUP

2022

2021

On February 1, 2023, Nordic received regulatory approval for the acquisition of Mobile
Semiconductor. The transaction was closed in March 2023.

Financial assets

Accounts receivable

Current financial assets

Short-term receivables

Cash and cash equivalents

incl. money market fund

Financial liabilities

Accounts payable

Current financial liabilities

Other current liabilities

Book value

Fair market
value

Book value

Fair market
value

No other events have occurred since December 31, 2022 with any significant effect that
will impact the evaluation of the submitted accounts.

175 120

267

17 539

379 104

48 458

34 229

—

86 439

175 120

267

17 539

379 104

48 458

34 229

—

86 439

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

Note 25: Related party transactions
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.

PARENT

2022

2021

Book value

Fair market
value

Book value

Fair market
value

Financial assets

Accounts receivable

Current financial assets

Short-term receivables

Cash and cash equivalents

incl. money market fund

Financial liabilities

Accounts payable

Current financial liabilities

Other current liabilities

175 120

267

21 884

369 708

48 458

32 335

—

104 918

175 120

267

21 884

369 708

48 458

32 335

—

104 918

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

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

110

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 those defined or specified in
the applicable financial reporting framework. The Group has identified the following APMs used in
reporting (amounts in USD million).

Gross margin is presented as it is the main financial KPI to measure the Group’s
operations performance.

■ Gross Margin. Gross Profit divided by Total Revenue.

GROUP

EBITDA

Total revenue

EBITDA Margin

2022

205.7

776.7

26.5%

2021

124.7

610.5

20.4%

GROUP

Gross profit

Total revenue

Gross margin

2022

436.8

776.7

56.2%

2021

326.6

610.5

53.5%

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

■ EBITDA is Earnings before interest, taxes, depreciation and amortization.

GROUP

Operating profit

Depreciation

EBITDA

2022

161.6

44.1

205.7

2021

86.9

37.8

124.7

■ EBITDA margin. EBITDA divided by Total Revenue.

Total Operating Expenses and Cash Operating Expenses. Nordic management believes
that this measurement best captures the difference in expenses impacting the cost
compared to cash flow of the Group.

■ Total Operating Expenses. Sum of payroll expenses, other operating expenses,

depreciation and amortization.

■ 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.

GROUP

Payroll expenses

Other operating expenses

Depreciation

Total operating expenses

Depreciation

Option expense

Capitalized expenses

Cash operating expenses

2022

161.4

69.7

44.1

275.2

-44.1

-7.8

6.5

229.7

2021

149.8

52.1

37.8

239.7

-37.8

-7.6

5.6

200.1

111

01020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statement Audit opinion letterAppendicesIncome statementsStatement of Financial PositionCash FlowDisclosuresAlternate Performance MeasuresOrder backlog. Customer orders placed by the end of the reporting period for delivery
in later quarters. In a normal supply situation, where supplies are not constrained,
order backlog is a leading indicator of revenue in the coming 2 quarters. Since early
2021 we are in a supply constrained situation, therefore order backlog is well beyond
2 quarters, and hence order backlog is not an appropriate guide for revenue but it is
retained as an APM for consistency.

Adjusted EBITDA and Adjusted EBITDA margin. This APM shows Nordic's profitability
excluding products in an investment phase with limited revenue

■ EBITDA excluding cellular IoT, divided by Total revenue excluding cellular IoT revenue.

GROUP

Reported EBITDA

Long range (cellular IoT) EBITDA loss

Wi-Fi expense

Adjusted EBITDA

Total revenue (excluding cellular IoT revenue)

Adjusted EBITDA margin

2022

205.7

41.4

15.1

262.2

751.4

34.9%

2021

124.7

38.5

12.3

175.6

593.5

29.6%

LTM opex to LTM 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.

■ Last twelve months operating expenses excluding depreciation divided by last twelve

months revenue.

GROUP

Total operating expenses

Depreciation

Operating expenses excluding depreciation and amortization

Total revenue

LTM opex / LTM revenue

2022

275.2

-44.1

231.1

776.7

29.8%

2021

239.7

-37.8

201.9

610.5

33.1%

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.

■ Net working capital divided by last twelve months revenue.

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

2022

674.1

-379.1

-177.2

0.0

6.3

43.8

167.9

776.7

21.6%

2021

488.0

-279.3

-123.7

0.5

5.6

17.4

108.4

610.5

17.8%

112

Responsibility
Statement

113113

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607Responsibility Statement

The Chief Executive Officer and the Board of Directors
confirm, to the best of our knowledge, that the financial
statements for 2022 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, 2023

Jan Frykhammar

Board member

Birger Steen

Chair

Anita Huun

Board member

Inger Berg Ørstavik

Board member

Svenn-Tore Larsen

Chief Executive Officer

Endre Holen

Board member

Øyvind Birkenes

Board member

Jon Helge Nistad

Board member, employee

Annastiina Hintsa

Board member

Gro Fykse

Anja Dekens

Morten Dammen

Board member, employee

114114

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices0102030405060706

Audit opinion letter

115115

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607To the General Meeting of Nordic Semiconductor ASA

Key Audit Matters

Independent Auditor’s Report

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Nordic Semiconductor ASA, which comprise:

•

the financial statements of the parent company Nordic Semiconductor ASA (the Company),
which comprise the statement of financial position as at 31 December 2022, the income
statement, statement of changes in equity and statement of cash flows for the year then
ended, and notes to the financial statements, including a summary of significant accounting
policies, and
the consolidated financial statements of Nordic Semiconductor ASA and its subsidiaries (the
Group), which comprise the statement of financial position as at 31 December 2022, and the
income statement, consolidated statement of changes in equity and statement of cash flows
for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies.

In our opinion

•
•

•

the financial statements comply with applicable statutory requirements,
the financial statements give a true and fair view of the financial position of the Company as at
31 December 2022, and its financial performance and its cash flows for the year then ended in
accordance with International Financial Reporting Standards as adopted by the EU, and
the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2022, and its financial performance and its cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the
EU.

Our opinion is consistent with our additional report to the Audit Committee.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and the
Group as required by relevant laws and regulations in Norway and the International Ethics Standards
Board for Accountants’ International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.

To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.

We have been the auditor of the Company for 4 years from the election by the general meeting of the
shareholders on 24 April 2019 for the accounting year 2019.

116116

PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap

Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.

The Group’s activities are largely unchanged compared to the prior year, and there have not been any
changes to laws and regulations, transactions or events which could have a significant impact on the
financial statements as a whole. Revenue Recognition – Ship and Debit Provision carries the same
characteristics and risks this year, and consequently continues to be in our focus for the 2022 audit.

Key Audit Matters

How our audit addressed the Key Audit Matter

Revenue Recognition – Ship and Debit
Provision

Revenue from contracts with customers is
recognized when control of the goods is
transferred to the customer (distributor).
The time of delivery, and the time where
control of goods is transferred, is usually
the time when the goods are transferred to
the transport carrier.

When a distributor sells components to
specified customer accounts, the distributor
receives an additional discount after the
sale is made, commonly known as a “Ship
and Debit” discount. The Group uses the
expected value method for calculating the
discount. The calculation of discounts,
through the use of the expected value
method, takes into account historical
discounts to each distributor, the
distributors’ inventory level at the balance
sheet date and the expected sales mix.

An estimated Ship and debit discount is
recognised in the financial statements,
reducing revenue and increasing liabilities
with USD 30 694 thousand as at 31
December 2022. Due to the amounts
involved and the application of management
judgement, we have determined ship and
debit provision to be a key audit matter.

Refer to note 2.2, note 2.4 and note 3.3
where management explains the Group’s
revenue recognition policy, including
significant judgements, estimates and
assumptions, and the recorded ship and
debit provision.

We assessed the Group’s revenue recognition
policy, including revenue recognition for ship and
debit sales, against IFRS requirements based on
underlying agreements on distributor Ship and Debit
discounts. Furthermore, we obtained an
understanding of management’s process for
estimating the ship and debit provision and reviewed
a sample of distributor sales agreements.

We performed a retrospective review of the outcome
of management’s prior year estimates by comparing
actual discounts in 2022 to the prior year ship and
debit provision. We also performed a retrospective
review of the monthly ship and debit provisions
throughout 2022 and compared the monthly
discount provision levels to actual ship and debit
discount levels. We compared the estimated ship
and debit provision as at the balance sheet date to
historical discount levels, and challenged
management, through discussions, on the estimated
discounts per distributor. We tested the
mathematical accuracy of the calculation of the
provision.

We also obtained the actual ship and debit claims in
January 2023 and compared the ship and debit level
to the ship and debit provision at the balance sheet
date.

Based on our audit procedures we found
management’s assumptions to be reasonable.

We also assessed the information in note 2.2, note
2.4 and note 3.3 and found it appropriate.

2 / 5

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607

Other Information

The Board of Directors and the Managing Director (management) are responsible for the information
in the Board of Directors’ report and the other information accompanying the financial statements. The
other information comprises information in the annual report, but does not include the financial
statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the information in the Board of Directors’ report nor the other information accompanying the financial
statements.

In connection with our audit of the financial statements, our responsibility is to read the Board of
Directors’ report and the other information accompanying the financial statements. The purpose is to
consider if there is material inconsistency between the Board of Directors’ report and the other
information accompanying the financial statements and the financial statements or our knowledge
obtained in the audit, or whether the Board of Directors’ report and the other information
accompanying the financial statements otherwise appear to be materially misstated. We are required
to report if there is a material misstatement in the Board of Directors’ report or the other information
accompanying the financial statements. We have nothing to report in this regard.

Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report

•
•

is consistent with the financial statements and
contains the information required by applicable statutory requirements.

Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate
Governance and Corporate Social Responsibility.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with International Financial Reporting Standards as adopted by the EU, and for such
internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s and
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:

•

identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The

risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

• obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's and the Group's internal control.

• evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by management.

•

conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company's and the
Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company and the Group to cease to
continue as a going concern.

• evaluate the overall presentation, structure and content of the financial statements, including

the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves a true and fair view.

• obtain sufficient appropriate audit evidence regarding the financial information of the entities or

business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.

We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.

We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.

117117

3 / 5

4 / 5

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607

Revisjonsberetning

Signers:

Name

Nilsen, Eivind

Method

BANKID

Date

2023-03-17 09:40

Report on Other Legal and Regulatory Requirements

Report on Compliance with Requirement on European Single Electronic Format (ESEF)

Opinion
As part of the audit of the financial statements of Nordic Semiconductor ASA, we have performed an
assurance engagement to obtain reasonable assurance about whether the financial statements
included in the annual report, with the file name nordicsemi-2022-12-31-en.zip, have been prepared,
in all material respects, in compliance with the requirements of the Commission Delegated Regulation
(EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant
to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the
preparation of the annual report in XHTML format, and iXBRL tagging of the consolidated financial
statements.

In our opinion, the financial statements, included in the annual report, have been prepared, in all
material respects, in compliance with the ESEF regulation.

Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF
regulation. This responsibility comprises an adequate process and such internal control as
management determines is necessary.

Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger

Oslo, 17 March 2023
PricewaterhouseCoopers AS

Eivind Nilsen
State Authorised Public Accountant
(This document is signed electronically)

118118

This document package contains:
- Closing page (this page)
- The original document(s)
- The electronic signatures. These are not visible in the
document, but are electronically integrated.

This file is sealed with a digital signature.
The seal is a guarantee for the authenticity
of the document.

5 / 5

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607

Appendices

119119

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607TCFD Index

a) Describe the board's
oversight of climate-related
risks and opportunities

The Board of directors shall ensure that considerations of sustainability, hereunder climate & environmental matters, are
closely linked with the company’s activities and value creation. The overall responsibility for oversight lies with the Board itself.
In addition, the Nordic Board of Directors established a Sustainability Committee in 2022, assisting the Board in overseeing
Nordic’s overall integration of sustainability in the value creation of the Group as well as the defined ESG criteria that measure
our sustainable performance. The committee handles ESG issues, focusing on climate and environmental topics and how
Nordic products and services are used in solutions for climate change and other sustainability-related applications. The
committee reviews climate-related initiatives and Climate-related KPIs approval (i.e. both planned and achieved GHG emission
reduction targets).

Governance

b) Describe management's
role in assessing and
managing climate-related
risks and opportunities

On a Nordic management level, the ESG Committee supports our CEO in developing and maintaining the Group's sustainability
framework and driving a holistic and aligned approach to sustainability across Nordic. The ESG Committee is chaired by the
SVP Legal & Compliance. It consists of EMT members with dedicated functional responsibilities within the ESG sphere: SVP QA,
EVP Supply Chain, EVP People & Communication, EVP Product Management, EVP Finance, and SVP Investor Relations. The
functional responsibilities follow the principle of integrating sustainability across business functions, and subject matter expertise
to ensure proximity to the right competencies, key stakeholders, and relevant business processes.

Governance chapter,
and its sub-
chapters: Governing
Structure, Managing
Sustainability

Nordic 2022 CDP
Climate Change
report
C1.1b

Governance chapter,
and its sub-
chapters: Governing
Structure, Managing
Sustainability

Nordic 2022 CDP
Climate Change
report
C1.2, C1.2a

120120

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607a) Describe the
climate-related risks
and opportunities the
organization has identified
over the short, medium, and
long term

b) Describe the impact
of climate-related risks
and opportunities on the
organization’s businesses,
strategy, and financial
planning

Strategy

c) Describe the resilience of
the organization’s strategy,
taking into consideration
different climate-related
scenarios, including a 2°C or
lower scenario.

Short-term: 0 – 3 years
Medium-term: 3 – 6 years
Long-term: 6 – 10 years
Timespan categorization is made according to our business sensitivity to climate change, the need for a shift in strategy, and
the pace of arising climate change scenarios.

Climate-related risks and opportunities have influenced Nordic Semiconductor’s strategy in four areas:

•

Influence on products & services: Initiating a renewable energy program and financial planning to cover
manufacturing GHG emissions by purchasing I-RECs. This responds to the market's preference for low-emissions
production and risk. Further, our climate strategy includes establishing Science Based GHG emission targets in
collaboration and support from the Science Based Target Initiative (SBTi).
Influence on Supply chain and/or value chain: Climate change factors present an important risk identified by the
sustainability/environment discipline. Climate-related risks with considerable probability-impact weight have been
included in enterprise risk assessment. Such risks (such as acute/chronic physical events, market behavior, and
transitional risks) have driven our strategy and approaches to these risks/opportunities. As a fabless company with
subcontractors located in Asia, our key measure is to second-source vital components in order to mitigate acute
physical risks.
Influence on R&D investments: As an IoT technology enabler and supporter, Nordic is committed to promoting
better environmental and climate-friendly performance in our markets. In response to the recent push to take action
on climate change and risk assessment outcomes, we have initiated a sustainability program to offer sustainable
products with minimal negative environmental and climate impact. We have developed innovative products that
support this mission, such as cloud services that enable remote industrial control, reducing the need for travel to
conduct on-site tests. Additionally, we offer evaluation kits that support IoT products with a positive climate-related
impact.
Influence on Operations: Nordic has conducted a risk assessment of our different business aspects, which has
resulted in identifying potential actions related to climate change in our operations. As our operations are limited to
R&D, sales, and administration within our offices, we have developed a strategy to eliminate 100% of emissions from
our electricity consumption by 2025. To achieve this goal, we initiated a renewable energy program in 2020.

Nordic Semiconductor established a GHG emission program in 2020 for all scopes 1, 2, and 3. A key KPI for 2023 is to validate
net-zero GHG emission targets with the Science Based Targets initiative (SBTi) to ensure a resilient transition plan aligned with
the 1.5-degree Paris Agreement objective. Nordic's GHG emission net-zero targets for Scopes 1 and 2 currently exceed SBTi
criteria.

Nordic 2022 CDP
Climate Change
report
C2.1, C2.2b, C2.2c,
C2.3
C2.3a, C2.4, C2.4a

TCFD reporting
chapter

Nordic 2022 CDP
Climate Change
report
C2.3a, C2.4a, C2.5,
C2.6,
C3.1

TCFD reporting
chapter

Nordic 2022 CDP
Climate Change
report
C3.1a, C3.1d

121121

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607a) Describe the
organization’s processes for
identifying and assessing
climate-related risks

Climate Change related risks (and opportunities) are identified and evaluated (in categories: current/emerging regulations,
technology, legal, market, reputation, acute physical, chronic physical) by entering the risk assessment process. For group
management risk assessments, a non-linear scale is used to deem financial and strategic impacts ranging from 1 (Insignificant)
to 5 (Catastrophic). This scale defines criteria and definitions for each impact rating within different impact categories: Financial,
Reputational, Climate and Environment, and People or Property.

Nordic 2022 CDP
Climate Change
report
C2.2b, C2.2c

b) Describe the
organization’s processes
for managing climate-
related risks

Risk
Management

Related risks to climate change have been identified in the TCFD reporting chapter. To exemplify the risk management process,
acute physical risks, such as droughts, typhoons, or storms, specifically apply to our critical manufacturing suppliers in Southeast
Asia. Tropical cyclones (i.e., hurricanes, typhoons, and resulting floods) are becoming increasingly frequent. A potential disaster
could impact our wafer supplier, TSMC, in Taiwan, leading to reduced production capacity. It is estimated that an incident
causing one month's downtime/delay in wafer production at TSMC could cause a significant reduction in annual revenue, which
corresponds to a Moderate impact (3). The probability of such an event is considered “as likely as not” (3) in the short-term.
Long-term risk has increased based on changing patterns and the frequency of storms in that region. The combination (3x3=9)
of the probability and impact suggests a risk mitigation reaction strategy. In this case, Nordic Semiconductor has secured buffer
stock to reduce the potential impact of such events. We also communicate closely with our suppliers to ensure their business
continuity plans are sufficient for such events. Furthermore, a mix of working with our suppliers’ contingency plans, second-
sourcing, and insurance will reduce risk to an acceptable level.

TCFD reporting
chapter

Nordic 2022 CDP
Climate Change
report
C2.2b, C2.2d

c) Describe how processes
for identifying, assessing,
and managing climate-
related risks are integrated
into the organization’s
overall risk management

The identification, assessment and management of climate related risks is an integrated part of the company’s Corporate Risk
Management framework with the aim to proactively identify and manage risks that may impact our ability to deliver on our
strategic objectives. The outcome of our climate-related risk assessment, including probability, and impact forms an integral part
of the company’s corporate risk report. The Board of Directors oversees risk management through bi-annual reviews, as well as
on an ongoing basis in relation to specific projects or other matters of regular business. The Executive Management Team and
the defined risk functions are accountable for implementing the necessary risk-mitigating measures in the relevant parts of the
organization.

Risk management
section

Nordic 2022 CDP
Climate Change
report
C2.2

122122

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607a) Disclose the metrics
used by the organization to
assess climate related risks
and opportunities in line
with its strategy and risk
management process

b) Disclose Scope 1, Scope
2, and, if appropriate,
Scope 3 greenhouse gas
(GHG) emissions, and the
related risks

c) Describe the targets
used by the organization
to manage climate-related
risks and opportunities and
performance against targets

Metrics and
Targets

Nordic reports climate-related metrics in our annual reporting. See the Environment chapter for GHG emission scope 1, 2, and
3 data.

Environment chapter

Refer to the Environment chapter for disclosure on emissions.

Environment chapter

ESG-related KPIs, with the potential for incentives, are set for the Executive Management Team (EMT) members as well as
specific positions reporting to EMT members of Nordic Semiconductor ASA. Specific GHG emission targets, and related KPIs are
listed and described below.

Environment chapter

Targets for 2022:

•
•

Scope 2 emission reduction by 50% vs 2021 - achieved (54.7 % reduction)
Scope 3 emission reduction by 20% vs 2021 - achieved (21.5 % reduction)

Annual KPIs (Targets for 2023):

•
•
•
•

Reduce GHG emission generated from air travel by 50% compared to 2019
Reduce Scope 2 GHG emission by 50% compared to 2022.
Validate and commit to new climate targets with the science-based target initiative (SBTi) within 2023
Offset Scope 3 GHG emission intensity to ensure 40% reduction of emission/revenue vs 2020.

123123

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607GRI Index
GRI Standard

General disclosures

GRI 2: General
Disclosures 2021

Standard disclosure

Nordic response

2-1 Organizational details

2-1 A-C: See Disclosures: Note 1.1 Corporate Information for legal name, nature of ownership and legal form, and
headquarter address.
2-1 B: See Report from the Board of Directors for a list of countries of operation.

2-2 Entities included in the organization’s
sustainability reporting

2-2 A: See Disclosures: Note 13 Subsidiaries.
2-2 B: All subsidiaries shall be included in the sustainability reporting where the same data collection and assimilation
methodologies are applied unless specified otherwise.
2-2 C: All subsidiaries are included in the sustainability reporting, as stated above, except for offices with fewer than 10
employees, which are excluded from Scope 2 GHG emission reporting by default.

2-3 Reporting period, frequency and
contact point

2-3 A-B: See Sustainability review
2-3 C: To be published on the 20th of March, 2023.
2-3 D: ESG Reporting Specialist: Martin.Bjerkmo@nordicsemi.no

2-4 Restatements of information

2-4 A: No restatements have been made in the reporting period.

2-5 External assurance

2-5 A: At the time of reporting, Nordic Semiconductor does not have a policy in place which covers external assurance of
sustainability reporting.
2-5 B: At the time of reporting, Nordic Semiconductor's sustainability reporting has not been externally assured.

2-6 Activities, value chain and other
business relationships

2-6 A: See Strategy and ambitions
2-6 B-C: See Responsible supply chain
2-6 D: No significant changes compared to previous reporting period

2-7 Employees

2-7 A: See 2-7 A: Diversity, equity & inclusion, Disclosures: Note 9: Payroll expenses
2-7 B-E: See the Social chapter
Omission: Nordic does not currently have complete data available for for all required indicators.

2-8 Workers who are not employees

2-8 A: i. Workers who are not classified as employees are mainly contractors. Contractors:
By year-end 2022, Nordic had 70 contractors, of whom 43 joined during 2022. The gender split was 86% male and 14%
female, which is consistent with the overall gender split within the Group. Nordic also hires workers through Professional
Employer Organizations (PEOs) in countries where the Group does not have legal entities. This means the PEO is the
employer of record, performing employee administration tasks such as payroll and benefits administration, on behalf of
Nordic. By year-end 2022, Nordic had 18 workers through PEOs, 10 male (56%) and 8 female (44%).

ii. Workers who are not classified as employees are typically engaged by Nordic to provide required expertise and capacity in
certain technologies and/or defined projects.
2-8 B-C: See the Social chapter

124124

2-9 Governance structure
and composition

2-9 A: See the Governance chapter
2-9 B: See Managing sustainability in Nordic
2-9 C: See the Governance chapter, 2-9 C: viii. Stakeholder representation: the Board of Directors consist of 4 employee
elected representatives while shareholders elect 7 representatives.

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices010203040506072-10 Nomination and selection of the
highest governance body

2-10 A-B: See the Governance chapter

2-11 Chair of the highest
governance body

2-11 A-B: The chairman of Nordic is not an executive officer.
See Board of Directors' report in relation to the Norwegian Code of Practice for Corporate governance

2-12 Role of the highest governance
body in overseeing the management of
impacts

2-12 A-B: See the Governance chapter

2-13 Delegation of responsibility for
managing impacts

2-13 A-B: See the Governance chapter

2-14 Role of the highest governance
body in sustainability reporting

2-14 A-B: The annual report 2022, including the sustainability reporting, has been reviewed and approved by the Board
of Directors.

2-15 Conflicts of interest

2-15 A: See Board of Directors' report in relation to the Norwegian Code of Practice for Corporate governance. The Rules of
Procedure of the Board of Directors stipulates requirements related to disclosing and managing potential conflict of interests,
as well as for primary insiders.

2-16 Communication of critical concerns

2-16 A: CEO reports about critical concerns to the Board of Directors on a running basis when relevant. Compliance Officer
reports on status on compliance matters, including reported matters and critical concerns on a regular basis to the Audit
Committee.
2-16 B: See Governance chapter, Governance performance overview for numbers of reports made through whistleblower
channel and how they have been investigated and resolved.

2-17 Collective knowledge of the highest
governance body

2-17 A: See Managing sustainability in Nordic.
The various committees of Nordic have regular knowledge exchanges on various sustainability topics and are thus kept
abreast of the latest matters regarding Nordic's sustainability initiatives and relevant projects. Further, the committees are
regularly updated on the latest changes concerning sustainability reporting, regulations, and requirements.

2-18 Evaluation of the performance of the
highest governance body

See the Governance chapter. The Rules of Procedure of the Board of Directors stipulates that the Board, and each of its
committees conduct an annual self-performance evaluation to determine whether the Board and each of its committees are
functioning effectively in overseeing the management of the organization's impact.

2-19 Remuneration policies

See Board of Directors' report in relation to the Norwegian Code of Practice for Corporate governance, Disclosure: Note 10.1:
Management remuneration, Remuneration guidelines and policy

2-20 Process to determine remuneration

See Renumeration Report. Key renumeration decisions are made by the Board of Directors. The Board People &
Compensation Committee (PCC) operates as a preparatory committee for the Board in matters concerning remuneration. The
PCC reviews, analyzes, discusses, evaluates and recommends remuneration principles and decisions to the Board. The Board
of Directors provides a Renumeration Report as well as a Renumeration Policy and Guideline for the Board of Directors and
Senior Executive Management to the Annual General Meeting for advisory votes. The votes of the annual general meeting
are made available as part of the minutes from the annual general meeting on the Company's website.

125125

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices010203040506072-21 Annual total compensation ratio

2-21 A-B: See Social performance overview.
2-21 C: The data has been compiled using total compensation figures for all employees based in Norway, and total
compensation for the highest-paid individual (the CEO). which represents a total annual compensation ratio of 10.23, with
an annual percentage increase of 11%. The process to obtain data for calculating the median employees for all countries of
operations will commence, and be included in reporting once obtainable.

2-22 Statement on sustainable
development strategy

2-23 Policy commitments

See Message from the CEO, Sustainability review, Managing sustainability in Nordic, Responsible Supply chain

2-23 A: Nordic Semiconductor has committed to conducting business in a way that respects and supports internationally
proclaimed human and labor rights, as defined by the International Bill of Rights and the International Labor Organization
(ILO) Fundamental Principles and Rights at Work, by preventing and mitigating negative impacts and by driving continuous
improvement. Nordic has established a human rights due diligence framework based on OECD´s Guidelines for Multinational
Enterprises to operationalize our commitment to safeguarding human and labor rights. Further, Nordic is committed to the ten
principles of the UN Global Compact. For further information, see Managing sustainability in Nordic.
2-23 B: See Responsible supply chain, Human rights and labor rights
2-23 C-F: See Nordic's Policies and Statements and the description in each respective policy

2-24 Embedding policy commitments

See Nordic's public policies and statements on the Nordic website and the compliance & integrity chapter for
general information.

2-25 Processes to remediate
negative impacts

2-25 A-E: Nordic engages in stakeholder dialogue to identify negative impacts from its activities and business relationships
and to identify necessary remediating actions. Nordic has established a human rights due diligence framework to remediate
negative impacts concerning human and labor rights. See response to 2-23 A for further information. In addition, Nordic has
established a whistleblowing channel where any suspected incidents of misconduct can be reported. For details, see the
responsible supply chain and the compliance & integrity chapter.

2-26 Mechanisms for seeking advice and
raising concerns

2-26 A: Nordic has established a whistleblowing channel where any suspected incidents of misconduct can be reported. For
details, see the responsible supply chain and the compliance & integrity chapter.

2-27 Compliance with laws and
regulations

2-27 A: The company is not aware of any significant instances of non-compliance with laws and regulations during the
reporting period. Hence, no fines nor non-monetary sanctions incurred during the reporting period.
2-27 B: Not applicable.

2-28 Membership associations

Member of Bluetooth SIG, Connectivity Standard Alliance

126126

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices010203040506072-29 Approach to
stakeholder engagement

See overview table below with examples from stakeholder dialogue:

2-30 Collective bargaining agreements

See Diversity, equity & inclusion

In addition, see the Environment, Social, and Governance chapters

127127

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607
Material topics

GRI 3: Material Topics 2021

3-1 Process to determine material topics

3-1 A: See the Sustainability review and the illustration below:

3-1 B: Identifying and selecting material topics is a cross-organizational effort in which various subject matter experts (SME)
participate. This includes SMEs from the quality, human resources, legal and compliance, and various other units and
functions that have been part of the process. In addition, external stakeholders influence the process, and a list of such
stakeholders can be referenced above in 2-29 Approach to stakeholder engagement.

3-2 List of material topics

3-2 A: See the list of material topics below:

128128

3-2 B: For the 2022 review of material topics, 3 topics where added, including; Employee engagement, Product energy
efficiency, and Product security. In addition, the material topic Diversity & inclusion was expanded to include Diversity, equity,
& inclusion. The material topic of Privacy was amended to Data privacy.

3-3 Management of material topics

Each respective sub-chapter of the Environment, Social, and Governance chapters corresponds to each identified material
topic, which includes, where relevant, a description of the topic, its impacts, relevant policies, actions taken, and associated
metrics and targets.

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607

Anti-corruption & Integrity

GRI 205: Anti-corruption 2016

205-1 Operations assessed for risks
related to corruption

The assessment of the potential of risks and relevant mitigation activities related to corruption or bribery is part of the
Company's Corporate Risk Management framework, and is as such performed on a semi-annual basis.

205-2 Communication and training about
anti-corruption policies and procedures

For general information regarding anti-corruption and integrity, see the Compliance & Integrity chapter and the publicly
available information regarding Nordic's Anti-Corruption Program. Our anti-corruption policy is communicated to new
employees as part of onboarding, and relevant guidance is part of our Employee Handbook. We aim to provide relevant and
targeted training to enable our employees to make sound ethical decisions. An introduction course to Compliance & Integrity
is provided to all new employees. Nordic require all Tier 1 suppliers to commit to the Code of Conduct of the Responsible
Business Alliance.

205-3 Confirmed incidents of corruption
and actions taken

The company is not aware of any confirmed incidents of corruption involving the company, including its employees during the
reporting period. No public legal causes regarding corruption has been brought against the organization during the reporting
period.

Data Privacy / Information security

GRI 418: Customer Privacy
2016

418-1 Substantiated complaints
concerning breaches of customer privacy
and losses of customer data

For general information regarding data privacy and personal data protection, see the Compliance & Integrity chapter and
the publicly available information regarding Nordic's Product security vulnerabilities and management process for product
vulnerabilities which may be relevant to data privacy matters.
418-1 A: See the Governance performance overview.
418-1 B-C: No such incidents occurred during the reporting period.

Diversity, equity & inclusion

GRI 405: Diversity and Equal
Opportunity 2016

405-1 Diversity of governance bodies and
employees

See the Social chapter

405-2 Ratio of basic salary and
remuneration of women to men

See the Social chapter

129129

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607GHG emission/climate change

GRI 305: Emissions 2016

305-1 Direct (Scope 1) GHG emissions

305-1-305-5: See the Environment chapter

305-2 Energy indirect (Scope 2) GHG
emissions

305-3 Other indirect (Scope 3) GHG
emissions

305-4 GHG emissions intensity

305-5 Reduction of GHG emissions

305-6 Emissions of ozone-depleting
substances (ODS)

305-7 Nitrogen oxides (NOx), sulfur
oxides (SOx), and other significant air
emissions

Omission: During the reporting period, Nordic did not directly contribute to any emissions of ODS. Further Nordic does not
currently have complete data available for ODS emissions stemming from its manufacturing suppliers, where CFC and HCFC
emissions, etc, are relevant.

See the Environment chapter for a general description of air pollution and its relevancy and direct impact on Nordic's
operations.
Omission: During the reporting period, Nordic did not directly contribute to any air emissions. Further Nordic does not
currently have complete data available for air emissions stemming from its manufacturing suppliers, where NOx and SOx
emissions, etc, are relevant.

130130

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607Health & Safety / Hazardous substances

GRI 403: Occupational
Health and Safety 2018

403-1 Occupational health and safety
management system

403-2 Hazard identification, risk
assessment, and incident investigation

403-1 A: Nordic's occupational health & management system is based on the ISO Standard ISO 45001 Occupational Health
and Safety Management Systems and the Norwegian Working Environment Act (the scope of the certification itself is limited
to activities in Norway). The ISO 45001 certification scope covers also Finland activities.
403-1 B: Nordic has implemented a management system to improve employees' working conditions continuously. These
activities include risk assessments, employee satisfaction surveys, improvement programs, training, and occupational
health services. For our highest risk elements, adequate emergency plans are defined and rehearsed. For further general
information, see the Health & Safety chapter

403-2 A: The working environment committee (AMU) is responsible for providing guidelines on OHS and has implemented
an OHS policy and principles. Further, local OHS committees have been established for specific offices where legally
required. The AMU consist of employees trained in health and safety. The AMU covers other offices that do not have such
local OHS committees. One of the key responsibilities of the OHS committees is to Identify potential work-related risks
concerning changes in the organization or the workplace and initiate measures to reduce risks when relevant. Further, it shall
communicate and cooperate with local employees/employee representatives to ensure that workers' views and perspectives
are given due consideration in managing changes, decisions, and risks related to the health and safety of the company’s
employees.
403-2 B: Nordic employees are encouraged to report such incidents by utilizing the OHS non-conformity reporting channel.
The non-conformity reporting system shall ensure that any issue, whether a non-conformity, incident, or near-incident, is
analyzed and dealt with, including those related to OHS work. Proposals for changes and improvements pertaining to
occupational health and safety for people working under company control are registered in the non-conformity system under
the category OHS. Safety representatives are responsible for registering and following up on OHS-related nonconformities
and proposed improvements. Where applicable, local OHS Committees assess and follow up the initiatives.
The OHS non-conformity reporting system enables employees to i. Address reported incidents or near-incidents, and ii.
Anticipate potential health and safety hazards through inspections and continuous improvement. A report can be registered
using one of the following approaches:
1. Reporting directly to your nearest leader (who will address this with the OHS organization).
2. Reporting to your safety representatives (site specific).
3. Reporting to the HR department.
4. Reporting directly in the Non-conformity register.
Incidents are recorded and handled according to Nordic's internal procedure "7.3 Continuous improvement and Non-
conformity handling guideline". Incidents shall also be reported to local authorities according to applicable regulations. Other
stakeholders, such as building owners and company management, shall be involved as relevant or explicitly described in
OHS non-conformity reporting. Further, The AMU shall at annual basis perform hazard identification and risk assessment
to determine the need for controls and improvement actions. Every third year, a more thorough hazard evaluation shall
be performed. The risk assessment shall consider all parts of organization’s activities. Risk assessments are archived and
available for all employees.
403-2 C: All employees are protected from any reprisal when reporting or raising issues related to OHS. Stop work authority
can be used in case of danger to the employee or people in the immediate vicinity.
403-2 D: See 403-2 B. Further, issues raised or reported will be investigated by the appropriate OHS committee, or if
applicable, the AMU.

For further information on these matters See the Health & Safety chapter, Human and labor rights chapter, Responsible
supply chain, Environment chapter

In addition, see the publicly available information on Nordic's environmental and related hazardous substance management
practices on Nordic's website: Environmental Management

131131

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607403-3 Occupational health services

403-4 Worker participation, consultation,
and communication on occupational
health and safety

The Management Team is responsible for the organization’s working environment and shall ensure a systematic improvement
to provide safe employment and meaningful work for the individual employee. The Management team is responsible for the
organization’s OHS policy and operational targets. The policy shall enable:
That employees have a protective working environment
Safe employment and meaningful work for the individual employee
Consultation and participation of workers and worker's representatives
That our suppliers live up to Nordic Semiconductor’s OHS standards
Compliance with legal requirements, as well as internal policies and guidelines
Continuous improvements concerning occupational health and safety for all Nordic employees

•
•
•
•
•
•

In the event that employees wish to remain anonymous, they can use H&S services through a third party whose contact
details are posted on the Nordic's intranet. In the event of an internal investigation, employee details are confidential, and
only the designated team has access to such information. Retaliation against any employee who has reported misconduct is
prohibited, and there shall be no unfavorable treatment to any whistleblower.

403-4 A: The OHS policy commits to consultations with Nordic employees and representatives with regard to ensuring an
inclusive and effective OHS approach across the organization and its business areas. These consultations take place at
employee level (Safety inspections and non-compliance reports),
For instance, worker's representatives at inspections, risk assessments and changes in the organization, management at
inspections and policies development, and OHS Committees on all topics discussed. All assessments, reports, and committee
meeting minutes are archived and available to all employees.
403-4 B: See response to 403-2 A.

403-5 Worker training on occupational
health and safety

403-5 A: Each new employee undergoes initial training, during which the primary health and safety risks present in the
various work areas are discussed. Furthermore, depending on the role, employees are given additional training on hazards
in their area of work. In addition, employee representatives (PSR) and AMU members are sent to additional advanced health
and safety courses in order to raise their awareness. Training is conducted in local languages and in English.

403-6 Promotion of worker health

403-6 A: The health insurance plan comprises several non-occupational medical and healthcare services. For instance,
treatment guarantees to ensure quicker access to medical services in private hospitals or clinics with health specialists. The
insurance also includes free access to online GPs (experienced practitioners) for all employees and their children.
Additionally, employees have access to online mental healthcare consultations with psychologists, offering 5 video calls for 25
minutes free of charge per year and digital self-help programs such as articles, exercises, and techniques to help cope with
challenges.
403-6 B: Nordic has implemented a new global sponsorship program that allows employees to dedicate 60 minutes weekly
to physical activity during work hours. This initiative is regularly promoted by managers and EMT members, who provide
guidance on how to actively spend time during work hours. Furthermore, many locations now offer free passes for sports
activities, such as gym memberships, allowing employees to remain active outside work hours. As an example to further
encourage and promote employee health and wellbeing, Nordic Semiconductor organized a challenge/competition using the
Strava platform, which was well-received and saw over 3,400 hours of employee participation
For further information and examples, see the Health & Safety chapter.

403-7 Prevention and mitigation of
occupational health and safety impacts
directly linked by business relationships

The AMU shall perform hazard identification and risk assessment annually to determine the need for controls and
improvement actions. Every third year, a more thorough hazard evaluation shall be performed. The risk assessment shall
consider all parts of the organization’s activities. Such assessments are meant to mitigate and safeguard employees. Risk
assessments are archived and available for all employees.

132132

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607403-8 Workers covered by an
occupational health and safety
management system

403-8 A: See response to 403-1. In addition, all contractors, consultants, and other non-full-time employees that work for
Nordic are covered by the OHS standards of the company. However, as a fabless semiconductor company that works with
various manufacturing partners and suppliers, Nordic does not conduct direct audits for contractors, consultants, or other
personnel that are not full time employees and work outside of Nordic's offices. Nordic is, however a member of RBA, which
conducts on-site audits for Nordic's suppliers as described in the responsible supply chain chapter.
i. the number of all employees and workers who are not employees but whose work and/or workplace is controlled by the
organization, who are covered by such a system; 152 out of 1435, or 10.6%.
ii-iii: Omission: As a fabless company, we are not conducting any external audits. Such audits are conducted by the RBA. In
addition, we are performing safety inspections and audits that focus not on workers in particular, but rather on the various
work processes, in order to enable an inclusive approach.

403-9 Work-related injuries

403-10 Work-related ill health

403-8 B-C: Not applicable, as stated above.

See Social performance overview
Omission: Incomplete. Nordic does not currently report fully on these indicators.

Human capital development

GRI 401: Employment

401-1 New employee hires and
employee turnover

See the Social chapter

401-2 Benefits provided to full-time
employees that are not provided to
temporary or part-time employees

All employees employed by Nordic, regardless of employment affiliation, are treated equally. Some benefits, however, are
related to type of employment. We follow legal requirements in addition to local market expectations to have a fair and
transparent practice. The following overview contains Norway-specific data. Nordic will strive to have a global dataset
going forward.

Human rights and labor rights

401-3 Parental leave

See the Employment engagement chapter

GRI 414: Supplier Social
Assessment 2016

414-1 New suppliers that were screened
using social criteria

414-1 A: 100% of new suppliers were screened using social criteria for the reporting period.

414-2 Negative social impacts in the
supply chain and actions taken

414-2 A: In 2022, Nordic assessed 118 companies divided by 20 countries for social impacts in our supply chain.
414-2 B-C: Out of the 118 companies assessed for social impacts, Nordic identified 15 companies as having significant actual
and potential negative social impacts.
414-2 D-E: Nordic has identified 4 companies as having significant actual and potential negative social impacts where we
have indicated remediation action based on the collected assessment data. In 2023 we will review the implementation status
of remediation and additional follow up actions.

Resource reduction

GRI 301: Materials 2016

301-1 Materials used by weight or volume

Omission: As a fabless semiconductor company that works with various manufacturing partners and suppliers, Nordic does
not currently have available all the required data for all materials used by weight or volume. Nordic aims to advance its data
collection to enable reporting on such indicators going forward.

133133

301-2 Recycled input materials used

See the Environment chapter, and the sub-chapter on Resource reduction

301-3 Reclaimed products and their
packaging materials

See the sub-chapter on Resource reduction

Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607nordicsemi.com