Nordic Semiconductor Annual Report 2023

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FY2023 Annual Report · Nordic Semiconductor

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ANNUAL
REPORT
2023

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

Board of Directors

Executive Management

Financial

Risk management

Risk factors

Sustainability statement

General information

Governance

Strategy

About the double materiality
assesment

Environment

Climate Change

Pollution

Water and Marine Resources

Biodicersity and Ecosystems

Circular Economy

Social

Own Workforce

Workers in the Value Chain

Consumer and End products

Governance

Business Conduct

Outlook

EU Taxonomy

Concluding remarks

100

Financial statements

Income statements

Statement of financial position

Cash flow

Disclosures

Alternative Performance Meassures

Responsibility statement

Audit opinion letter

07 Appendices

Board of Directors' report in relation to the
Norwegian Code of Practice for Corporate
governanceStatement of financial position

TCDF index

GRI and CSRD Index

102

103

106

107

138

147

157

160

2023

Message from
the CEO

2023Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices010203040506072023

Message from the CEO

Taking over the reigns as CEO on 1 January 2024, I have made it clear from the start that my top
priority is to regain growth and restore profitability. Nordic Semiconductor’s main markets have been
in a cyclical downturn with macro headwinds over the past year, and after three years with average
growth of close to 40% the revenue declined by 30% from 2022 to 2023. The revenue decline is a
challenge for an operating model that has been geared towards growth and innovation, and we
need to drive revenue and strengthen profitability to be able to continue investing into the exciting
long-term market opportunities. We have an excellent starting point with our leading technologies,
products, and solutions, world-class R&D engineers and great people in sales and other functions.

The market will eventually recover, that’s the cyclical
nature of our business. But rather than bet on the
timing of the upturn, we are focused on the things we
can do something about. We need to make sure that
we have the best products and solutions on the market,
and we need to make sure that we are working closely
with the customers that are going to create growth
going forward.

We are industry innovators and our leading products
and solutions have earned us market leadership and an
impressive customer base. It is the responsibility of my
management team and me that we get the most out of
this valuable resource base.

Technology developments and innovation have
always been driving our industry forward, and I
believe it is crucial for any semiconductor company
to deliver consistently on the development roadmaps
to stay on top of market developments and customer
demands. Development cycles are relatively long in
semiconductors, and it is very important that we make
the right investments at the right time. Together with

It is crucial to
deliver consistently
on the development
roadmaps to stay
on top

the operational teams I have therefore been focusing
sharply on our products, development roadmaps, and
engineering execution in my first months.

On that note, we are obviously excited about the
next generation nRF54 Series SoCs, which offers
our customers higher performance, lower energy
consumption and many new and innovative features.
Our expectation is for the nRF54 Series to start shipping
towards the end of 2024, and to contribute significantly

to the company in the years to come. We have also
recently launched new products for cellular IoT and for
power management, as well as launching our first Wi-Fi
6 chip last year.

Over the years, Nordic has developed strong customer
relationships with some of the world's leading
technology consumer brands as well as with prominent
names in the industrial and healthcare markets.
Demand from these tier-1 customers held up well
through 2023, and we continue to put a lot of effort
and investment into maintaining and further developing
relationship that will bring great consumer technology
products to the market and build the Internet of Things.

At the same time, Nordic’s initial success in the
Bluetooth market was built on combining leading
products and great developer support for the many
small and medium companies in the broad market.
Many customers in this space have been struggling
over the past years, with a challenging supply situation
during 2021-22 and a tough market in 2023. We remain
the clear market leader in terms of the number of

2023Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607
design wins in the Bluetooth® Low Energy market (43%
according to FCC and Bluetooth SIG data analyzed by
DNB Markets) and we need to build from this position
to regain commercial traction in this important part
of the market. I got to meet many of our customers
at the Consumer Electronics Show (CES) in Las Vegas
in January and throughout my first weeks, and look
forward to work more with our strong sales teams to
drive growth going forward.

strategy and supervised by the Board Sustainability
Committee, and our ESG responsibilities are integrated
in our governance structures. We continue to gain
recognition for our sustainability reporting, with an
A- rating from the Carbon Disclosure Project and a
B+ rating in Position Green’s ESG100 report for 2023
along with being listed on Financial Times 500 Europe’s
Climate Leaders. We are also part of the Sustainalytics
2024 ESG Top-Rated Companies List.

Finally, I want to thank all our fantastic employees for
their efforts through a challenging year in 2023. Having
been in the job for only a few months, I have yet to
meet all our more than 1,400 capable and competent
employees, and I look forward to getting to know more
of you in the time to come. Together we can make
sure that we continue to make the best products and
solutions on the market and remain the best possible
partners for our customers and suppliers going forward.

The developments over the past years have outlined
our exciting opportunity space but also shown the
complexity of a value chain where we are dependent
on our strong partners both upstream and downstream.
While we greatly appreciate the partnerships we have
developed over many years, we have also taken steps
to improve the resilience of the value chain. As an
example, we have included Global Foundries to our
supplier base and are now sourcing 22 nanometer
wafers across foundries and geographies for the various
nRF54 Series SoCs.

Digitalization, connectivity and IoT can play an
important role in solving many environmental and social
challenges and help build a more sustainable economy.
Representing Nordic as a UN Global Compact signatory,
the Board and management work for the progression of
the UN Sustainable Development Goals (SDGs) through
Nordic’s business operations, and remains committed
to the principles of human rights, workers’ rights, the
environment, and anti-corruption as outlined by the
UN Global Compact. Sustainability is integrated in our

2023

2023Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices010203040506072023

Nordic at a glance

2023Message from the CEONordic at a glanceFinancial highlightsESG highlightsProductsReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices030405060701022023

Design win marketshare

Design win leader

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Markets

Healthcare
19%

43.4%

45.0%

42.2%

39.1%

43.4%

2019

2020

2021

2022

2023

Market design wins

Investing in a complete
connectivity portfolio

Other
3%

Margins development

Industrial
22%

Consumer
56%

776

610

53.5%

56.2%

542

52.3%

50.9%

288

405

52.8%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

800

700

600

500

400

300

200

100

2019

2020

2021

2022

2023

Gross margin%

Revenue

202303040506070102Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendicesFinancial highlightsESG highlightsProducts2023

40%

of device containers made
of recycled plastic

89%

of the energy used by our offices
generated from renewable energy sources

7.9

score on employees’ perception
of integrity culture out of 10

23.4%

share of new hires
are female

nationalities in

countries

0.2

Above benchmark on
collaborative culture

19%

decrease of scope
3 emissions

54%

decrease of scope
2 emissions

Awarded

Received

A-

B+ ESG Top-Rated

Companies list

Report from the
Board of Directors

2023Our groupFinancial Risk managementSustainability statementEnvironmentSocialGovernanceOutlookEU TaxonomyConcluding remarksMessage from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices040506070102032023

Report from
the Board of Directors

In 2023, despite a persistent cyclical downturn that led
to a decline in revenue, Nordic successfully maintained
its gross margins above the long-term target. The tier-
1 customer base continued to demonstrate strong
demand, underscoring the resilience and value of existing
partnerships. Amidst these challenging conditions,
Nordic launched exciting new products and completed
strategic acquisitions, laying a robust foundation for future
growth. These initiatives signaled Nordic's commitment
to innovation and strategic positioning to capitalize on
market recovery.

The board of directors bear the ultimate
governance, social and environmental
responsibility for the group. In doing so the
Board of Directors disclose the statement of
governance in accordance with rskl. § 3-3b
in appendice Board of Directors' report in
relation to the Norwegian Code of Practice
for Corporate governance. Furthermore,
the statement of social responsibility in
accordance with rskl. § 3-3c is found in
Sustainability statement, Environment,
Social, and Governance.

Group overview
Nordic Semiconductor (Nordic or "the Group") is a
fabless semiconductor company designing, marketing,
selling, and supporting hardware products, embedded
software, and cloud-based services enabling wireless
connectivity solutions.

Nordic has been a pioneer within low-power wireless
connectivity since its beginning in 1983 as an integrated
circuit consultancy. Starting with proprietary 2.4GHz
technology for PC accessories in 2002, Nordic has
developed into a leading global supplier of Bluetooth LE
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 offerings include integrated circuits
(ICs), Systems-on-Chip (SoCs), Systems-in-Package
(SiPs), and software development tools. The Group
sources components, 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 2023, 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, Seattle and
San Diego (USA).

Strategy and ambitions
Nordic Semiconductor's vision is to become the world-
leading provider of end-to-end wireless IoT connectivity
solutions, with a sustainable footprint. Despite a
persisting cyclical downturn in the demand for wireless
solutions in 2023, the Group continues to innovate and
expand, confident in the resilience and future growth
of the market. The Group offers proprietary technology
and low power Bluetooth LE and multiprotocol wireless
technologies in the short-range market. Additionally, it
provides cellular IoT over LTE-M and NB-IoT networks
in the long-range market. Furthermore, in 2023, Nordic
expanded its offering with the launch of its first Wi-
Fi solution.

The Group is fully dedicated to offering the three key IoT
wireless technologies: Bluetooth LE, Wi-Fi, and cellular
IoT. In 2023, the Group introduced the nRF54 Series, a
groundbreaking addition to its globally market-leading
Bluetooth chip lineup. The nRF9161 SiP has also been
unveiled, enhancing the Group's cellular IoT offerings
and marking its entry into non-cellular 5G technology
with DECT NR+ support. Additionally, the Group started
mass production of its first Wi-Fi product and expanded
the series with further launches. Concurrently, the
Group also launched accompanying products like the
nPM1300 PMIC, which streamlines power management
in IoT applications.

Nordic Semiconductor's mission is to make low power
wireless IoT connectivity accessible to all. This means
reducing unnecessary layers of technical complexity
and offering the hardware and software required to
build robust and market-ready turnkey solutions. The
DevZone developer community remains a cornerstone
of the Group's mission, fostering innovation and
engagement among developers. With more than one
thousand unique development projects, the Group
tracks each project and supports them at varying
degrees, showcasing Nordic's dedication to the
developer ecosystem.

While unit shipments in 2023 have not matched the
previous year's volume, the Group's market position
remains strong, supported by a diversified customer
base that includes individual developers and leading
global enterprises. The Group's sustained market
leadership since the introduction of Bluetooth LE
products in 2012 demonstrates its enduring relationships
with tier-1 customers and its adaptability to changing
market dynamics. This foundation is expected to
strengthen further with the introduction of the
nRF54 Series.

The Group's employees are its greatest asset. The
multitude of nationalities combined with an average
tenure of 5.5 years serves as proof of the Group's
commitment to maintaining a diverse and inclusive
workforce, attracting and retaining individuals from all
backgrounds. In 2023, the Group's global workforce has
remained just shy of 1500. This highly skilled workforce
has made notable product launches while further
developing exciting launches to come.

Strategic acquisitions in 2023, including Mobile
Semiconductor and the intellectual property portfolio
of Atlazo, have bolstered the Group's technological
capabilities. These acquisitions are particularly impactful
in embedded memory technology and AI/ML for low-
power IoT solutions. They are integral to the Group's
strategy, enhancing its product offerings and positioning
it at the forefront of innovation in the IoT space.

The Group continues to invest in sustainable solutions
and has enhanced its ESG framework with a dedicated
Sustainability Committee at the Board level to navigate
the evolving landscape of ESG regulations.

In summary, the Group is navigating the current market
with a positive outlook, driven by strategic investments,
product innovation, and acquisitions. It is poised to
capitalize on market recovery. The Group remains
dedicated to its long-term vision of leading the world in
end-to-end wireless IoT connectivity solutions.

High ambitions
Clear strategic roadmap to
generate long-term proﬁtable
growth and value generation
and solutions contributing
to positive planet impact

Lead on connectivity
Ultra-low power and high
performance at the right price

Investing early
Willingness to invest
in high-growth
opportunities

Company
strategy

Excite developers
Ease-of-use, value-add
solutions and strong
tech support

Customer engagement
Combining broad market and
tier-1 engagement models

Scalability
Proven scalability across
technologies, markets and
customers

Employee engagement
Attracting and retaining world-class talent

Sustainability
Creating value for all our stakeholders by integrating
responsible practices in our business activities

Operational review
Demand and market share
Throughout 2023, Nordic Semiconductor faced a
challenging market environment with generally low
visibility in demand and with inventory corrections
through the value chain reducing visibility even further.
Nordic reported revenue of USD 542.9 million for 2023, a
decrease of 30% from USD 776.7 million in the previous
year. Revenue was supported by inventory build-ups
through 2022 and the first half of 2023, as wafers
supplies were no longer constrained. However, with
slower demand both distributors and end-customers
scaled back inventories in the latter part of the year,
which accelerated the year-on-year revenue declines in
the second half of 2023 and into 2024.

The top ten customers have continued to show strong
and consistent demand throughout the period,
highlighting their critical role in the business and
demonstrating the value of Nordic's strategic priorities
and long-term relationships. In contrast, demand from
the broad market customers declined sharply last year,
particularly in China. Chinese customers accounted
for more than 20% in the beginning of 2022 however
declining through the year. This dropped below 10% in
2023 and remains at low levels.

In 2023, Nordic Semiconductor maintained a strong
presence in the Bluetooth LE market, achieving a market
share of 45% in new design certifications for the fourth
quarter and 43% for the full year. This performance
marks an increase from the previous year, where Nordic
held a 38% market share in the fourth quarter of 2022
and 39% for that entire year, as reported by FCC and
Bluetooth SIG data analyzed by DNB Markets.

The total number of new Bluetooth LE design
certifications in 2023 was 1,112, with Nordic technology
being incorporated into 483 of these designs. In
comparison, the total certifications in 2022 amounted to
1,136 for the full year, with 446 featuring Nordic chips.
Nordic is expanding its strong market presence and
continues to perform particularly well in large-volume
design applications.

In the second half of 2023, a cost optimization program
was completed. Cost optimization measures included
reduced use of consultants, streamlining of operational
structure, and an assessment of the total resources
required to continue the company’s main R&D programs.
The program led to a reduction in the number of
employees and full-time consultants by around 100
employees (~7%) and 30 consultants, respectively.

These measures will reduce quarterly operating
expenses by approximately USD 5 million. The program
has impacted the fourth quarter financials in 2023 and
is anticipated to have a full effect from early 2024.

New CEO announced
In December, Nordic Semiconductor announced that
Vegard Wollan was appointed as the new CEO, taking
over from Svenn-Tore Larsen, who decided to step down
after more than two decades of leadership. Wollan
comes with a strong background in the semiconductor
and electronics industry. He is one of the original
creators of AVR microcontroller technology and has
significantly contributed to the success of Atmel, where
he led the Touch and MCU business unit to achieve
a highly profitable USD 1 billion in revenue. Before
his appointment at Nordic, Wollan was the CEO of
Touchnetix, a company he founded in 2016, known for its
innovative work in touch technology.

2023

Product launches
In 2023, Nordic Semiconductor has further advanced the
field of wireless connectivity and power management,
delivering a comprehensive suite of products. The
introduction of the nRF54 Series, Nordic's latest
iteration of Bluetooth LE chips, represents a significant
development in the Group's product line. This series,
building upon its award-winning predecessors, offering
double the processing power of its predecessor and
integrates an MCU, external memory, and a wireless
SoC into a single device. With its advanced security
features, certified at the highest level by the PSA
Certified IoT security standard, the nRF54 Series is set to
meet the needs of Nordic's most demanding customers
and is projected to generate revenue in the near future.

Building on its 2022 entry into the Wi-Fi wireless IoT
market, Nordic began shipping its first chip in this
category, the nRF7002 Wi-Fi 6 companion IC, in the first
half of 2023. Later in the year, the company expanded
its Wi-Fi offerings by introducing the nRF7000 Wi-Fi
companion IC. This launch positioned Nordic as the first
company to offer globally a complete silicon-to-cloud
location solution that integrates Wi-Fi, cellular IoT, and
GNSS technologies.

Nordic's innovation also extended to power
management with the nPM1300 PMIC, which simplifies
the Bill-of-Materials by integrating multiple discrete
components into a single chip. This addition to power
management products, such as the nPM1100 and the
nPM6001, is optimized for the efficiency and compact
size requirements of advanced IoT applications.

On the cellular IoT front, the availability of the nRF9161
SiP, based on the nRF9160, introduced new features that
enhance the power efficiency and robustness of cellular
IoT applications. As the first device in the nRF91 Series
to support DECT NR+, a non-cellular 5G technology,
Nordic remains committed to advancing cellular
connectivity with ongoing efforts to enhance and refine
its technologies.

Throughout the year, Nordic Semiconductor has set
a new standard in Bluetooth capabilities, started
production in new markets with its first Wi-Fi solution,
and expanded its offerings in existing markets with
PMIC and cellular products. By offering a diverse and
high-quality product portfolio, Nordic is well-positioned
to be a leading provider for the next generation of
smart applications.

Acquisitions
Adding to the product launches, Nordic Semiconductor
has in 2023 also made notable investments in
technologies that enhance product capabilities. The
Group's investment in connectivity technologies and
capabilities underscores its belief in the synergy of
combining wireless standards and ultra-low power with
high performance at the right price.

Early in the year, Nordic completed the acquisition
of Mobile Semiconductor, a US-based specialist in
highly optimized embedded memory technology for
microcontrollers (MCUs) and Systems-on-Chip (SoCs).
Mobile Semiconductor where instrumental in enhancing
the memory performance of Nordic's renowned nRF52
and nRF53 Series Bluetooth SoCs, as well as nRF9160
cellular IoT SiPs. This ensured that customers benefited
from the most efficient and reliable solutions. By
bringing this technology in-house, we can further
expand on this differentiation for the nRF54 and
future devices.

Furthering its strategic vision, Nordic acquired the
intellectual property portfolio of Atlazo in the fourth
quarter, a move that opens new frontiers in AI/ML
technology for low-power IoT solutions. This acquisition
brings AI/ML capabilities to future Nordic's SoCs,
enabling enhanced computing power and sophisticated
services at the network edge. This technology is
particularly suited for a growing demand for on-device,
always-on computational processes with minimal
energy consumption.

Alongside Nordic's continued engineering work, these
acquisitions reflect Nordic's approach to product
development. By integrating these capabilities into the
existing and future product portfolio, Nordic is set to
offer an even more robust and versatile suite of ultra-
low power products with greater on-chip capabilities,
addressing the needs of a rapidly evolving digital world.

Setting the standards
Nordic Semiconductor actively engages with key
standard-setting organizations to standardize
communication protocols, aiming to increase
competition and innovation in the industry. In its
recent efforts, Nordic has joined the DECT forum as a
full member to contribute to the development of the
DECT New Radio (NR)+ standard. This new standard
is designed to support IoT networks with high device
densities and is intended for use in asset tracking, smart
city, and smart energy projects.

Empowering wireless innovation
Nordic also entered into a joint venture with four other
semiconductor industry players (Robert Bosch GmbH,
Infineon Technologies AG, NXP Semiconductors, and
Qualcomm Technologies Inc.) to advance the adoption
of RISC-V open-source chip architecture. This venture
focuses on commercializing RISC-V-based products for
the automotive sector, further expanding into mobile
and IoT markets. Nordic Semiconductor is proud to be
a driving force of wireless connectivity. By providing this
open-source chip architecture, Nordic is encouraging to
greater innovation in the wireless IoT market by lowering
the barriers-to-entry and level the playing field when it
comes to developing IoT applications. It gives developers
the freedom and flexibility, in certain applications, to
ensure extreme levels of low power consumption. The
new company, called Quintauris, received regulatory
approval in all relevant jurisdictions globally by the end
of 2023.

In addition to these initiatives, Nordic holds a position
on the Board of the Connectivity Standards Alliance
(CSA) as a Promoter Member. This role involves
contributing to the development of standards such as
Matter, which facilitates interoperability between smart
home devices. Nordic's involvement with the CSA is
part of its wider commitment to advancing wireless
communication standards.

Board of Directors

Birger Steen | Chair, shareholder elected
independent director
Chair of the Board since 2018 and board member since
2017. Member of the People & Compensation Committee.

Birger Steen is the CEO of FREYR Battery, a NYSE-listed
technology company focused on large-scale-eco-
friendly battery solutions to combat global emissions.
His 30 years of leadership and board experience in
the tech sector includes roles such as CEO of Parallels,
Inc. (2010-2016), WW Vice President of Distribution &
SMB at Microsoft Corp. (2002-2010), Thematic Partner
at Summa Equity AB (2019 -2023), CEO of Scandinavia
Online AB (2000-2002), VP at Schibsted ASA (1997-
2000) and consultant at McKinsey & Company (1993-
1997). He holds an MSc from the Norwegian Institute of
Technology, an MBA from INSEAD and is a graduate of
the Defence School of Intelligence and Security in Oslo.
He has previously held director positions at Pagero AB,
Nordea Bank Abp, Schibsted ASA, Cognite AS, and
PragmatIC Semiconductor Ltd.

Board meeting attendance: 12, PCC attendance: 5,
AC attendance: 4
Holdings in the company: 208,745 shares

Inger Berg Ørstavik | Shareholder elected
independent director
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 meeting attendance: 12, SC attendance: 5,
AC attendance: 7
Holdings in the company: 5,919 shares

Morten Dammen | Employee elected director
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 Group 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 meeting attendance: 12, PCC attendance: 5
Holdings in the company: 1,953 shares and 1,108 RSUs

Anja Dekens | Employee elected director
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 meeting attendance: 11, SC attendance: 5

Holdings in the company: 433 shares and 275 RSUs

Dieter May | Shareholder elected
independent director
Board member since 2024.

Dieter May is a German business executive with more
than 30 years' experience in high-tech industries,
spanning mobile products, large-scale cloud-based
consumer services, semiconductor technology. He
is currently a non-executive board member at Isorg
and non-executive director at Nanoco Technologies,
Ltd. His 30 years of leadership and board experience
in the tech sector includes roles as Chairman of the
Board and CEO at OSRAM Opto Semiconductors,
SVP Digital Products and Services at BMW Group, SVP
Mobile Phone Services at Nokia, and VP & GM Discrete
Semiconductors at Infineon Technologies. He holds a
Master of Electrical Engineering from FAU Erlangen-
Nürnberg.

Holdings in the company: 4,000 shares

Helmut Gassel | Shareholder elected
independent director
Board member since 2024.

Helmut Gassel is a seasoned and experienced
semiconductor executive with more than 30 years in the
industry. He is currently Co-founder & Partner at Silian
Partners SA. He held several leadership positions during
his 27 year tenure at Infineon Technologies, including
Board Member, Chief Marketing Officer - Member of
the Management Board, Division President. Mr. Gassel
received his degree as Dr.-Ing. Electrical Engineering
at University of Duisburg-Essen and Diploma in physics
from Ruhr University Bochum.

Holdings in the company: 0 shares

Snorre Kjesbu | Shareholder elected
independent director
Board member since 2023.

Snorre Kjesbu is currently Senior Vice President & General
Manager of Cisco Collaboration Devices. He is a global
citizen leading a worldwide organization responsible
for the collaboration devices business ranging from IP
phones to immersive video systems. Prior to his return
to Cisco, Kjesbu was Executive VP of Design, Creation
and Fulfillment at BANG & OLUFSEN in Copenhagen.
His résumé also includes SVP at Tandberg and being
responsible for R&D on wireless communication at ABB.
Kjesbu holds a Master of Science from the University of
Bristol and has been a guest lecturer at the Stanford
Network Research Center in Stanford University.

Board meeting attendance: 9
Holdings in the company: 6 661 shares.

Annastiina Hintsa | Shareholder elected
independent director
Board member since 2019. Chair of the People
& Compensation Committee. 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 at McKinsey & Co. and at the Bank
of Finland.

Board meeting attendance: 12, SC attendance: 5,
PCC attendance: 3
Holdings in the company: 4,919 shares

Anita Huun | Shareholder elected
independent director
Board member since 2019. Chair of the Audit Committee.

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 meeting attendance: 12, AC attendance: 7
Holdings in the company: 13,919 shares

Jon Helge Nistad | Employee elected director
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 meeting attendance: 12
Holdings in the company: 749 shares and 418 RSUs

Executive Management

Vegard Wollan | Chief Executive Officer /
President
CEO & President since 2024.

Mr. Wollan holds an M.S. degree from the Norwegian
University of Science and Technology in Computer
Science and Electrical Engineering, Trondheim. He
was appointed Chief Executive Officer of Nordic
Semiconductor from January 2024. Mr. Wollan started
his career with Nordic VLSI, which later became Nordic
Semiconductor. As one of the inventor team behind the
AVR microcontroller technology, Wollan in 1996 joined
Atmel as VP and General Manager of the Touch and
MCU Business Unit. Atmel was acquired by Microchip
Technology in 2016, and Wollan went on to establish
MyWo. In 2021, MyWo was merged into TouchNetix,
a global innovation leader in touch technologies,
where Wollan was the CEO previous to joining Nordic
Semiconductor. Vegard Wollan is based in Trondheim
and Oslo, Norway.

Holdings in the company: 50,000 shares, 11,240 RSUs and
11,240 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 from 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: 4,737 shares and 5,827 RSUs and
2,946 performance shares

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: 49,417 shares, 10,769 RSUs and 10,769
performance shares

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

Mrs. Finneng has 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: 4,337 shares, 8,955 RSUs and 8,955
performance shares

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

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

Holdings in the company: 16,401 shares, 8,868 RSUs and 8,868
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: 219,653 shares, 14,301 RSUs and
11,351 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: 205,345 shares, 8,193 RSUs and 8,193
performance shares

Mr Ferm holds a M.Sc. degree in Electrical Engineering
from Chalmers Institute of Technology. He joined Nordic
in 2008 and has held several positions within R&D,
such as digital designer, project manager and program
manager for several products in the Nordic portfolio. Mr
Ferm most recent position in Nordic was group manager
for the Wi-Fi group. Prior to working for Nordic, he
worked for Nokia in Copenhagen, Denmark. Joakim
Ferm is based in Oslo, Norway.

Joakim Ferm replaced Svein-Egil Nielsen which held the
position as CTO/EVP R&D from 2013 until resigning on
March 15, 2024

Holdings in the company: 1,312 shares, 4,025 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: 141,632 shares, 7,108 RSUs and 7,108
performance shares

2023

Nordic reported revenue of USD 542.9
million for 2023. This corresponds
to a decline of 30.3% compared to
2022 reflecting a cyclical downturn in
the electronics industry among both
consumer and industrial customers.
Bluetooth revenue declined by 27.7%
to USD 483.9 million and proprietary
declined by 54.5% to USD 34.4 million.
2023 gross margin of 52.3% and
EBITDA margin of 9.0%.

2023

Review of the annual accounts
Nordic prepares consolidated annual accounts
in accordance with IFRS (International Financial
Reporting Standards) as approved by the EU, relevant
interpretations, and the Norwegian Accounting Act. A
summary of internal controls related to the accounting
process can be found in the Corporate Governance
section of this Annual Report.

The Group has identified gross margin, EBITDA, EBITDA
margin, short-range EBITDA margin, total operating
expenses and cash operating expenses 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-
user markets.

Revenue by technology
USDm

Bluetooth

Proprietary wireless

Short-range wireless
components

Cellular IoT

ASIC Components

Other

Total

2023

483.9

34.4

2022

669.1

75.7

Change

-27.7%

-54.5%

518.3

744.8

-30.4%

17.6

4.7

2.3

25.4

4.6

2.0

-30.8%

2.0%

17.9%

542.9

776.6

-30.1%

Total revenue decreased by 30.1% to USD 542.9 million
in 2023, down from USD 776.6 million in 2022. This
decrease reflects weak end-user demand and continued
inventory adjustments at both end-customer and
distributor levels.

Revenue from Bluetooth decreased by 27.7% to USD
483.9 million in 2023. Bluetooth accounted for 89% of
total revenue in 2023. The revenue decrease primarily

reflects weak end-user demand, especially in Consumer
and Industrial markets, combined with continued
inventory adjustments at both end-customer and
distributor levels.

Industrial revenue declined by 39% in 2023 to USD
117.2 million. This is driven by a general downturn in
the market.

Revenue from Nordic’s proprietary products decreased
by 54% to USD 34.4 million in 2023. The 2022 figures
were boosted by increased demand for PC accessories
and home office equipment due to Covid. The decline
continued into 2023, despite a partial rebound in the
second half of the year. The overall decrease is due
to weak cyclical demand and a structural shift as
customers move towards technologies like Bluetooth
Low Energy.

Revenue from cellular IoT decreased by 30.8% in 2023 to
USD 17.6 million. Revenue from cellular IoT is distributed
over a multitude of customers with new and innovative
products and Cellular IoT revenue remains lumpy
and exposed to individual customers' production and
purchasing patterns.

Sales of ASIC products increased by 2.0% in 2023 to
USD 4.7 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

2023

2022

Consumer

Industrial

Healthcare

Other

Total

302.5

483.8

117.2

103.3

15.2

538.2

191.5

67.6

29.2

772.1

Change

-37.5%

-38.8%

52.8%

-48.0%

-30.3%

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

Consumer revenue decreased by 37% in 2023. The main
reason for the decline is reduced revenue from PC
accessories for home offices and gaming.

Healthcare revenue increased by 52.8% in 2023.
Nordic has identified the Healthcare market as a
potential growth area. The Group continues to view
the healthcare as a market with potentially disruptive
growth possibilities and one of the key growth drivers
for combined short-range and long-range products and
solutions. Although revenues are still dependent on a
relatively small number of customers and hence prone
to wide variations across quarters.

Revenue in the "Other" markets decreased by 48.0%.
This mainly reflects sales to module manufacturers
servicing many end products in all markets and regions.

Gross profit
USDm

Gross Profit

Gross Margin

2023

283.7

2022

436.8

52.3%

56.2%

Change

-35.0%

-4.0%

Gross profit amounted to USD 283.7 million, a decrease
of 35.0% from the previous year. Hence, gross margin
decreased to 52.3% in 2023 from 56.2% in 2022.

The continued strong underlying gross margin reflects a
market leading product portfolio. Nordic tier-1 customer
demand has remained strong in this challenging market
situation, impacting the overall achieved Gross Margin.
In addition, the margin in 2022 was positively influenced
by the depletion of materials that were bought prior to
supplier 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.

Operating expenses
USDm

Payroll expenses

Other OPEX

OPEX excl. D&A

Depr. & Amort.

Total

2023

153.0

81.7

234.7

44.3

279.0

2022

161.4

69.7

231.1

44.1

275.2

Change

-5.2%

17.2%

1.5%

0.6%

1.4%

Operating expenses excluding depreciation and
amortization amounted to USD 234.7 million in 2023.
This was an increase of 1.5% from USD 231.1 million
in 2022.

The modest increase in expenses is due to a
combination of factors: a decrease in variable
compensation, higher levels of capitalization and
positive currency impacts. These are somewhat
counterbalanced by expenditures associated with
restructuring, costs related to acquisitions, and product
cycle costs, along with a general inflation in the prices
of goods and services. The number of employees has
been maintained at a consistent level, partially as a
result of the restructuring efforts.

Measured by function, R&D accounted for USD 155.5
million of operating expenses in 2023 excluding
restructuring costs, compared to USD 160.5 million
in 2022. R&D intensity, measured as a percentage of
revenue, increased from 21% in 2022 to 29% in 2023. This
is primarily due to revenue fluctuations as investments
decreased USD 5.1 million in absolute terms. Nordic
has a strong commitment to innovation in existing and
new markets, and will continue to target long term R&D
investment level of 15%-20% of revenue.

SG&A excluding restructuring cost increased to USD 74.4
million from USD 70.6 million in 2022. As a percentage
of revenue, SG&A increased from 9% in 2022 to 14% in
2023 is primarily due to revenue fluctuations.

Total cash operating expenses amounted to USD 250.1
million, when adjusting for non-cash items, capitalized
development expenses, equity-based compensation,
and depreciation and amortization. This was an
increase from USD 229.8 million in 2022.

Nordic capitalized USD 22.0 million development
expenses in 2023, up from USD 6.5 million in 2022.
Capitalization has increased as more of Nordics next
generation are in the commercialization phase. Equity-
based compensation was USD 6.5 million, compared to
USD 7.8 million in 2022. 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)

2023

49.0

9.0%

115.4

22.0%

4.7

2022

205.7

26.5%

262.2

34.9%

161.6

EBIT margin

0.9%

20.8%

Change

-76.2%

-17.5%

-56.0%

-12.9%

-97.1%

-19.9%

Earnings before interest, tax, depreciation, and
amortization (EBITDA) amounted to USD 49.0
million, a decrease from USD 205.7 million in 2022.
The corresponding EBITDA margin decreased 17.5
percentage points to 9.0%.

Short-range EBITDA totaled USD 115.4 million equivalent
to a margin of 22.0% in 2023. This is compared to a
Short-range EBITDA of USD 262.2 million and a margin
of 34.9% in 2022.

Depreciation and amortization amounted to USD 44.3
million in 2023, compared to USD 44.1 million in 2022.

Operating profit (EBIT) amounted to USD 4.7
million, compared to USD 161.6 million in 2022. EBIT
margin decreased to 0.9% in 2023 from 20.8% in 2022.

Net financial items
USDm

Net interest

Net financial items

Total

2023

2022

6.0

1.4

7.4

4.9

0.6

5.6

Nordic had net interest gain of USD 6.0 million in 2023,
compared to net interest gain of USD 4.9 million in 2022.

Profits and taxes
USDm

Profit before tax

Income tax expense

Net profit after tax

2023

12.1

-4.4

7.6

2022

167.2

-44.8

122.3

The Group recognized tax expense of USD 4.4 million,
corresponding to an average tax rate of 36.8%. This
compares to USD 44.8 million and an average tax rate
of 26.8% in 2022.

The parent company’s statutory tax rate is 22%.
Historically, the 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
was offset by foreign exchange gains in statutory tax
return. Nordic has, similarly, had currency gains in the
NOK statutory tax return during 2023, resulting in a high
effective tax rate.

Tax payable amounted to USD 6.3 million, compared
to USD 43.7 million in 2022, with the balance reflecting
changes in deferred tax and tax benefit.

Financial position
Balance sheet
Nordic has total assets of USD 862.2 million at the end
of 2023, of which USD 609.2 million are in current assets
and USD 253.0 million are in non-current assets.

These assets were financed by total equity of USD 602.1
million at the end of 2023, non-current liabilities of USD
146.0 million and current liabilities of USD 114.2 million.

Current assets were USD 609.2 million at the end of
2023, compared to USD 674.1 million at the end of 2022.
This included cash and cash equivalents of USD 291.0
million at the end of the year, down from USD 379.1
million at the end of 2022.

Inventory increased to USD 163.1 million from USD 102.1
million at the end of 2022. Total inventory during 2022
was impacted by supply constraints and Nordic has
been able to strategically build inventory in 2023.

Accounts receivables decreased to USD 133.3 million
from USD 175.1 million at the end of 2022, due to
lower revenues.

Overall, net working capital amounted to USD 220.4
million, compared to USD 167.6 million at the end of
2022. Measured as a percentage of full year revenue,
net working capital increased to 40.6% from 21.6% at the
end of 2022. This is mainly a result of higher inventory,
lower accounts payable and tax payable offset by lower
accounts receivable.

Non-current assets increased to USD 253.0 million at
the end of 2023 compared to USD 102.1 million end of
2022. One major driver for this change is a prepayment
of USD 100.0 million made in Q1 2023 related to
ongoing initiatives to strengthen supply resilience and
diversification.

Fixed assets totaled USD 29.1 million at year end, down
from USD 35.6 million in 2022. Software and other
intangible assets increased to USD 19.1 million from 11.7

million. Capitalized development expenses increased
to USD 38.9 million from USD 26.6 million at the end
of 2022.

Total shareholders’ equity amounted to USD 602.1 million
at the end of 2023, up from USD 583.5 million at the
end of 2022. The Group equity ratio was hence 69.8% at
he end of 2023, compared to 75.2% at the end of 2022.

Total liabilities amounted to USD 260.2 million,
compared to USD 192.7 million at the end of 2022.
Non-current liabilities increased to USD 146.0 million
from USD 15.5 million mainly from the issuance of a
NOK 1 000 million bond in Q4 2023 but also impacted
by new and extended office leasing agreements. Lease
liabilities of USD 47.9 million are included in the non-
current liabilities.

Current liabilities decreased to USD 114.2 million from
USD 177.2 million. The decrease is mainly explained by
lowered accounts payable, other current liabilities and
tax payable.

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

2023

2022

-119.8

-53.5

84.5

0.6

-88.1

379.1

291.0

142.7

-30.6

-11.3

-1.0

99.8

279.3

379.1

Cash flow from operating activities was an outflow of
USD 119.8 million in 2023, compared with an inflow of
USD 142.7 million in 2022. The reduced operating cash
flow is a result of lower earnings, higher taxes paid and
net working capital affects combined with prepayment.

Cash flow used for investing activities had an outflow
of USD 53.5 million in 2023, compared to an outflow of

USD 30.6 million in 2022. Capital expenditure increased
to USD 25.5 million from USD 24.1 million, including
software, whereas capitalized development expenses
increased to USD 22.0 million from USD 6.5 million. The
higher capitalization is a result of the nRF54 product has
entered final development stages. Capitalization level
is reflecting the anticipated scope of new technologies,
functionalities, or products soon to be ready for mass
market. Cash flow from investing activities in 2023 is
also impacted by acquisition of Mobile Semiconductor
Inc. and asset purchase from Atlazo Inc.

Cash inflow from financing activities was USD 84.5
million in 2023, mainly reflecting the bond issue of
USD 93 million made in forth quarter of 2023. Prior to
the bond issue Nordic did not have any debt as part
of the regular financing. Nordic decided to do a first
time issue in the bond market, mainly to strengthen the
balance sheet to secure future growth. In comparison,
there was a cash outflow of USD 11.3 million in 2022,
mainly reflecting cash settlements of employee
options contracts.

Including the effect of exchange rates, net change in
cash and cash equivalents was a cash outflow of USD
88.1 million in 2023, compared to a cash inflow of USD
99.8 million in 2022.

Cash and cash equivalents decreased to USD 291.0
million at the end of 2023, from USD 379.1 million at
the end of 2022. The cash is mainly held in the Group’s
functional currency USD to minimize the impact of
currency fluctuations.

In addition to cash at hand, Nordic has undrawn
sustainability linked RCF of USD 200 million. All
included, available cash amounted to approximately
USD 491 million at the end of 2023.

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.

Risk management

The Group's corporate level risk management
framework aims to proactively identify and manage
the risks that may impact our ability to deliver on
our strategic objectives. The Executive Management
Team (EMT) is accountable for managing risks and
opportunities at a consolidated corporate level. The
Board of Directors oversee risk management through
bi-annual reviews of important areas of exposure and
controls, as well as on an on-going basis in relation to
specific projects or other matters of regular business.

Nordic Semiconductor's risk framework

Risk factors

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

Trade tensions

Adverse global economic conditions and Geopolitical risks

Operational, Financial & Legal risks

Product ramp

Product liability warrant claims

Product security

Credit risk

Intellectual property rights

Information security and cyber risks

Acute physical events and natural disaseters - Climate

Failure to comply with regulatory requirements

Exchange rate and interest rate risk

Environmental

Influence

Impact

Nordic Semiconductor's 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

2023

Risk factors
In conducting business, the Group faces risks that may interfere with 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 best efforts, risk mitigating initiatives may fail or prove to be inadequate to
mitigate all risks. As Nordic’s risks increase, decrease, and as new risks emerge over
time, the information of this section should be carefully considered by investors. For
further details around the Environmental and Climate related risk, please refer to
sections Sustainability statement of the Annual Report.

Theme

Risk

Response

Cyclical nature of the
semiconductor industry

The cyclical nature of the semiconductor industry represents an inherent risk factor, characterized by periodic
fluctuations in demand and supply that can significantly impact the financial performance and stability of companies
operating within this sector. The semiconductor industry faces rapid technological shifts, swift product obsolescence,
volatile pricing, evolving standards, short life cycles, and erratic supply and demand, contributing to its inherent
instability. 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 in the semiconductor industry are typically marked by a decline
in product demand, sharp drops in average selling prices, decreased revenues, underutilized production capacity,
and increasing 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 and may experience such adverse effects in future downturns, which could be severe and prolonged.
The Group’s ability to reduce costs in periods of downturn through reductions in capital expenditures and research
and development expenses or other means may be limited because of the need to maintain its competitive position.

Nordic maintains a strong balance sheet with
sufficient liquidity to weather periods of reduced
demand. Additionally, Nordic is investing in
research and development strategically to
ensure that the Group stays at the forefront of
technological innovation, which can provide
a competitive edge and potentially stabilize
revenue streams during industry downturns. As
a fabless company, Nordic can respond to the
cyclical nature of the industry by leveraging its
ability to adjust inventory levels more swiftly
and with lower overhead costs compared to
traditional manufacturers.

Adverse global
economic conditions and
geopolitical risks

Nordic's growth is dependent, in part, on demand for its customers’ end products, primarily within the IoT, consumer,
healthcare, and industrial sectors. Industry downturns that adversely affect the Group’s customers or their customers,
could also adversely affect demand for the Group’s products. Additionally, global or regional economic slowdowns
affecting business and consumer confidence generally could cause demand for semiconductor products to decline.

Rising tensions and deteriorating military, political and economic relations between China and Taiwan could disrupt
the operations of third-party foundries, assembly, and test subcontractors, which could severely impact Nordic's
ability to manufacture the majority of our products and as a result, could adversely affect its business, revenues and
results of operations. Globally, more than 50% of all semiconductor wafers are sourced from Taiwan, hence increased
tension between China and Taiwan can significantly impact the Group's customers’ ability to manufacture their
products and thereby reduce demand for Nordic products.

In addition, there are also uncertainties in the global economy due to geopolitical risks related to the recent instability
in the Ukraine region, including supply chain disruptions and delays, increases in energy prices globally, increased
inflation and continued trade frictions. The conflict in Ukraine, as well as financial sanctions being imposed on Russia
by governments including in the United States, the European Union and the United Kingdom, have caused increased
volatility in financial markets, and have added to upwards pressure on prevailing energy and some commodity
prices, including the availability of certain commodities (for example gases) that are crucial in the manufacturing of
semiconductor wafers. The effects of the conflict in Ukraine, and any further escalation of hostilities, on the global
economy is difficult to predict, however any of the foregoing could cause or contribute to a broader global economic
downturn, which could affect global or regional demand for semiconductor products, which in turn could adversely
affect the Group’s business, financial condition and results of operations.

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 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.
Adding capacity amongst other in Europe can
reduce the effects of geopolitical tension.

Constraints in the supply
of wafers

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.
Nordic does normally not have long term supply contracts with its suppliers and delivery of materials and services
is dependent on the supplier’s ability to deliver on requested volume. Third-party wafer, assembly and test
subcontractors typically do not guarantee that adequate capacity will be available within the time required to meet
demand for the Group's products. Qualification of a new vendor can take at least twelve months and will also
require customer involvement, as the customer will need to qualify the vendor as well.

Over the recent years, the semiconductor industry has faced significant global demand fluctuations as well as supply
issues of various origins. Increased electrification of cars, the Covid-19 pandemic, the ongoing war in Ukraine, and
geopolitical- and trade tensions are examples of this. For Nordic Semiconductor, the combined effect of these factors
resulted in a prolonged shortage of wafer supply during 2021 and 2022, which in turn resulted in limited delivery
capabilities for certain products, notably in the higher end Bluetooth Low Energy series. Given current demand and
supply forecasts Nordic Semiconductor expects wafer supply to be sufficient to meet current requirements.

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, including sourcing of materials
from different regions.
Long term supply agreements have been used in
connection with introduction of new technologies.

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

Customer concentration

In 2023, Nordic derived around 57% 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's revenue could fluctuate materially
and could be materially and disproportionately impacted by the decisions of our largest customers if they were to
cancel or reduce their purchase commitments. Furthermore, in the event that 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.

In order to have a healthy mix between large
and broad market customers, Nordic strives to
maintain allocation to all customers. Nordic seeks
to expand customer base with new platforms
and technologies.

Attraction and retention of
key talent

Nordic‘s operational excellence and innovative edge are significantly driven by the expertise and leadership of its
senior executives, engineers, and other pivotal staff members. The company's ability to maintain its competitive stance
in the high-tech semiconductor industry hinges on the retention of these key individuals and the continuous attraction
of new talent, particularly in specialized technical roles essential for product development and technological
advancement. As technology advances, the complexity of semiconductor manufacturing increases. Developing
smaller, more powerful chips requires significant R&D investment and can strain existing manufacturing capabilities.
Competition for qualified employees among companies that rely heavily on engineering and technology is intense,
and the loss of qualified employees or an inability to attract, retain and motivate additional highly skilled employees
required for the operation and expansion of the Group’s business could hinder its ability to conduct research and
development activities successfully and develop marketable products. The Group’s success going forward depends
in part on its ability to continue to recruit, train, develop and retain such personnel, and if it loses key personnel to
competitors or at a rate greater than it anticipates, or if it has difficulty attracting new, highly talented employees, its
reputation and its business, financial condition and results of operations could be affected.

Nordic focuses on talent attraction, recruitment,
and retainment, as well as succession planning and
continues to develop organizational culture and
branding. The Group is continuously improving and
adapting its Employer Value Proposition.

Competitiveness of
Nordic products

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. Chinese competition increases as a result of China actively promoting its domestic semiconductor
industry through policy changes and investment. In addition, the US Chips ACT and EU Chips Act can result in
competition from competitors with access to favorable prices products in the US and Europe. 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 LE 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 Nordic may not be successful in executing its 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.

If the Group fails to keep pace with the rest of the semiconductor industry, it could lose market share in the markets
in which it competes. Any such loss in market share could have a material negative impact on the Group’s financial
condition and results of operations.

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 announced two new Bluetooth LE platforms
in 2023, both on 22nm process technologies.
The nRF54 products available for delivery in
second half 2024 will significantly improve our
product offering.

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. In relation to the competition
from Wi-Fi chips with Nordic acquisition of the
Imagination Wi-Fi assets Nordic has a product
roadmap to deliver low power combo chips on the
22nm platform.

Nordic will continue to monitor the trends in the
market, keeping the product portfolio relevant.
Including establishing the new RISC-V initiative.

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.

Trade tensions

Since 2018, there have been political and trade tensions among a number of the world’s major economies. These
tensions have resulted in the implementation of tariffs and non-tariff trade barriers and sanctions, including the use
of export control restrictions and sanctions against certain countries and individual companies. In particular, trade
tensions between the United States and China have resulted in significant tariff increases, sanctions against specified
entities, and the broadening of restrictions and license requirements for specified uses of products. The ongoing
geopolitical and economic uncertainty between the United States and China, and the unknown impact of current
and future United States and Chinese trade regulations, may cause disruptions in the semiconductor industry and
its supply chain or other disruptions. Such disruptions may increase production costs for the Group’s end-customers
and/or limit their ability to source certain components required for the production of their end-products, which may
reduce demand for the Group’s products and materially harm the Group’s business, financial condition and results of
operations. In addition, trade tensions can increase protectionism in global trade that can limit the Groups ability to
sell in certain regions. Some of the Group’s products are partly assembled in China and increased tensions between
the US and China can reduce the Group’s ability to sell to US customers. During fiscal year 2023, the percentage of
Nordic's revenue associated with end customers in China was less than 10%.

Acute physical events and
natural disasters - climate

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. If a major incident occurs, it is unlikely that Nordic in the short term would
get access to sufficient capacity.

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.

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

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
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.

Credit risk

Failure to comply with
regulatory requirements

Nordic relies heavily on information technology systems across its operations, including for procurement, research and
development, sales, delivery and various other processes and transactions. The Group’s ability to effectively manage
its business and coordinate the production, distribution and sale of its products depends significantly on the reliability
and capacity of these systems. In the addition, the Group 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 the
Group and any other affected parties to risk of loss or misuse of proprietary or confidential information or disruptions
of the Group’s business operations. The failure of the Group’s information technology systems to operate effectively,
problems with transitioning to upgraded or replacement systems, a material network breach in the security of these
systems as a result of a cyber-attack or other incident, or any other failure to maintain a continuous and secure cyber
network, could result in delays in customer service or a worsening in the Group’s relationships with customers, reduce
efficiency in its operations, require significant capital investments to remediate the problem or result in negative
publicity that could harm its reputation.

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.

Nordic is exposed to credit risk pursuant to trade credit arrangements with its distributors and certain customers. The
main counterparties are international distributors of electronic components. The Group 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 to the Group, the Group'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.

Nordic is subject to the regulatory regimes of each country in which it operates, including, among others, those
relating to antitrust, anti-corruption, corporate governance, labor, customs and environmental regulations.
Although the Group has in place internal controls and compliance systems for the purpose of complying with
such laws and regulations, there can be no assurance that such systems, and the Group’s other efforts to promote
compliance, will be effective. Any violation of the relevant regulations could result in criminal penalties, sanctions,
significant fines or mandatory suspension from certain business activities and could also adversely affect the
Group’s reputation, business and results of operations. The Group may also incur significant costs associated
with enhancing its compliance functions as regulations and laws change in the countries in which it operates. For
example, Semiconductor production is known to affect pollution. Potential pollution of air, soil and water in upstream
operations due to raw material mining, smelting and semiconductor manufacturing is strictly regulated by authorities
and adherence to regulations is strictly monitored by the Group’s customers. Failure to meet regulatory and/or
customer requirement framework related to substances of concern may negatively affect the market access and
customer's interest towards the Group’s products.

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

2023

Intellectual property rights

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.

The Group’s ability to compete in the semiconductor industry depends heavily on its technologies and know-how.
The Group commits significant resources to secure protection for such technologies and know-how through patents
and other forms of intellectual property rights, and to prevent dissemination of unpatented trade secrets and other
proprietary information, including by entering into confidentiality agreements with its employees and controlling
access to its offices and facilities. However, there can be no assurance that the measures the Group are taking will
effectively deter competitors from improper use of its intellectual property, particularly in countries and areas where
intellectual property may not be adequately protected. The Group’s competitors may misappropriate its intellectual
property, or its intellectual property may become known or independently developed by its competitors. In addition,
disputes may arise concerning the ownership of the Group’s intellectual property or the applicability or enforceability
of its confidentiality agreements, and there can be no assurance that any such disputes would be resolved in the
Group’s favor. Even if the Group is successful in any such disputes, it cannot be certain that it will have adequate
remedies for any such breach. If the Group is unable to adequately protect its intellectual property where relevant, it
could negatively impact the Group’s competitiveness and adversely affect its business and future prospects.

The Group’s hardware products include and rely on a number of technologies licensed from third party suppliers.
Failure to maintain such licensing arrangements can prevent the Group from developing, manufacturing or selling
its products and services. Most of these technologies are offered openly on the market on a non-exclusive basis,
and Nordic’s position is to arrange licenses for all technologies it relies on. One of these technologies, the Bluetooth
standard, is arranged so that all patents relevant for the standard is licensed to all members of the Bluetooth
Special Interest Group (SIG), of which the Group is a member. For the Cellular and Wi-Fi standards, the patent
owners have directed their licensing efforts towards end-product makers instead of component makers such as
Nordic Semiconductor. It is therefore up to the Group’s customers to obtain licenses to these standards. Access to the
necessary patents must be granted on “Fair, Reasonable and Non-Discriminatory terms” (or FRAND). Consequently,
the risk of the Group being the target of legal proceedings for failure to obtain license to the Cellular and Wi-Fi
standards should be small. In the event of legal proceedings related to the Cellular and Wi-Fi standard, the claim
would like be for a reasonable license fee rather than a “cease and desist” of selling a product line. Outside of these
established technology standards (Wi-Fi and Cellular) and industry organizations (Bluetooth SIG), there may be
patent holders who will assert their rights towards the Group. Such claims can also arise from “non-practicing entities”
who broadly assert patent portfolios accrued from third parties. Claims of patent infringement involve the risk of
litigation and can prevent or affect the Group’s ability to sell its established line of products. However, patent holders
will likely accept a license fee in exchange for a right to use their patent. Historically, all disputes have seen amicable
solutions, where a claim has either been dismissed by a court or the Group has paid a reasonable license fee.

Nevertheless, if the Group is unable to renew its existing technology licensing arrangements on acceptable terms, or
if such arrangements are terminated for any reason, the Group may lose the legal right to sell certain of its products.
The Group is therefore continuously evaluating second sourcing and new interest groups to decrease dependency
on such providers. In the future, the Group may need to obtain additional licenses for new or existing technologies.
The Group has made progress and signed license agreements on a component level and on behalf of customers
over the last year, but cannot provide assurance that certain license agreements can be obtained on acceptable
terms or at all. The Group’s business and operating results can be affected by such refusal, for example by patent
owners to license component manufacturers directly. The Group’s customers might choose other suppliers with better
indemnification protection for such risk. This is a wider industry problem, and not only a risk for the Group specifically.

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.

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.

Product liability and
warrant claims

The Group makes highly complex electronic components and, accordingly, there is a risk that defects may occur
in its products that are not detected during the development and manufacturing process. Such defects can give
rise to significant costs for the Group, including expenses relating to recalling products, replacing defective items,
writing down defective inventory, delays in, cancellations of, rescheduling or return of orders or shipments and loss
of potential sales. In addition, the occurrence of such defects may give rise to product liability and warranty claims,
including liability for damages caused by such defects. Moreover, since the cost of replacing defective products is
often much higher than the value of the products themselves, the Group may at times face damage claims from
customers in excess of its warranty obligations or the relevant sales amounts, including consequential damages.

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.

The Group also faces exposure to potential liability resulting from how its customers typically integrate the
semiconductors it sells into numerous products, which are then in turn sold into the marketplace. These end products
are often highly complex and may occasionally involve the use of the Group’s product in ways not originally
envisioned by it. In these cases, the Group’s products can only be fully tested when deployed in the end products,
and its customers may discover defects or errors only after the end products have been deployed. In addition, the
Group may be named in product liability claims relating to such end products even if there is no evidence that the
Group’s products caused a loss. Product liability claims could result in large expenses relating to defense costs or
damages awards. Such events could have a material negative impact on the Group’s reputation, business, financial
condition and results of operations.

Exchange rate and interest
rate risk

Nordic operates globally and is exposed to foreign currency risk, as its sales revenue and direct production costs
are almost entirely denominated in USD, whereas approximately 35% and 20% of its operating expenses were
denominated in NOK and EUR, respectively, in 2023. Fluctuations in the exchange rates between the USD, NOK or
EUR currencies may have an adverse effect on the Group.

Nordic keeps most funds in USD, but seeks to
have available NOK and EUR to fulfill ongoing
obligations.The bond proceeds are in NOK which is
a natural hedge of the bond nominated in NOK.

Environmental

The Group's operations, including those of our manufacturing partner, can have a negative impact on the
environment. Nordic recognizes that its customers, employees and other stakeholders place importance on
integrating renewable energy solutions throughout the supply chain. Shifts in perspectives may influence production
expenses, including the costs associated with adopting new production technologies and acquiring renewable
energy certificates. There is a risk that failure to meet diverse regulations could reduce Nordic's profit margins.

Nordic has set clear sustainability goals that
align with industry standards and stakeholder
expectations, aiming to reduce carbon footprint
and enhance energy efficiency

Nordic is working closely with its manufacturing
suppliers to encourage and support them in
adopting sustainable practices, thereby reducing
the environmental impact across the entire
value chain.

Sustainability
statement

Nordic operations extend across a
broad spectrum, influencing and
being influenced by environmental,
social, and governance topics. As
Nordic endeavors to contribute
positively on material topics, a
proactive approach is employed,
establishing attainable targets and
making beneficial impacts
wherever feasible.

General information

Governance

Strategy

About the double matriality Asessment

General information about the
sustainability statement
The sustainability statement presents the governance
and performance related to the material sustainability
topics for Nordic Semiconductor.

This general information section presents identified
material sustainability related impacts, risks and
opportunities, and principles for sustainability reporting.

Principles for sustainability reporting
To provide a comprehensive view of the Group’s
performance, Nordic has integrated the sustainability
and financial reports. The sustainability statement
is prepared on the same consolidated basis as the
financial statements. The sustainability statement
includes the ultimate parent company Nordic
Semiconductor ASA and its wholly owned subsidiaries,
as specified in Note 15: Investments in subsidiaries and
joint ventures. The basis for preparation of sustainability
information that relates to business relationships in
non-consolidated entities, including the upstream or
downstream value chain, is clearly identified as such.

The sustainability statement is approved by the
Board of Directors.

Statutory reporting and reporting standards
The sustainability statement is prepared in compliance
with the Norwegian Accounting Act, GRI and guided by
CSRD. Disclosures required by the UK Modern Slavery
Act 2015 and the Norwegian Transparency Act 2021 are
provided on Nordic website and in the chapters Own
workforce and Workers in the value chain, respectively.

Nordic Semiconductor is continuously working to align
with new and emerging regulations, standards and
frameworks. In 2023, Nordic has worked on aligning
the sustainability disclosures with the upcoming EU
Corporate Sustainability Reporting Directive (CSRD)
and the applicable European Sustainability Reporting
Standards (ESRS). Nordic Semiconductor will report in
compliance with the implementation schedule of the
CSRD and applicable ESRS in the 2024 report.

Nordic Semiconductor reports in accordance with the
GRI standards, please see the GRI index.

Nordic Semiconductor considers this report to be the
Communication of Progress (COP) to the United Nations
Global Compact (UNGC).

Reporting scope and disclosures in relation to
specific circumstances
The sustainability statement covers the period January
1 to December 31, 2023. Operational data and metrics,
are included for the ultimate parent company and
wholly owned subsidiaries for the period it has been
part of the group, unless otherwise stated.

Reporting systems
Metrics for climate change, energy, pollution, water,
resource use and waste are collected using production
system data, supplier reporting, employee registration
system and ERP system. Metrics for health and safety of
Nordic’s own workforce are collected using the reporting
systems for incident reporting, OHS non-conformity
reporting. Diversity and other metrics relating to own
workforce are collected from the employee registration
system, time registration system and ERP system, Nordic
Semiconductor’s global employee engagement survey
and whistleblower system. Data for workers in the value
chain is based on the due diligence processes and
data collected through Nordic’s supply chain function,
supporting staff functions and third-party data. Data
for consumers and end users are based on customer
surveys, including product quality.

Basis for preparation and limitations
The basis for calculations and presentation of
sustainability metrics is described in the respective
chapters. Controls are performed to ensure that the
information is complete and accurate. However, the
scope of the sustainability statement and the absence
of generally accepted reporting standards and practices
for certain data may result in uncertainties in the
reported information. It is Nordic’s ambition and a focus
area for us to enhance the data capture and verification
processes going forward.

Reporting changes
The sustainability disclosures in the annual report 2023
have been restructured based on the CSRD and the
ESRS. The changes include:

■ Restructuring of the sustainability disclosures:

sustainability disclosures are included in a dedicated
sustainability statement in the annual report. The
sustainability statement strives to follow the structure
required by the ESRS.

■

Introducing this section on general information,
corresponding to the structure and disclosure
requirements in the ESRS 2 standard.

■ Updated materiality assessment: the assessment of the
material sustainability topics of Nordic Semiconductor
was updated in 2023 based on the ESRS. See
the material topics section and About the double
materiality assessment section for more details.

■ Reporting on ESRS topical standards: a summary
of the double materiality assessment of material
impacts, risks and opportunities (IRO) in relation to
each relevant ESRS topical standard is included in
this general information section. Details on identified
IROs for each material sustainability section, including
related to due diligence and stakeholder engagement
activities, are presented under "Why it matters" in the
chapter corresponding to each material sustainability
topic. Each such chapter includes relevant commitment,
policies, targets and metrics in relation to the specific
sustainability topic.

■ Renaming of chapters: most topics scored the highest
in the assessments have been identified as material in
the previous material assessments. Nordic will continue
to report on these topics, but has chosen to adjust the
naming closer to the methodology used in the ESRS.
For example, "Compliance & Integrity" will now read
"Business Conduct".

■

Including a ESRS content index: Nordic has included
a ESRS index alongside the GRI index.

No material errors in prior periods have been identified.

Incorporation of ESRS requirements by reference
to other sections of the annual report and the
remuneration report
The description of Nordic’s strategy, business model
and value chain, inputs, outputs, outcomes and the
integration of sustainability matters and sustainability-
related goals (SBM-1), is presented above in the Group
overview, Strategy and ambitions, and Operational
review sections, as well as here in the Governance, and
Sustainability strategy sections.

Identified material sustainability topics are presented
below in About the double materiality assessment.

Information about how the Group integrate the
management of material sustainability impacts, risks
and opportunities into the business model (SBM-3) is
presented below as well as alongside the disclosures
provided in relation to each material sustainability topic.

Number of employees by geography is reported
in the Own Workforce chapter. Revenue by IFRS 8
segments is presented in Note 5: Revenues of the
financial statement.

The description of the Group’s governance bodies
(GOV-1) and their work to address sustainability matters
(GOV-2) are included here below in the Governance-
chapter, as well as the Board of Directors-, Executive
Management, Events & Developments, and the Board
of Directors Report in relation to the Norwegian Code
of Corporate Governance (NUES). The integration of
sustainability in performance incentive schemes (GOV-3)
is described below as well as the Remuneration report.
Payment and warranty terms to customers are specified
in Note 5.6 Performance obligations of the financial
statement. Payment terms for suppliers are the same
as for customers and Nordic adheres to agreements in
payment practices (G1-6).

Governance
The role of Nordic's administrative,
management and supervisory bodies
The Board of Directors, through its dedicated
committees, bears the ultimate responsibility and
maintains oversight of the Group’s integration of
sustainability in the value creation and performance.
Sustainability is integrated into all business activities.

Sustainability is an integral part of Nordic’s strategy,
and this wider objective is further defined by tangible
Environmental, Social and/or Governance (ESG) criteria
to allow for transparent follow-up and measurement
of performance.

The Management ESG Committee, consisting of EMT
members from relevant functional areas, is a supportive
body for the CEO in executing his responsibilities to
sustainable value creation. The Committee's main
responsibilities are to develop and maintain the Group
sustainability framework with defined ESG criteria,
prepare proposals for strategy and/or Group KPIs for
formal decision by the Board of Directors, ensure a
holistic and aligned approach to sustainability across
the Group, and serve as a sounding board for the
Group annual integrated report.

Further details of the composition, diversity and
independence of the administrative, management
and supervisory bodies are disclosed in the Board of
Directors, Executive Management, and Own Workforce
chapters of the sustainability statement.

Sustainability management processes
The Group strives to ensure embedment of sustainability
principles through various measures through the
organization. Nordic’s work is guided and inspired by
relevant international frameworks and standards, such
as the Universal Declaration of Human Rights, ILO
International Labor standards, the OECD Guidelines for
Multinational Enterprises, and ISO standards.

Nordic’s commitments are outlined and communicated
in the organization through the company’s policies and
relevant training. Raising awareness of 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 Semiconductor's environmental policy highlights
key issues relevant to the company and operations.
The policy is regularly reviewed and approved by the
Executive Management Team.

Nordic's Environmental Management System is ISO 14001
certified. Nordic requires all manufacturing partners
certified to this standard, as well as compliant with the
Responsible Business Alliance Code of Conduct setting
out standards to ensure safe, respectful, ethical and
environmentally responsible business conduct.

In 2023, management provided the Board of Directors,
through its Sustainability Committee and Audit
Committee, with deep dives on coming sustainability
reporting requirements, projects related to such
reporting, key metrics for the Group’s performance, and
compliance updates.

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

As a fabless company, engaging with suppliers
is relevant to decision making and risk analysis.
Nordic regularly analyses 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 by the Executive
Management Team.

Non-compliance matters are systematically registered
and followed up on with external and internal
requirements, including case handling, and identification
and sharing of potential improvements. Potential
environmental incidents are handled through Nordic's
non-conformity procedures with root-cause analysis and
corrective and preventive actions.

The status of Nordic’s work in relation to various topics
under the sustainability umbrella, including survey and/
or audit findings, is discussed and reviewed by the
Executive Management through the ESG Management
Committee and/or through management reviews on an
annual basis, or more frequently if required.

The Board receives regular updates on the company
strategy as well as the outcome of the company-wide
enterprise risk assessments. These include sustainability
topics such as environmental and climate risks, social
risks and governance-related risks.

Integration of sustainability performance
in incentive schemes
The Group defines annual targets and/or KPIs within
ESG themes to measure and monitor sustainability
performance. Furthermore, to ensure integration in
Nordic’s value creation, measurable ESG KPIs are linked
to Short-Term Incentive program for all employees and,
for the Executive Management Team, also linked to
the Long-Term Incentive programs. These programs are
approved on an annual basis by the Board of Directors.

Sustainability due diligence
In order to create value for all stakeholders, it is crucial
to understand and mitigate potential or actual negative
impact on the environment and people connected with
Nordic’s business. The Group’s due diligence practices
are guided and inspired by relevant frameworks such
as the OECD Guidelines for Multinational Enterprises
and the UN Guiding Principles on Business and Human
Rights. Such due diligence is gathered through a
combination of desktop exercises, direct and indirect
dialogues with Nordic’s stakeholders.

Core elements of due diligence

a) Embedding due diligence
in governance, strategy and
business

b) Engaging with affected
stakeholders in all key steps of
the due diligence

Sections in the
Sustainability report

1) Workers in Value Chain
2) Business Conduct

c) Identify and assessing adverse
impacts

1) Workers in Value Chain
2) Business Conduct

d) Taking actions to address
those adverse impacts

1) Workers in Value Chain
2) Business Conduct

e) Tracking the effectiveness of
these efforts and communicating

1) Workers in Value Chain
2) Business Conduct

Environmental Management Policy
Being a preferred partner to environmentally
conscious stakeholders, Nordic Semiconductor
shall incur no loss or 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 our suppliers live up to Nordic's
environmental standard

Establish and evaluate achievable

environmental performance goals to ensure
continuous improvement of our environmental
management system.

Regularly monitor and report on

environmental performance, and to consult
with relevant stakeholders on
environmental issues.

Risk management and controls of
sustainability reporting
Sustainability-related risks have been part of the
overall enterprise risk management framework and
assessments of the Group for some years. The main
purpose of the framework is to ensure a coordinated
process for the proactive and systematic management
of impacts, risks and opportunities that may impact the
strategic objectives of the Group. The main features of
the process, content and reporting is described in the
previous Risk Management section.

In 2023, the enterprise risk management procedure
and templates were revised to encompass coming
requirements related to double materiality assessments
of impacts, risks and opportunities. Read more about
the double materiality assessment in the section, "About
the double materiality assessment".

Nordic Semiconductor is exposed to risks associated
with incomplete or inconsistent reporting on
sustainability topics, including risks associated
with greenwashing. There are also risks related to
the accuracy of data inputs and manual errors in
the reporting process. An important focus area for
improvement of the sustainability management
framework in 2024 will be to enhance the Group’s
internal controls based on an assessment of risks in
the sustainability statements to ensure transparent and
verifiable quantitative and qualitative data input.

Sustainability strategy
Nordic’s mission is to be a world-leading supplier
of connectivity solutions. Read more about Nordic’s
strategy in the Strategy and ambitions section. The
Group’s vision for sustainability defines business success
as integrating responsible practices into business
activities, enabling us to drive innovation, foster long-
term growth, and create value for all stakeholders.

IoT is a crucial part of meeting sustainability
development goals
Nordic supports sustainable development goals by
contributing to IoT solutions for energy efficiency
and energy management. As shown in the following
figure, the examples 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 Nordic’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 also reduces
greenhouse gas emissions, essential for addressing
climate change.

Nordic Semiconductor designs, develops and sells
ultra-low-power hardware and supporting software
for product builders developing and manufacturing
Internet of Things (IoT) products. As a fabless company
without own manufacturing capabilities, Nordic relies
on business partners for the upstream part of the
value chain including manufacturing and assembly.
Downstream, Nordic collaborates with trusted
distributors to ensure an efficient service to customers in
various markets. With this, Nordic rely on the suppliers
to uphold common commitment for sustainable business
practices, including safeguarding the human rights and
well-being of the workers involved in the outsourced
production as well as relevant logistic activities. Nordic’s
customers consist of the wider ecosystem of business-to-
business (B2B) and business-to-consumer (B2C) product
builders, as well as Internet of Things (IoT) solutions.

Connectivity and low-power Internet of Things (IoT)
solutions will play an important role in achieving a
more sustainable economy. Nordic remains committed
to contributing to sustainable solutions through
products and services in such applications, as well
as ESG performance. 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. Nordic strives
to make its products smarter and more efficient
while consuming less energy. Nordic’s solutions allow
devices to harvest energy locally, perform efficient data
analytics, reduce data transfer, and decrease load on
energy-intensive data centers.

Conceptual illustration of the Internet of Things. Nordic continuously adds more intelligence and capability 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.

Remote patient
monitoring

Waste management

Professional lighting

Batteryless
asset tracking

Livestock tracking

This OxiWear device, powered
by the nRF52840 SoC, is an
ear-worn pulse oximeter for
continuous oxygen monitoring
and low oxygen alert. This
enhances healthcare efficiency
by enabling remote patient
monitoring, helping to avoid
hospitalizations and
unnecessary medical testing.
Nordic's low-power technology
extends battery life, resulting in
reduced resource
consumption. OxiWear's
energy-efficient design supports
eco-friendly healthcare practic-
es, facilitating timely intervention
and care delivery while minimiz-
ing environmental impact.

The Sensorita Sensor1,
leveraging Nordic's nRF9160 SiP,
embodies sustainability by
enabling efficient data collec-
tion for environmental monitor-
ing and smart waste
management. Nordic's nRF9160
SiP ensures a complete solution
of LTE-M module, low power
consumption, and quality sleep
modes, all enhancing sensor
longevity and reducing energy
requirements. This promotes
sustainable practices by
assisting the management and
collection of waste
containers, with minimal
ecological footprint. The Sensor1
exemplifies Nordic's commitment
to advancing sustainability
through innovative IoT solutions
for environmental monitoring
and conservation.

The obiWAN smart luminaire
controllers, utilizing Nordic's
nRF9160 SiP, enable intelligent
street lighting management for
efficient energy usage. Nordic's
solution ensures reliable
connectivity and low-power
operation, optimizing energy
efficiency. The smart streetlight
controllers can adapt to several
scenarios to provide better
lighting and save more energy,
which contributes to
environmental conservation by
minimizing resource
usage. All aligning with Nordic's
commitment to sustainable
IoT solutions.

Lightricity's 4EverTrack micro,
powered by the RF52805 SoC,
exemplifies sustainability by
operating perpetually on
harvested indoor light energy.
According to the company,
Nordic's low-power technology
minimizes the energy
consumption of this batteryless
indoor asset tracker tag,
providing a sustainable IoT
solution with a carbon
footprint reduction of over 50%
compared to battery-powered
alternatives. This supports
sustainable practices aligning
with Nordic's commitment to
advancing sustainable solutions
in IoT and technology.

Cellular Tracking Technologies'
FlickerGPS and FlickerCL utilize
Nordic's nRF9160 SiP, driving
sustainability through efficient
wildlife monitoring. Nordic's
technology enables low-power
operation, while the small size
and weight of the nRF9160
makes it possible to monitor
the activity level of species
weighing as little as 75 grams
without impacting their natural
behaviour. FlickerGPS and Flick-
erCL are contributing to wildlife
preservation while demonstrat-
ing Nordic's commitment to
sustainability in IoT solutions for
life on land.

Stakeholder dialogue
Stakeholder analysis is part of Nordic’s sustainability
reporting process, ensuring focus on the most relevant
topics. These topics matter to the Group, stakeholders,
and society at large, all of whom may be impacted by
Nordic’s operations and/or affect Nordic.

In order to be a world-leading supplier of connectivity
solutions, regular engagement with Nordic’s many
stakeholders is essential. Nordic engages directly with
internal stakeholders, such as employees, employee
representatives, and the Board of Directors through
established forums and surveys to ensure critical
alignment in the execution of business.

Nordic engage with customers, distributors, and
suppliers through engagement programs, including
direct dialogue, surveys, and audits to share information
and better understand their needs and find solutions to
common challenges. This gives us valuable input with
the potential to enhance Nordic’s business practices and
relationships.

Nordic report regularly to shareholders and ensure
direct engagement through relevant forums.

Outreach to educational institutions, memberships and
collaboration within industry associations and non-
governmental organizations are other critical elements
of Nordic’s stakeholder engagement both for technology
and standard development.

Overview of stakeholder analysis:

Market

Society

Internal

Owners

Stakeholder

Suppliers
Distributors
Customers
End users
Competitors
Stock exchange
Insurers & banks

Local communities
Industry associates
NGOs
Authorities
Media

Board of Directors
Employee representatives
Employees

Shareholders
Analysts
Rating agencies

Affected by/affected
operations

Users of info.

Example of stakeholder engagement

x
x
x
x
x
x

x
x
x

x
x

Supplier engagement, requirements & audits
Distributor engagement
Direct dialogue and surveys
Market intelligence/desktop analysis
Market intelligence/desktop analysis
Direct dialogue
Direct dialogue, contractual requirements

Outreach to educational institutions
Technology development collaboration
Monitoring standards, direct engagement
Monitoring development, direct interact.
Monitoring, direct interaction

Direct engagement
Engagement through established forums
Direct engagement and surveys

Regular reporting, direct engagement
Regular reporting, direct engagement
Annual reports, direct engagement

About the double materiality assessment
In 2023, Nordic Semiconductor have conducted the
materiality analysis according to the ESRS concept and
requirements of double materiality. Nordic assessed the
sustainability related impacts, risks and opportunities to
identify those most material the business has on people
or the environment, as well as those that may trigger
material financial effects on the Group.

The support included facilitating several workshops for
all relevant functions and business areas involved in
sustainability reporting in Nordic, including the members
of the Management ESG Committee. These upskilling
efforts have also enhanced Nordic’s tools and processes
for subsequent double materiality assessments.

The analysis consisted of desktop research and input
from stakeholders by the respective participants from
respective business units and corporate functions in the
assessments, in and between brainstorming sessions
and validation workshops. The workshops challenged us
to consider potential issues through Nordic’s entire value
chain, upstream and downstream, generating a long list
of impacts, risks and opportunities.

The criteria Nordic used for assessing the impacts,
risks and opportunities related to society and
the environment are based on the CSRD and the
respective ESRS. The criteria for assessing impact on
Nordic’s business come from the existing Enterprise
Risk Management framework. The latter was
subsequently updated to account also for impacts,
risks and opportunities related to the society and the
environment. In other words, the materiality of actual
impacts was determined by actual severity of the
impact based on a combination of scale, scope and
irremediability. The materiality of potential impacts was
determined by the severity and likelihood of impact.
The materiality of risks and opportunities was assessed
based on a combination of the likelihood of occurrence
and the potential magnitude of financial effects. The
potential magnitude was assessed by choosing one of
the following criteria: financial consequence, reputation,
or access to resources. The likelihood of potential impact
refers to the probability of the impact occurring.

New regulations require us to identify actual and
potential impacts, risks and opportunities throughout
Nordic’s entire value chain, beyond direct contractual
relationships. This includes, but is not limited to, the
Group’s own operations, upstream, downstream
and logistics. For companies with a business model
like Nordic's, that is, fabless where manufacturing
is outsourced and with with sales mainly through
distributors, getting access to information and direct
influence is challenging. However, Nordic acknowledges
that regardless of where in the value chain a certain
impact, risk or opportunity plays out, if it is material for
Nordic and/or its stakeholders, it needs to be included
in the sustainability reporting. Nordic’s ambition is
to work towards increasing data capture as it will be
required and relevant going forward.

The conclusions from the workshops, together with the
results and proposed material topics, were presented to
the Audit Committee and the Sustainability Committee
of the Board.

All identified sustainability related impacts, risks
and opportunities that are considered material for
affected stakeholders are presented in the graphical
representation of material sustainability topics on the
next page and described in the sustainability statement.
It should be noted that not all sustainability related
risks are specifically highlighted in the aggregated risk
profile of Nordic Semiconductor, described in the Risk
management section due to not all regulatory risks are
assessed operationally material.

The sustainability statement of Nordic Semiconductor
includes separate chapters on all material sustainability
topics covered by ESRS. The chapter for each
material sustainability topic includes a description
of sustainability context and dependencies ("Why
it matters"), summary of material impacts, risks and
opportunities in relation to the topic, and corresponding
disclosures on strategic commitments, policies
and targets.

Own operations

Upstream

Downstream

Nordic’s
sustainability
topics across
the value chain

Nordic
Semiconductor
Design & development
of hardware, software
and services

Sub-tier
suppliers
Raw material
production

Sub-tier
suppliers
Logistics

Tier-1
suppliers
Wafer production

Tier-1
suppliers
Testing & Assembly
of hardware

Suppliers
Logistics

Distributors
Sales & Logistics

Customers
Development
of IoT products

End-Users
Use of IoT products

E1 Climate change

A., III., a

A., III.

A., III., a, b, c, d

A., III., a, b

A., III.

1., A., III.

1., A., e

E2 Pollution

E3 Water & marine

E4 Biodiversity & ecosystems

E5 Circular economy

S1 Own workforce

2.,3., V.

B., II.

E., I.

I., IV.

S2 Workers in the value chain

3., f

S4 Consumers and end users

3., f

G1 Business Conduct

W
Drivers of positive sustainability related impact

IoT technology has potential to reduce GHG emissions downstream

Potential & actual sustainability related opportunities

I. Resource efficiency and increased use of renewable energy

2. Our workforce innovates and sells future connectivity products with positive financial impact

II. Possibilities to introduce pollution reducing technologies in manufacturing processes

3. Contribution to peaceful and inclusive societies by support of human rights

III. Increasing resource efficiency through yield optimization

4. Products provides solutions that are secure and reliable for customers and end-users

IV. Using recycled materials for packaging

5. Contribution peaceful and inclusive societies by zero tolerance of corruption

V. Engaged employees are loyal and perform better

Drivers of negative sustainability related impact

Potential & actual sustainability related risks

A. Production of semiconductors is energy intensive and GHG emissions contribute to global climate change

a. Acute physical risks related to extreme weather conditions

B. Potential pollution in upstream production due to raw material mining, smelting and manufacturing

b. Carbon pricing and limited availability of renewable energy in certain regions

C. Semiconductor manufacturing is water intensive and may cause depletion of resources

c. Temporary production limitations due to wastewater treatment

D. Potential negative impact on upstream operation due to mining

d. Reduced access to clean water can lead to production capacity constraints

E. Recycled material in semiconductors is rarely an option due to high purity requirements

e. Potential poor end-of-life waste handling of customer end-products

f. Potential risk of violations of human- and labor rights

2023

Environment

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

Climate Change

Pollution

Water and Marine Resources

Biodiversity and Ecosystems

Circular Economy

Climate Change

Commitment
Nordic Semiconductor is committed to reducing
greenhouse gas (GHG) emissions, aligned with the
Science Based Targets initiative (SBTi) to meet the Paris
Agreement's goal of limiting global warming to 1.5°C.

Targets/KPIs

60% by 2030 from a 2019 base year

Reduce absolute Scope 1+2 GHG emissions
Reduce Scope 3 GHG emissions 60% per USD

valued added by 2030 from a 2019 base year
(value added = sales revenue - the cost of
goods and services purchased from
external suppliers)

2050 from a 2019 base year

Reduce Scopes 1, 2 and 3 emissions 90% by
Reach net-zero GHG emissions across the

value chain by 2050 from a 2019 base year

Status
In 2023, Nordic continued to invest in renewable energy
for the offices. The Group set new, ambitious science-
based GHG emission targets, which are currently in SBTi
validation. Nordic also expanded the GHG inventory
to better align with GHG Protocol, covering all relevant
scope categories.

Achievement of targets set for 2023:

Impacts
Production of semiconductors is energy intensive,
and associated GHG emissions contribute to global
climate change. Climate change and reduction of
GHG emissions is the most significant environmental
aspect for the company and stakeholders. On the other
hand, IoT technology also has the potential to avoid
unnecessary GHG emissions downstream as Nordic
Semiconductor's products and IoT solutions can help on
the global climate challenges (see section "Strategy").

Reduce Scope 2
GHG emissions
by 50% compared
to 2022

Achieved

54%

Reduction

Risks

if GHG emissions are not reduced

Reputational and contractual risk with stakeholders
Acute physical risks related to extreme weather
Carbon pricing and limited availability of renewable

energy between geographical regions

conditions

Reduce GHG
emissions
generated from
air travel by 50%
compared to 2019,
compensated by
carbon offsets

Achieved

51%

Company internal
target. 51%
reduction, reported
outside of Scope 1-3

Opportunities
Resource efficiency and increased use of
renewable energy.

Strategy
Focus on GHG reduction and maintaining close
relationship with manufacturing suppliers relationship
with manufacturing suppliers.

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

Targets are
currently for SBTi
validation

Submitted

2023

Why it matters
Climate change is one of the greatest challenges
the world is currently facing, requiring society and
businesses to act on a global scale. Climate change
risks and compliance with environmental regulations
require sustainable solutions, including reducing energy
consumption and GHG emissions.

Semiconductor manufacturing is energy intensive, and in
the global operations Nordic recognize the impact and
risks of energy dependency and related GHG emissions
on climate change. As a fabless semiconductor
company, climate change represents a low risk for
Nordic's own operations, but manufacturing suppliers
are faced with challenges and risks from climate
change. These come both in the form of physical risks
(such as extreme weather conditions) or transitional
risks (such as legislative requirements), depending
on manufacturing location. Climate change-related
impacts, risks and opportunities are identified and
assessed through Nordic’s enterprise risk management
process. The TCFD disclosure in this report details more
about Nordic's climate-related risks and opportunities
for climate change mitigation and adaptation.

Nordic’s approach
Taking responsibility for the contribution to climate
change and global warming, Nordic is committed to
conducting business in a way that supports the goals
of the Paris Agreement to limit global warming to 1.5°C.
In 2023, Nordic defined and committed to targets set
in line with Science Based Target Initiative (SBTi). These
near- and long-term

targets are both ambitious and realistic for Nordic’s
industry. These targets replace Nordic’s previous annual
short-term Scope 3 target, which was abandoned to
focus more on long-term strategic actions. With these
SBTi targets, Nordic is committed to reducing Scope 1,
2 and 3 GHG emissions already by 2030 and meeting
the net-zero target by 2050. Due to expected organic
growth of the company and its production activities
with suppliers, Nordic assumes an increase in absolute
Scope 3 emissions near-term, while still reducing Scope
3 emission intensity within the SBTi target.

Since the SBTi's validation queue and related waiting
time have increased, validation of submitted targets was
not finalized within 2023. The validation process with
SBTi started formally in January 2024.

In 2023, Nordic continued to invest in renewable energy
for its offices, which will continue and increase in coming
years to align with SBTi targets.

In Nordic’s value chain, over 60% of GHG emissions are
generated by outsourced manufacturing. In 2023, Nordic
engaged directly with main manufacturing suppliers
to ascertain GHG emission reduction opportunities
in manufacturing operations. In parallel, Nordic
started to collaborate with one of the key customers
to identify actions to further develop manufacturing
supplier engagement and collectively achieve GHG
reduction targets. In 2024, Nordic will continue to tackle
production related GHG emissions in a collaborative
and open manner.

Nordic is currently working on a transition plan to reach
net-zero target by 2050, which will be reviewed and
approved by executive management. Qualitatively,
the most important actions in this transition plan
are engaging with Nordic’s suppliers to ensure their
transition to renewable energy and other emission
reduction initiative, for example, by reducing F-GHG. In
addition, Nordic's transition to renewable energy for all
offices and increased product efficiency will contribute
to the transition.

Target identifier

Scope

Year

Value

Unit

Year

Reduction Value

Unit

Baseline

Target

Absolute
value (tons
CO2e)

Target status

ST ABS1

ST INT1

NT ABS1

NT INT1

LT ABS1

Scope 2

Scope 3
(all categories)

Scope 1+2
(market based)

Scope 3
(all categories)

Scope 1+2+3

2022

2020

2019

407

193

717

638

tons CO2e

tons CO2e per
USD revenue

2023

tons CO2e

2030

50%

40%

60%

204

116

287

tons CO2e

204

Completed, achieved

tons CO2e per USD
revenue

62 845

Abandoned

tons CO2e

287

New, underway

tons CO2e
per USD value
added*

2030

60%

255

tons CO2e per USD value
added*

112 034

New, underway

73.372

tons CO2e

2050

90%

100%

7 337

tons CO2e

7 337

New, underway

Nordic's GHG emission targets.
*Value added calculated as: Value added = sales revenue - the cost of goods and services purchased from external suppliers
**Intensity target values shown as estimated absolute value in target year

GHG emissions performance
Nordic has monitored GHG emissions since 2011 and
reports annually to the Carbon Disclosure Project’s
(CDP) Climate Change questionnaire (www.cdp.net). The
CDP report details climate performance information,
including how climate change risks and opportunities
are managed, as well as GHG accounting results.

Nordic's approach for measuring GHG emissions
follows the Greenhouse Gas Protocol (ghgprotocol.org).
The Group report GHG emissions on all three scopes
of the GHG Protocol, as explained in the following
subchapters. For consolidation of the emissions in
the GHG inventory, Nordic have used the operational
control approach as outlined in the GHG Protocol. The
company accounts for 100% of the GHG emissions from
the Group and all its subsidiaries.

GHG emissions for period
2023-01-01 to 2023-12-31

Scope 1 GHG emission

Gross scope 1 GHG emissions (tCO2e)

Percentage of Scope 1 GHG emissions from regulated emission trading schemes (%)

Scope 2 GHG emission

Gross location-based Scope 2 GHG emissions (tCO2eq)

Gross market-based Scope 2 GHG emissions (tCO2eq)

Significant scope 3 GHG emissions

Total Gross indirect (Scope 3) GHG emissions (tCO2eq)

01. Purchased Goods and Services

02. Capital goods

03. Fuel- and energy-related activities (not included in scope 1 or scope 2)

04. Upstream transportation and distribution

05. Waste generated in operations

06. Business travel

07. Employee commuting

08. Upstream Leased Assets

09. Downstream transporation and distribution

10. Processing of sold products

11. Use of sold products

12. End-of-life treatment of sold products

13. Downstream leased assets

14. Franchises

15. Investments

Total GHG emissions

Total GHG emissions (location- based) (tCO2eq)

Total GHG emissions (market- based) (tCO2eq)

GHG inventory - each scope and category are explained in the following paragraphs

Retrospective

Milestones and target years

2019

2022

2023

% change
from 2022

2030

2050

Annual %
target /
Base year

0.7

—%

324

717

72 654

54 917

13 593

0.7

1 430

210

198

—

—%

1 258

407

90 329

71 889

12 996

1.1

908

392

289

—

—%

1 388

185

73 330

59 045

9 688

1.8

948

389

276

—

2 180

3 657

2 821

0.6

—

1.1

—

0.7

—

72 980

73 372

91 587

90 736

74 719

73 516

—%

10%

-54%

-19%

-18%

-25%

-17%

-51%

66%

-1%

-5%

16%

—%

-23%

-34%

—%

-18%

-19%

287

112 034

7 265

-5%

112 320

7 337

-5%

Total GHG emissions (market based)

GHG emissions intensity based on revenue

Year-on-year change in GHG emission intensity (%)

Nordic's GHG emission intensity by revenue

2019 (base
year)

73 372

254

—

2020

78 513

194

(24)%

2021

83 066

136

(30)%

2022

90 736

116

(15)%

2023

73 516

135

16%

Total energy consumption from non-renewable sources (MWh)

Total heating from non-renewable fuel sources (MWh)

Total District heating from non-renewable sources (MWh)

Total non-renewable energy for gas heating in office building (MWh)

Total electricity consumption from local grid mix (MWh)

Total electricity consumption from fossil sources (MWh)

Total electricity consumption from nuclear sources (MWh)

Consumption of self-generated non-renewable energy (MWh)

Total energy consumption from renewable sources (MWh)

Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources (MWh)

Sum of GOO purchase (MWh)

Sum of RGGO certificate purchase (MWh)

Sum of I-REC compensation (MWh)

Consumption of self-generated non-fuel renewable energy (MWh)

Total energy consumption related to own operations (MWh)

Percentage of energy consumption from nuclear sources in total energy consumption (%)

Percentage of fossil sources in total energy consumption (%)

Percentage of renewable sources in total energy consumption (%)

Energy consumption per revenue (MWh/MUSD)

Energy consumption overview for 2023

727

566

396

170

161

Unknown

5737

5694

4205

230

1259

6464

Unknown

0.89

11.91

From 2022 to 2023, the Group’s total GHG emissions
decreased 19%, while revenue decreased 30%. This has
lead to 16% increase in GHG intensity based on revenue
in 2023 compared to 2022.

Scope 1 emissions
Nordic's Scope 1 emissions include all direct emissions
from the Group and its operations. As a fabless
semiconductor company, GHG sources owned and
controlled by Nordic are very few. Scope 1 emissions are
minor and generated only in abnormal situations. In
2023, Nordic's Scope 1 emissions were zero.

Scope 2 emissions
Nordic's Scope 2 GHG emissions include indirect
emissions from purchased electricity and heating.
Emissions are calculated based on the electricity and
heating purchased for Nordic's facilities.. Emission
factors are derived from established sources such as
the Association of Issuing Bodies (AIB) or countries'
governmental pages, and where applicable, directly
from energy providers. Scope 2 emissions are calculated
using location-based and market-based methods.

Compared to the 2022 baseline, in 2023, Nordic’s
market-based Scope 2 GHG emissions decreased
by 54%. This reduction was achieved by purchasing
renewable energy for the Group’s offices, verified by
Guarantees of Origin (GOO), International Renewable
Energy Certificates (I-RECs), Taiwan Renewable Energy
Certificate (T-RECs) and Renewable Gas Guarantees of
Origin certificates (RGGO).

In 2023, 89% of total purchased energy for Nordic’s own
operations originated from renewable energy sources.
Energy usage across the Group’s offices increased
16% in 2023 compared to 2022. This was mainly due to
company growth, but also because Nordic expanded
the GHG inventory to include offices with fewer than
10 employees (previously excluded). In addition to the
energy purchased from electricity providers, Nordic's
head office in Trondheim has solar panels onsite, which
generate 43 MWh renewable electricity in 2023.

Today, more than 50% of Nordic’s employees work in
office buildings which have green building certification,
like BREEAM and LEED. These certificates focus on
sustainable design and operation of the building,
considering various aspects like reduction of energy,
water and waste.

Scope 2 market-based GHG emissions by country and FTE

Scope 3 emissions
Scope 3 GHG emissions cover any other indirect
emissions from the activities of the Group. In 2023,
Nordic expanded the Scope 3 GHG inventory to cover
all relevant Scope 3 categories and better align with
GHG Protocol.

Nordic's main scope 3 categories, by % of total Scope 3 emissions in
2023.

The following section outlines all Scope 3 categories.
The calculation method and information sources
for each are described. For non-relevant Scope 3
categories, an explanation is provided.

Category 1: Purchased goods and services
This category includes emissions both from the
production of Nordic Semiconductor products by
outsourced manufacturing suppliers and non-
production-related procurement related to company
operations in the reporting year.

Emissions from the Group’s outsourced production is
calculated according to a "hybrid method" (as defined
by GHG Protocol), using supplier-specific emission
factors allocated for Nordic products by manufacturing
suppliers, and own production records.

For other purchased goods and services, Nordic utilizes
a "spend-based" calculation method (as defined by
GHG Protocol) with emission factors from publicly
available databases (Defra, BEIS, EPA, Climatiq).

Purchased goods and services are the largest portion
of Nordic's GHG emissions. In 2023, this category
represented 80% of the total GHG emissions of
the company, while manufacturing processes alone
were approximately 65% of all of the company's
GHG emissions.

Category 2: Capital goods
Emissions from capital goods are related to investments
in office and lab equipment, machinery and also
certain software procurement in the reporting year.
The investments are specified as additions in Note
12: Goodwill and intangible assets and Note 13: Fixed
assets. For calculating the emissions related to Capital
Goods, Nordic uses an "average-spend-based' method
(as defined by GHG Protocol) by collecting data on the
economic value of goods purchased and multiplying it
by relevant secondary emission factors. Emission factors
are retrieved from public databases, including Defra,
BEIS, EPA and Climatiq.

Emissions related to capital goods represent a
substantial part of Nordic's total GHG inventory (13% of
total GHG inventory in 2023).

Category 3: Fuel- and energy-related activities
This category includes upstream emissions of fuel and
energy generation, as well as energy transmission and
distribution (T&D) losses. Emissions from fuel- and
energy-related activities are determined using an
'average data' method (as defined by GHG Protocol).
Nordic use Well-To-Tank (WTT) emission factors for
purchased fuel, electricity and heat, and T&D factors for
the purchased electricity and heat provided by Defra.

The purchased energy from renewable sources,
including GOO, I-REC and RGGO, is compensated in
the calculations. This category represents a very small
part of Nordic's GHG inventory (less than 1% for 2023).

Category 4: Upstream transportation and distribution
Upstream transportation and distribution includes
emissions related to transport of semi-finished goods
from wafer foundries to assembly sites by third-party
transportation companies. Activity data is provided
on an annual basis by transportation companies, who
report the weight, distance and transportation mode
for shipments. Emissions are calculated according to a
"distance-based method" (as defined by GHG Protocol),
utilizing emission factors provided by Defra.

This category represents a very small part of Nordic's
GHG inventory (less than 0.1% for 2023).

Category 5: Waste generated in operations
Emissions from third-party disposal and treatment of
waste generated in Nordic’s operations are calculated
using waste information from the major offices. These
offices provide trusted and quantified data. This data
is extrapolated to cover the remaining sites. Emissions
are calculated using an 'average-data' method (as
defined by GHG Protocol) and suitable emission factors
from the Qlimatic database, based on different waste
treatment methods.

The resulting estimate for emissions from this category
represents a very small part of Nordic's GHG inventory
(less than 0.1% for 2023), and is not considered relevant
due to its small volume.

Category 6. Business travel
Emissions are reported for business air travel, which has
the biggest impact out of all business travel modes.
Nordic is aware that there are additional contributions
to this category that are not currently included. The
Group will focus in the coming year to complete
calculation of emissions from all types of business travel.

The calculation method for this category is distance-
based, utilizing air travel distance and travel class-
based data provided by travel companies for the
reporting year. These are calculated with Defra emission
factors for business travel.

Even covering the most substantial emissions related
to air travel, this category represents a relatively small
fraction of Nordic's total GHG inventory (1.3% in 2023).
However, Nordic expect to see an increase in this
category going forward as a result of company growth.

Category 7. Employee commuting
For employee commuting, Nordic have included travel
between home and work and partial work from home.
There is no detailed data available on transportation
modes used for daily commuting, how often employees
commute to work, and distance traveled daily. Therefore,
emissions from employee commuting are based on
estimates. The GHG Protocol's "average-data" method is
used for estimating the emissions, and emission factors
are obtained from Defra.

Emissions are calculated using an "average-data"
calculation method (as defined by GHG Protocol) and
emission factors from Qlimatic's database. This category
represents a very small part of Nordic's GHG inventory
(less than 1% for 2023).

Category 9. Downstream transportation and distribution
Emissions in this category are related to
transportation and distribution of Nordic products
to and from customers, handled by third-party
transportation companies.

Emissions are calculated by a "supplier-specific" method
(as defined by GHG Protocol), based on annual carbon
footprint reports from freight companies. This category
represents a very small part of Nordic's GHG inventory
(less than 0.1% for 2023).

Category 10. Processing of sold products
Emissions from this category are not presently included
in the Group’s GHG inventory. Nordic products are
electronic components that are assembled into end
products by the customers, each with major differences
in end products. These differences could be design,
additional components and materials, programming,
and testing, as well as production processes (like
production line size and efficiency, production location,
or energy usage).

Since Nordic does not have insight into these
parameters in customers' production processes,
in addition to a lack of available industry data or
models for estimating emissions from such processes,
Nordic have no reasonable means of estimating
these emissions.

This category represents a very small part of Nordic's
GHG inventory (less than 1% for 2023).

Category 8. Upstream leased assets
This category includes emissions from the operation
of the assets Nordic has leased in the reporting year,
excluding office facilities that are already assessed and
included in Scope 2 inventory.

Category 11. Use of sold products
This category includes total expected lifetime emissions
from use of Nordic products incorporated in customers’
end products. Emissions are accounted based on the
number of Nordic products produced per year and
power consumption during the product's lifetime,
assuming the customer end product will be 100%
powered on during an expected lifetime of 5 years.

The calculations are based on the "direct use-phase
emissions" method (as defined by GHG Protocol) and
global emission factors obtained from IEA. This Scope
3 category represents a significant part of Nordic's
GHG inventory (almost 4% in 2023). It is part of the
company target to reduce power consumption in new
products, leading to lower emissions from customers'
end products.

Category 12. End-of-life treatment of sold products
Data in this category include total expected end-of-life
emissions from the Nordic products sold annually, based
on the assumption that all Nordic products sold are
eventually delivered for recycling. Nordic does not have
visibility on consumers' waste disposal behavior. Nordic
has estimated the emission based on the assumption
that equal parts of the units produced will be recycled,
incinerated or end up in landfill. Emissions are
calculated according to a "waste-type-specific" method
(as defined by GHG Protocol), applying WEEE emission
factors from the Climatiq database.

The resulting estimate for emissions from this category
represents a very small part of Nordic's GHG Inventory
(less than 0.1% for 2023), and is not considered relevant
due to its small volume.

Category 13. Downstream leased assets
This category is not applicable. Nordic does not have
any downstream leased assets, or own any assets (e.g.
factories, vehicles, office spaces) leased to other entities.
Hence there is no relevant emissions for this category.

Category 14. Franchises
This category is not applicable. Nordic does not have
franchise operations.

Category 15. Investments
This category is not applicable. Nordic is not an
investor company.

Carbon offset
For 2023, the Group set a short-term internal target to
reduce air travel GHG emissions by 50% compared to
2019, by limiting air travelling and/or carbon offsetting.
To meet the internal target, Nordic purchased 250 tons
of carbon credits from the Rimba Raya project. This
is a biodiversity reserve project that achieves GHG
emissions reduction through preventing deforestation
and conversion of forests to palm oil plantations on
the island of Borneo in Indonesia. The Rimba Raya
project is validated against verified carbon standard
(VCS). As carbon credits cannot be used as a reduction
mechanism for Scope 3 GHG emissions or progress
towards science-based GHG emissions reduction
targets, the Group report carbon credits outside of
Scopes 1-3. Nordic do not expect significant carbon
credit purchases in the coming years, as these cannot
be used to report emission reductions according to
the SBTi.

Climate change acknowledgement highlights
In 2023, Nordic continued to receive acknowledgment
for the work and progress on climate change mitigation.
The company was awarded an A- for its response
to the annual Carbon Disclosure Project's climate
change module.

Nordic was also listed among 500 companies in
Europe's Climate Leaders 2023, compiled by Financial
Times, where companies are scored based on indicators
of commitment to reduce GHG emissions and
collaboration with CDP and the SBTi.

Priorities going forward
Nordic will continue to invest in renewable energy for
the offices on the path towards SBTi targets set for
2030 and net-zero SBTi target by 2050. Simultaneously,
engagement and collaboration with Nordic’s
manufacturing suppliers will be continued, to contribute
to production related GHG emission reductions.

TCFD disclosure
Nordic has established a systematic approach to
identifying climate risks, including potential future costs
and new opportunities. The Group’s climate risk and
GHG emissions management follow the Task Force on
Climate-Related Financial Disclosures (TCFD) framework.
For more information, see TCFD Index.

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, standards, and frameworks such as Corporate Sustainability Directive (CSRD) and EU
Taxonomy, and carbon taxes/carbon fee in manufacturing locations. These risks are identified and
assessed and risk mitigating activities defined through Nordic's enterprise risk management process.
The Group's strategy is to partner with leading manufacturing suppliers and ensure that they comply
with current and future development trends such as carbon pricing. The risk management also
evaluates risks from climate-related contractual requirements from customers.

Through low-power Internet of Things (IoT) designs, Nordic has a competitive advantage in
contributing to solutions for energy efficiency and energy management. These present 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 IoT solutions, such as smart lighting and energy
harvesting. By contributing to sustainable solutions and improving the resource efficiency of our
customers’ end devices, Nordic upholds its commitment to addressing climate challenges.

Technology l Energy source →

As a fabless company with outsourced production, the ability to adapt, invest, and support new
energy saving/carbon reduction technologies lies with our manufacturing suppliers. Nordic's business
model is not impacted by 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
our European offices, most of the energy comes from renewable sources. Over 50% of our employees
work in energy-efficient buildings that have green-building certifications like BREEAM and LEED.
Outsourced manufacturing partners are focused on implementing new energy-saving measures to
increase energy efficiency and use of renewable energy in the production process.

Market l Market ↗

Semiconductor manufacturing consumes a significant amount of energy. The markets indicate
increased cost of energy alongside growing demand for products with a low carbon footprint. Nordic
has taken action to lower its carbon footprint by using renewable energy verified by Guarantees
of Origin (GOO), International Renewable Energy Certificates (I-RECs), Taiwan Renewable Energy
Certificate (T-RECs) and Renewable Gas Guarantees of Origin certificates (RGGO). In 2023, Nordic
set new, ambitious science-based GHG emission targets, which are currently in Science Based Targets
initiative (SBTi) validation. As part Nordic's long-term strategy and to minimize the risk of losing
market share, the SBTi targets aim to achieve net-zero emissions by 2050.

Reputation l

Taking environmental and climate change effects into account is crucial for our brand recognition.
Poor performance or increased concern/negative feedback regarding climate change and GHG
emissions could harm our brand value and lead to loss of customers due to changing in preferences
towards climate change. Nordic's strategy involves engaging and 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 and energy harvesting) 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, especially
those located in Southeast Asia, where tropical cyclones and floods have the potential to damage
production facilities and infrastructure. Such events are likely to impact suppliers' production capacity
and our delivery capability in the short-to-medium term, and potentially have a negative effect on
Nordic's revenue.

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

Nordic has established a short to medium-term strategy for reducing the risk of supply disruptions
caused by natural disasters. These are addressed in our enterprise risk assessment and business
continuity plans. In the short term, we maintain a reserve of wafers and finished products to operate
under extreme weather conditions and address any temporary shortage. For medium-term risk
mitigation, Nordic uses a second-sourcing strategy to protect against widespread supply disruptions.
For long-term risk mitigation, our key manufacturing partners have their own business continuity plans
to reduce such chronic risks.

Long-term changes and extreme variability in climate patterns, as well as events like droughts
and floods, can potentially impact accessibility to clean water and affect Nordic Semiconductor’s
manufacturing suppliers and their production capacity. Such events potentially impact our ability
to deliver products to our customers and lead to reduced/delayed revenue. We have already
experienced incidents of water rationing within some of the countries in which our manufacturing
suppliers operate.

2023

Pollution

Commitment
Nordic Semiconductor is committed to promoting
environmental responsibility, minimizing pollution and
restricting use of pollutants in products

Targets
Initiate re-qualification of products to ensure PFAS-free
material in Nordic's product portfolio.

Impact
Semiconductor production is known to affect pollution.
Potential pollution of air, soil and water can occur in
upstream operations due to raw material mining,
smelting and semiconductor manufacturing. Use of
fossil fuel in the value chain causes air pollution.

Risks
Temporary production capacity limitations due to
failures in supplier wastewater treatment. Failure to
meet regulatory/customer requirement framework
related to substances of (very high) concern may
negatively affect the market access and customers'
interest in the products.

Opportunities
Possibilities to introduce new pollution reduction
technologies in manufacturing processes.

Strategy
Focus on pollution prevention in line with Nordic's
environmental management policy.

In accordance with Nordic's environmental policy,
the Group is committed to conduct business in a
way that supports environmental protection and
pollution minimization.

Why it matters
Nordic Semiconductor uses small amounts of chemicals
in the laboratories, but does not generate any
significant pollutants that could affect pollution of air,
water or soil. To ensure minimum exposure to chemicals
and prevent accidental chemical releases, Nordic has
implemented control measures at the laboratories,
such as training personnel, fume ventilation, providing
personal protective equipment (gloves, goggles)
and using clearly marked chemical storage and
waste containers.

Pollution of soil is prevented by proper waste handling.
See more on Waste Management in the section on
Circular Economy.

Nordic’s approach
While pollution represents a low risk for Nordic's
operations, there can be pollution-related risks in
the supply chain from raw material mining/smelting,
product manufacturing, and transportation. Nordic's
main suppliers have ongoing programs to prevent and
control pollution both to air and water.

Nordic Semiconductor products are subject to several
global environmental legislation and regulations,
industry standards, and customer requirements
restricting substances considered hazardous to
environment. To meet Nordic standards for hazardous
substance use and pollution prevention, manufacturing
suppliers must provide and adhere to a signed
declaration of compliance for the requirements
stated in the Hazardous Substances Specification for
Suppliers. This specification includes requirements for
pollutants, such as ozone-depleting substances and
substances of very high concern. To ensure Nordic
products are compliant with the requirements stated in
the specification, product content is verified by third-
party testing.

Nordic has controls for design and production processes
to ensure compliance to environmental requirements,
including RoHS, REACH, EU Persistent Organic Pollutants
(POP) regulation, California Proposition 65 and
Halogen-Free according to IEC 61249-2-21. Certificates
for Hazardous Substances testing and Material
Composition reports for all products are available on
the company website (https://docs.nordicsemi.com/).

A number of Per- and polyfluoroalkyl substances (PFAS)
are on the REACH Candidate List of substances of very
high concern (SVHC). PFAS are currently used in Nordic
products delivered as CSP packages, where the PFAS
concentration is less than 1% of the product weight
which is in compliance with REACH. Nordic has an
ongoing program for re-qualifying existing CSP products
to provide PFAS-free material for the current and future
product portfolio.

Substances

Main hazard classes of
substances of concern

Total weight
included in
products 2023 (g)

Substances of
Concern

PFAS*

Substances of Very
High Concern

Boron oxide

Lead oxide**

N-methyl-2-
pyrrolidone (NMP)

Total weigth

Repr. 1B

Repr. 1A
Acute Tox. 4
STOT RE 2
Aquatic Acute 1
Aquatic Chronic 1

Repr. 1B
STOT SE 3
Skin Irrit. 2
Eye Irrit. 2

20 755.44

266.50

261.79

0.66

4.05

21 021.94

Summary of substances of concern and SVHCs in Nordics IC
products 2023.

*The total weight of PFAS is a maximum amount, conservatively
estimated due to third party trade secrets.

**Hazard classification for lead compounds not classified elsewhere in
CLP regulation

202301020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendicesOur groupFinancial Risk managementSustainability statementEnvironmentSocialGovernanceOutlookEU TaxonomyConcluding remarksDue to various substances used in semiconductor
manufacturing processes, certain Nordic products
contain small amounts of substances of very high
concern (SVHC). In 2023, the total amount of SVHC used
in Nordic products was 266.50 g, including N-methyl-
2-pyrrolidone (NMP) (4.05 g), Boron oxide (261.79 g)
and Lead oxide (0.66 g). In addition, Nordic products
may contain traces of other substances of concern/
substances of very high concern (SVHC). However, the
content of such traces is not currently measured by
Nordic, as the content in products is below minimum
detection levels. In the total value chain, there might be
use of and emission of Substances of concern or Very
High Concern that Nordic does not have insight to.

Nordic Semiconductor and its manufacturing suppliers
are not dependent on microplastics.

Priorities going forward
In 2024 Nordic Semiconductor will continue to replace
PFAS-content in the products, and re-qualify the
changed products to ensure PFAS-free material in
Nordic's product portfolio.

2023

Commitment
Nordic Semiconductor is committed to protecting the
natural environment and using water sustainably.

Targets
Nordic have not set any specific targets for
water topics.

Impact
The semiconductor manufacturing process is water
intensive, which may cause depletion of water resources.

Risks
Reduced access to clean water can lead to production
capacity constraints, which may negatively impact
Nordic financially.

Strategy
Promote sustainable water use. Secure business
continuity by maintaining buffer stock to secure
temporary production disruptions, with second-sourcing
to address prolonged production disruptions.

Water and marine resources

Why it matters
Water is becoming an increasingly scarce and valuable
resource globally. Most of Nordic's main offices
are located in low-water-risk areas, and the direct
operations with design and development are not highly
dependent on water as a resource. Nordic’s direct
impact on water sources and marine environments is
also insignificant. All water used in Nordic’s operations
is supplied by municipalities. Water consumption is only
associated with normal household water for washing,
drinking and sanitary use.

Nordic’s approach
Since the Group’s operations do not generate water
pollutants associated with activities that could have
adverse impact on water ecosystems or human health,
the company's risks related to water are limited.
All discharged water is directed to municipal waste
water treatment plants. In 2023, Nordic’s total water
consumption in own operations was 13,802 m3. Of
this, approximately 4-5% is consumed in water high-
risk areas.

Direct operations

Total water consumption

Volume (m3)

13802

for Nordic’s manufacturing suppliers, especially in
areas where droughts, floods and water rationing can
impact suppliers' production capacity. Such events
could negatively impact Nordic's financial performance
through reduced production and delay of revenue.
Access to sufficient clean water is addressed in the
enterprise risk assessment and business continuity
plans. Nordic is in close communication with suppliers
to ensure water-related risks and counter-measures
are sufficiently addressed in their respective business
continuity plans.

In 2023, the water consumption in outsourced
manufacturing was 207,379 m3. Of this, approximately
26% is consumed in water high-risk areas, specifically in
China and Philippines.

Indirect operations

Total water consumption

Total water consumption in areas at water risk,
including areas of high-water stress

Total water recycled and reused

Total water stored

Changes in water storage

Volume (m3)

207379

54642

Total water consumption in areas at water risk,
including areas of high-water stress

Total water recycled and reused

Total water stored

Changes in water storage

573

Total water consumption represents the consumed
water related to Nordic Semiconductor products in 2023
reported by the outsourced manufacturing partners.
Water risk areas have been evaluated using the
Aqueduct Water Risk Atlas from the World Resources
Institute (https://www.wri.org/aqueduct).

Total water consumption represents the consumed water
in all Nordic offices in 2023. The consumption volume
is an estimate based on the water consumption data
collected from Nordic offices, covering 50% of all Nordic
office sites and 90% of Nordic office area. These data
are then extrapolated to represent water consumption in
all Nordic offices.

In semiconductor manufacturing, access to clean water
has a critical role. There is a risk that climate change
and related weather events could impact accessibility

Total water consumption, combining both direct and
indirect operations, average to 0.36 liter per unit of
production in 2023. Water consumption per revenue in
the same year averages to 0.41 liter per USD revenue.

Nordic Semiconductor has not yet set quantitative
targets for water consumption reduction. Nordic’s main
focus has been on suppliers' continuity plans, reporting
capabilities, and ensuring wastewater treatment in the
production operations.

2023

Priorities going forward
Nordic Semiconductor will continue to monitor water
consumption in own operations and supply chain. The
Group aims is to ensure that suppliers have adequate
water treatment, recycling and contingency measures.

Biodiversity and
Ecosystems

Commitment
Nordic Semiconductor is committed to conserving
and sustainably using natural resources to
support biodiversity.

Targets
Nordic is in an initial phase of reporting biodiversity
and do not yet have any specific targets set for
this topic.

Impact
Potential negative impact on upstream operations due
to mining and product manufacturing operations.
Potential positive impacts downstream by use of Nordic
Semiconductor’s products and IoT solutions.

Risks
Currently, Nordic do not have a clear understanding of
the biodiversity threats in the upstream supply chain.

Strategy
Continuously improve understanding of Nordic impact
on biodiversity.

Why it matters
Biodiversity plays a vital role in sustaining the planet
and is considered material for each individual and
company. Nordic recognizes that preserving and
maintaining healthy ecosystems and the natural
environment is a prerequisite for a sustainable future.

Exploitation of natural resources is a significant driver of
biodiversity loss that also contributes to climate change.

Nordic’s approach
As a fabless company, Nordic's operations does not
have direct impact, dependencies or risks related to
biodiversity and ecosystems. The company does not
directly contribute to land-use change, freshwater/
sea-use change, or spread of invasive alien species.
The number of sites owned, leased or managed in or
near protected areas or key biodiversity areas that are
negatively affected by Nordic operations is 0. Similarly,
the area of sites owned, leased or managed in or
near protected areas or key biodiversity areas that
undertaking is negatively affecting is 0 m2. All Nordic
offices are located in ready-built areas where the impact
on biodiversity is considered low. In the Group’s direct
operations, renewable energy is preferred, and water
consumption is limited to overhead water usage from
municipal sources.

However, it is clear that the electronics industry can
have an impact on biodiversity. The production of
semiconductors requires various metals, minerals,
chemicals, water, and energy. For Nordic products,
potential negative impact on biodiversity lies within the
upstream operations, where GHG emissions and water
usage are the biggest contributors. With increased
demand for semiconductor devices globally during
the last few years, several companies are planning
construction of semiconductor factories around the
world, some of which Nordic might purchase from in the
future. Building new factories and related infrastructure
can have a negative impact on local ecosystems.
Currently, Nordic's manufacturing partners consist only

of existing/legacy factories, but with developments
in technology and future opportunities, biodiversity
perspectives are increasingly important for Nordic.

To better understand the impact on biodiversity,
Nordic has begun to assess this further in the multi-tier
upstream supply chain, including wafer production, and
assembly of final products. With increased knowledge
and understanding of these concepts within the value
chain, Nordic should, where relevant, formulate policies,
targets, and programs to address significant risks and
opportunities for biodiversity.

As mentioned in the section "Climate Change", in 2023
Nordic invested in a biodiversity reserve project called
Rimba Raya by procuring 250 tons of carbon credits
(an investment of approximately 2,875 USD) from this
project to reach a company internal target for air
travel GHG emission reduction. Rimba Raya project
focuses in protecting tropical peat swamp forests in the
Central Kalimantan province on the island of Borneo in
Indonesia, avoiding planned deforestation for palm oil
production. Through its conservation and reforestation
activities to sustain the area’s unique ecosystem, the
project preserves the habitat of endangered species as
well as reduces GHG emissions. Investing in this project
will enable Nordic to contribute to the preservation of
one of the most endangered ecosystems in the world.

Priorities going forward
Nordic Semiconductor will continue to improve
understanding of the impact on biodiversity in the
upstream supply chain. This will be an important step
in developing the Group’s work in this area and further
address biodiversity-related risks and opportunities.

Circular economy

Commitment
Promote and enable circular economy in Nordic’s
operations, product design, and manufacturing.

Targets
90% of device containers use recycled plastic.

Status
Achievement of targets set for 2023:

40% of device
containers
use recycled
plastic.

40%

Achieved

Impact
Production of microchips requires metals and materials
of high purity, hence recycled material in microchips is
rarely an option. Nordic's firmware upgrades are
expected to extend the lifetime of Nordic products.

Risks
Poor end-of-life waste handling of customer end
products with Nordic chips inside.

Opportunities
Increasing resource efficiency through yield
optimization. Using recycled materials for packaging.

Strategy
Circular economy integrated into daily
business operations.

Why it matters
Circular economy is an important means to achieving
resource and waste reduction. Nordic recognizes the
increased importance of circularity for the company's
business and seeks to promote circular practices that
minimize resource use and waste by avoiding hazardous
substances, conserving natural resources and raw
materials, and preferring recycled and recyclable
materials in the products and products packaging.

Nordic’s approach
Circular economy in product design
Critical raw materials for integrated circuits, include
crystalline silicon and metals. The majority of the metals
used are common materials, tin, copper and aluminum,
while there’s also some precious metals, for example
silver and palladium. There are no rare-earth minerals
used or contained in Nordic’s products. Nordic considers
opportunities to reduce the resource usage during its
product design processes. By replacing gold with copper
in almost all products, Nordic has reduced products'
environmental impact and costs, while preserving
product quality and performance.

The materials in Nordic products need to be of a high
purity to allow for technology nodes at nanometer
scales, and hence recycled material are not suitable
for use in the products. However, the metals used in
the components are recyclable and can be re-used
if properly treated. Nordic’s suppliers have their own
processes for waste handling and recycling from in-line
or warehouse scrap.

Nordic’s products are designed with durability in
mind, expecting a long lifetime in its end application.
This is verified by rigorous qualification and reliability
testing based on well acknowledged standards used
in the electronics industry (such as JEDEC). Nordic
products also have the ability to perform firmware
upgrades over the air, which is expected to increase the
lifetime of the product in the field – without the need
for remanufacturing.

Product casing and kits packaging
Nordic’s circular product design covers more than
integrated circuits. In 2022, Nordic launched the
Thingy:53, the first development platform with casing
made from recyclable plastic instead of rubber.
Moreover, all kit packaging has been made of Forest
Stewardship Council (FSC) certified recyclable cardboard
since 2020.

Product packing
Since 2021, Nordic has been working with product
assembly suppliers within plastic reduction program
to gradually shift to device containers (reels and trays)
made of recycled plastic. In 2022, the first reels made
of recycled plastic were qualified and introduced for
QFN devices by one of the Group’s assembly suppliers.
Nordic continued this work in 2023 by expanding
the program to another assembly supplier and
incorporating CSP devices. From 2022 to 2023, the share
of device containers made of recycled plastic increased
from 10% to 40%. In 2023, the total weight of plastic
used for containers was 45,377 kg, of which 14,902 kg
(33%) was recycled plastic.

Plastics weight in device containers

Priorities going forward
Nordic Semiconductor will continue to implement and
use recycled plastic material for devices packed by
reels. Nordic will also ensure recycled and/or recyclable
packaging material for new product offerings.

Nordic’s plastic reduction program target for 2024 (90%
of device containers use recycled plastic) was defined
in 2022. This target has proved to be not realistic, and
Nordic does not expect to meet this by 2024. Devices
packed by reels are already transitioned to recycled
plastic material for almost all products. Remaining
are the use of trays for packing and distribution, and
the industry’s transition away from this container type
is slower than Nordic expected. Nordic will continue
to investigate the options for trays made of recycled
plastic, which at the same time can meet qualification
requirements from industry standards like JEDEC.

Hazardous substances
Nordic Semiconductor products are subject to several
global environmental legislation and regulations,
industry standards and customer requirements restricting
substances considered hazardous to environment. For
environmental compliance, the managerial responsibility
lies with the Group’s Quality SVP. The supply chain
manages hazardous substance compliance and is
responsible for assuring that Nordic products follow
defined environmental requirements and specifications
in close collaboration with manufacturing suppliers.

From the beginning of product design, Nordic ensures
restricted hazardous substances are not selected.
Nordic has close communication and cooperation
with manufacturing suppliers and regularly address
environmental product compliance and hazardous
substance use with them. Nordic communicate
standards for restricted substances through the
Hazardous Substances Specification for Suppliers.
Nordic requires manufacturing suppliers to provide a
signed confirmation of compliance for each revision of
the specification.

Certificates for Hazardous Substances testing and
Material Composition reports for all products are
available on the company website (https://docs.
nordicsemi.com/).

Waste management
Reducing and managing waste are important factors
in increasing circularity. In the operations, Nordic strive
to avoid and minimize waste and its impact on the
environment. The Group prefer recycled and recyclable
materials where feasible. Nordic have implemented
waste management guidelines across the operations
and have routines in place for sorting and disposing of
different types of waste, including but not limited to, EE
waste, hazardous waste, plastic, and packing material.
All waste generated in Nordic operations is delivered
to certified waste processing companies who sort and
recycle waste in accordance with local regulations.

For calculating the waste data, Nordic uses the waste
information from major offices, where there is trustable
and quantified data received from landlords. These data
are extrapolated to cover the remaining sites. In 2023,
the total amount of waste generated in own operations
was 83.4 tonnes.

Total waste generated in Nordic operations (tonnes)

Hazardous waste (tonnes)

Batteries (tonnes)

Chemicals (tonnes)

EE waste (tonnes)

Non-hazardous waste (tonnes)

Sorted (plastic, glass, metal, paper) (tonnes)

Unsorted (tonnes)

83.4

1.42

0.04

1.34

81.9

42.04

39.89

Since Nordic’s products are manufactured by outsourced
suppliers, good waste management practices at
suppliers' sites are crucial to minimize waste and
mitigate potential waste-related risks. Nordic qualify
all manufacturing suppliers and require them to be
ISO 14001 certified. Nordic continuously work with
manufacturing suppliers to improve yield and minimize
scrap, and ensure the waste generated at suppliers'
sites is sorted and recycled in accordance with
local regulations.

Social

Nordic Semiconductor is an evolving business with
employees, offices, customers, and suppliers in several
different parts of the world. Nordic is focused on diversity,
equity, and inclusion throughout the entire employee
journey, which is imperative to attract and retain highly
skilled personnel in the competitive landscape. Equally
important is the Group's ambition to foster a healthy, safe,
and motivating work environment, to amplify engagement
and contribution, and to avoid human and labor
rights violations.

Own Workforce

Workers in the Value Chain

Consumer and End Users

2023

Own Workforce

Commitment
Nordic is committed to being a place where employees
to join, thrive and stay.

Targets
Maintain a healthy work environment, with above
tech benchmark score on Employee Engagement, and
Diversity, Equity & Inclusion and Health & Well-being.

KPI
Work related incidents = 0, Short time sick leave < 2,5%,
Employee satisfaction objectives: Health and well-being,
Mental well-being, Organizational support, Social
well-being.

Status
DE&I framework has been developed and anchored
with executive management for implementation in 2024.

Impacts
Nordic’s workforce innovates and develops the future of
connectivity products and impacts product development,
time to market, sales and ultimately financial results.

Risks
Nordic need to retain and attract specialized
capabilities and competences in a highly competitive
and global market.

Opportunity
Engaged employees are more likely to be loyal to
Nordic, perform better and also help attract and retain
other colleagues.

Strategy
Fostering an engaged, diverse workforce to be
competitive, by continuously developing Nordic’s
employee value proposition and company culture
across borders.

Why it matters
Nordic value creation is primarily in chip design. This
phase is highly dependent on a skilled workforce
making smart solutions that can be utilized by a
variety of customers in a variety of applications. Hence,
the skilled workforce is Nordic’s most valuable asset.
Developing, utilizing and retaining this workforce is
therefore important as this is how Nordic builds solutions
to continue the growth journey.

Nordic’s approach
Fostering a company culture that encourages employees
to join, thrive and remain with us, all while supporting
a healthy and sustainable lifestyle, is challenging.
Furthermore, Nordic also strives to create a culture
characterized by diversity and inclusiveness, ensuring
that everyone has equal opportunities. Nordic’s
commitment to shaping this culture encompasses
numerous focus areas, each with its own set of
initiatives. Consequently, Nordic methodically
categorizes these efforts into two broad themes:
workforce composition and employment terms, and
diversity, equity, and inclusion. Under these two themes
there is a variety of initiatives aimed at enhancing
specific aspects Nordic aims to improve. The main
initiatives are detailed in the subsequent section.

202301020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendicesOur groupFinancial Risk managementSustainability statementEnvironmentSocialGovernanceOutlookEU TaxonomyConcluding remarksWorkforce composition and employment terms
Workforce composition
By year-end 2023, Nordic had 1,493 employees, of which 1,460 were permanent full-
time employees (FTE is defined according to local legislation on working hours). The
female share of employees was 17.1%, a slight improvement from 16.3% in 2022. Nordic
has 264 leaders, with a gender split of 16% female and 84% male leaders, which is an
improvement from 2022, when the split was 14% vs 86%.

Workforce composition*

2023

2022

Employees by department & gender distribution

Executive Management Team

Female

Male

Business support**

Female

Male

Research and development

Female

Male

Sales

Female

Male

Supply chain

Female

Male

Total

Number of
employees

% of total
employees

Number of
employees

% of total
employees

121

1 139

137

1 002

135

106

1 493

0.7%

0.1%

0.5%

8.1%

3.3%

4.8%

76.3%

9.2%

67.1%

9.0%

1.9%

7.1%

5.9%

2.7%

3.2%

148

1 083

117

966

107

1 435

0.7%

0.1%

0.6%

10.3%

4.8%

5.5%

75.5%

8.2%

67.3%

7.5%

0.6%

6.8%

6.1%

2.6%

3.5%

*Due to privacy concerns and the low number of individuals in additional gender categories, this information is not disclosed.

**The term business support includes: IT, Marketing, Finance, Legal and Compliance, People and Communication, Product Management and
Quality.

2023

Workforce composition*

2023

2022

Employees by region & gender distribution

Number of
employees

% of total
employees

Number of
employees

% of total
employees

Norway

Female

Male

Finland

Female

Male

Poland

Female

Male

Female

Male

Taiwan

Female

Male

USA

Female

Male

Philippines

Female

Male

Rest of world

Female

Male

Total

623

127

496

318

297

113

106

179

152

1 493

41.7%

8.5%

33.2%

21.3%

1.4%

19.9%

7.6%

0.5%

7.1%

5.2%

0.9%

4.2%

3.8%

0.9%

2.8%

4.8%

0.6%

4.2%

3.7%

2.4%

1.3%

12.0%

1.8%

10.2%

612

116

496

322

298

115

107

153

128

1 435

42.6%

8.1%

34.6%

22.4%

1.7%

20.8%

8.0%

0.6%

7.5%

5.4%

0.8%

4.5%

4.0%

0.9%

3.1%

3.8%

0.6%

3.2%

2.7%

1.7%

1.1%

10.2%

1.7%

8.6%

*Due to privacy concerns and the low number of individuals in additional gender categories, this information is not disclosed.

Leaders
During 2023, the Executive Management Team consisted
of two women and eight men (20% vs. 80%). By year
end 2023, the Board of Directors consisted of three
female and two male shareholder-elected members,
in addition to one female and two male employee-
elected members. From February 2024, the shareholder-
elected composition changed to three female and four
male members.

Nordic promoted or hired 62 people into leadership
positions in 2023, out of 12 external with a gender split
of 5 female vs. 7 male, and 50 internal with a gender
split of 13 female vs. 37 male. The overall total gender
balance on leader promotions was 29% women versus
71% male. The amount of female hires for promotions
grew by 125% from 8 in 2022 to 18 in 2023. In the
R&D department, Nordic has 183 leaders (68.8% of all
leaders), with a gender split of 9.3% female versus 90.7%
male. The percentage of female managers is to be
understood in conjunction with the overall gender split
in R&D which is 12% female and 88% male. In the rest of
the organization, the gender distribution in managerial
positions is 29.6% females and 70.4% males.

Managers* by department

Research and development

Male

Female

Rest of organization

Male

Female

Number of
managers

% of
total

183

166

68.8%

90.7%

9.3%

30.5%

70.4%

29.6%

*Leaders/managers include business function managers, team
managers, group managers, division managers, and executive
management.

Working time
Nordic complies with local employment legislation and
the RBA Code of Conduct. All employment contracts
include a paragraph describing the local working
hours, including overtime, where relevant, to clarify
expectations and adherence to local employment law
and regulations. Furthermore, working hours, including
local practice related to overtime and equivalent
employment-related conditions, are available for all
employees in country-specific employee handbooks.

Nordic operates 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.

Workload
2023 has been a particularly challenging year with
a hiring freeze and downsizing, both impacting the
workforce. Internal survey* data reveals a score 0.1
below industry benchmark on workload, which is a
decline from 0.2 above industry benchmark for 2022.
This score indicates that the general feeling amongst
employees is that workload is high. Nordic is carefully
assessing potential measures to address the situation.

*Nordic measures Employee Engagement through an annual survey
conducted in January 2024, for 2023, from here on referred to
as “The Survey" or “internal data analysis”. Results are measured
against the benchmark available for the technology industry
through a subscribed third-party provider with global reach within
relevant survey results, thus own results in 2022. The survey is based
on metrics using an average scale from 0-10, where the higher end
of the scale indicates higher satisfaction, while the middle and
lower parts indicate lower satisfaction or even dissatisfaction.

Work-life balance
In recent years, several different surveys have revealed
that flexibility and work-life balance are rated amongst
the most essential factors for employees when choosing
their employer.

Focusing on work-life balance requires a variety of
measures with such a diverse workforce. Nordic is
committed to improving employee well-being and work-
life balance in line with industry practices, society and
employee expectations. The Survey data confirms that
employees want more flexibility in their work schedules
to balance work and personal commitments with a
drop from 8.6 in 2022 to 8.4. When compared to the
technology industry benchmark, Nordic score places it
in the bottom 25%, suggesting that there is potential for
improvement in performance.

Remote work
Post-Covid, Nordic has experienced that the expectation
of being able to work remotely has spiked, with many
companies developing their employment offerings to
include remote work. As an employer, Nordic is forced
to regulate the possibility to work remotely in some
countries, such as Poland, where it has been established
an agreement with employees during 2023 to be locally
compliant. Otherwise, to ensure employees are treated
fairly, people managers in Nordic have the possibility
to grant individual requests to work from home up to
two days per week, where responsibilities can be safely
executed from outside the office. However, as there
is limited knowledge on how remote work impacts
innovation and productivity long-term, even more
importantly, how it impacts employee well-being, Nordic
has yet to establish a permanent remote working policy.
Consequently, The Survey data for 2023 reveals a score
of 0.7 under the industry benchmark in satisfaction
with current opportunities to work from home, which
indicates no significant change since Nordic measured
the equivalent in 2022. Nevertheless, the same analysis
confirmed that employees feel they have a physically
healthy balance in their lives, with an average score of
8.1, down from 8.2 in 2022. This is 0.2 above the industry
benchmark, leaving us in the middle range of the
technology sector.

Striking the right balance of flexibility while maintaining
a healthy workload for all employees, is a priority in the
year to come.

*Nordic measures Employee Engagement through an annual survey
conducted in January 2024, for 2023, from here on referred to as “The
Survey" or “internal data analysis”. Results are measured against the
benchmark available for the technology industry through a subscribed
third-party provider with global reach within relevant survey results,
thus own results in 2022. The survey is based on metrics using an
average scale from 0-10, where the higher end of the scale indicates
higher satisfaction, while the middle and lower parts indicate lower
satisfaction or even dissatisfaction.

Competitive wages
Offering a competitive employee value proposition,
including competitive wages, is imperative to
attract and retain required competences in a highly
competitive industry.

Nordic’s employee value proposition is adjusted to local
markets, and subsequently defined based on average
cost of living at place of employment, in addition to
local industry/market conditions. All employees are
entitled to a competitive wage in accordance with local
legislation and market practices. Individual salary levels
are determined based on objective measures, such as
performance, responsibility, seniority, education, and
experience, in addition to local market expectations.

The company’s Board of Directors has appointed a
designated People and Compensation Committee
(PCC) to evaluate and oversee the organization’s overall
compensation strategies. The committee is composed
of shareholder- and employee-elected Board members,
as well as contributions from members of the company’s
Executive Management Team.

Nordic is focused on developing a Total Rewards
package with both monetary and non-monetary
benefits. The Group’s compensation package, including
base salary and incentives, is reviewed annually
to ensure market alignment. Base salary serves as
the foundation of Nordic’s rewards package. The
Group conducts a salary review process annually,
however, this was not effectuated in 2023 due to cost

containment. Salary review budgets are based on both
internal and external elements to ensure fairness and
competitiveness while safeguarding the company’s
short- and long-term sustainability. Salary adjustments
are based on several factors, including, but not limited
to, individual performance, competitiveness of salary
level, position in the ladder/leveling structure, potential
promotions, and so on.

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

Temporary workers
Nordic has engaged a significant number of students
in internships, placements, and more during recent
years to ensure students graduate with relevant industry
knowledge. Despite the current financial constraints,
Nordic continued with student engagements during
2023, albeit at a lower level than in previous years.
Nordic, in addition, employs temporary workers either
directly or through agencies to cover in cases of
temporary absence, such as parental leave. By year-
end 2023, Nordic had 67 temporary workers (4.4% of
the workforce), including students and interns, with a
gender split of 85% male and 15% female. Excluding
students and interns, Nordic had 10 temporary workers
by year-end 2023, with a gender split of 50% male and
50% female.

Workforce composition**

2023

2022

Employees by type of employment, gender and
location

Number of
employees

% of total
employees

Number of
employees

% of total
employees

Permanent employees*

Female

Male

Temporary employees excl. students

Female

Male

Consultants

Norway

Female

Male

Finland

Female

Male

Female

Male

Sweden

Female

Male

Rest of the world

Female

Male

Total

1 493

256

1 237

96.5%

17.1%

82.9%

0.6%

50.0%

2.8%

43.2%

21.1%

78.9%

45.5%

10.0%

90.0%

2.3%

—%

100.0%

9.1%

75.0%

25.0%

—%

1 435

232

1 203

95.0%

16.2%

83.8%

0.7%

45.5%

54.5%

4.3%

44.6%

17.2%

82.8%

18.5%

16.7%

83.3%

4.6%

33.3%

66.7%

6.2%

75.0%

25.0%

26.2%

5.9%

94.1%

1 547

1 511

*Breakdown of location for permanent employees is provided in table for Employees by region & gender distribution.

**Due to privacy concerns and the low number of individuals in additional gender categories, this information is not disclosed.

Part-time employment
Nordic strives to offer full-time employment in all
positions, but offers part-time individual accommodation
to the extent possible. In 2023, 2% (30 employees)
of Nordic's permanent employees were employed in
part-time positions, either on employee request or in
accordance with medical advice. This number has been
stable during recent years, with no change from 2022 till
2023. The gender split was 23 men and 7 women (77%
versus 23%), largely reflecting the overall gender split.
Part-time permanent 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. Nordic wants to
ensure that student workers graduate with relevant
competence, in turn ensuring a steady talent pipeline.
Consequently, training and career development for entry
level employees is part of the leadership responsibility.

Nordic recruited 57 students in 2023 despite the
financial situation in the company and a global hiring
freeze. The Group saw a gender split of 91% male and
9% female, which is a decline in the female percentage
compared to 2022, and the overall gender split in the
company. Moreover, Nordic recruited 25 graduates in
2023 (76% male and 24% female). This comprised 14.2%
of all hires, compared to 15% (47 graduates) in 2022, still
relatively consistent in relation to the overall decrease in
hires.

Training and skills development
In 2023, Nordic defined a leadership development
framework, including core leadership principles. This
was an important part of establishing a leadership
framework, also in progress. During the year, Nordic
focused on developing internal leadership trainings,
covering basics such as "Introduction to Nordic
Leadership" (37% participation rate) and "Leading

Difficult Conversations" (11% participation rate). In
addition, 93 global leaders spent more than 179
training days combined attending external leadership
development courses. Subsequently, 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 leaders
embracing disruption and change, to reduce risk and
increase productivity and employee satisfaction.

To enhance the relationship between employee and
manager and ensure employee involvement in setting
performance objectives, Nordic encourage and facilitate
regular appraisal conversations between managers and
employees. In 2023, 60% of leaders globally attended
leader training on how to conduct valuable performance
appraisal conversations. The purpose of the dialogue is
to foster employee engagement, drive performance, and
ensure talent development. In 2023, 80.2% of employees
formally completed annual appraisal conversations (81%
of male employees and 76.4% of female employees).
One contributing factor to a relatively low percentage
is that the Human Capital Management system is not
always used for this purpose, thus, the actual numbers
might be higher.

The implementation of the new engagement survey
platform in 2022 also provided leaders and employees
with a platform for sharing and following up on
confidential feedback, contributing to a more direct
dialogue and new development opportunities. In the
survey, more than 9050 comments were provided by
employees, which is an important source to understand
where Nordic are doing well, and where there is a need
for improvement. According to The Survey data, the
majority of the employees know what they are expected
to deliver, with scores just below the industry benchmark
for goal setting (8.4 which is 0.1 below 2022 score). This
score suggests employees to a certain extent are able
to link individual contribution towards group objectives.
However, Nordic see a decline from 2022 related to
meaningful work, suggesting that not all employees

Health and Wellbeing

Health Score

Mentall Wellbeing

Management Support

Organizational support

Workload

Employee engagement

7.8

7.9

7.7

8.7

7.4

7.6

6.9

below benchmark

above benchmark

below benchmark

see their own value contribution. Nevertheless, the
data analysis confirms that employees appreciate
being offered challenging tasks with scores 0.4 above
industry benchmark (amongst top 25% of technology
companies), however down 0.3 from 2022.

Nordic encourages and facilitates internal recruitment
and promotions in leadership responsibilities when
possible. The Group has intensified both internal
and external training and resources to train and
build leadership capabilities among new as well as
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 which leaders are expected to adhere to,
in addition to both global and local procedures, policies
and practices.

The average tenure in the Group is 5.5 years, with 9.6%
(149 employees) percent of the total workforce having
worked 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.

Becoming a global company requires formalization
of frameworks for learning and development for both
for leaders and employees. In 2023, Nordic had a
strong focus on developing trainings for leaders to
build leadership capabilities within the newly defined
framework. The expectation is that 2024 will continue
down the same path, also with an overall increased
focus on learning for the entire organization. One
of the projects that will be initiated in 2024 is a full
competency mapping of the entire organization,
according to one of the ISO 45000 requirements.

Reduction in force
Given the backdrop with lower revenue, margin pressure
and low revenue visibility, the company needed to
adapt by reallocating investments and reducing costs.
Cost optimization measures included reduced use of
consultants, streamlining of operational structure and an
assessment of the total resources required to continue
the company’s main R&D programs. These measures
will have effect from 2024 and will reduce quarterly
operating expenses in the order of USD 5 million.

The RIF process was conducted in a locally compliant
manner and in close collaboration with employee
representatives where applicable. Affected employees
were offered severance packages and other relevant
support as part of the process. In total, 84 permanent
employees were impacted by the downsizing process,
leaving the company with a total headcount of 1,493 at
the end of the year, an increase of 4.0% from 2022.

Collective bargaining and rights of workers
Nordic supports and recognizes freedom of association
and the right to organize. In 2023, collaboration with
local employee representation was essential to balance
employee needs versus company needs throughout
the RIF process. This collaboration is regulated by
local legislation in some countries, requiring employee
consultation. Local employee representatives also played
an important role in supporting employees through a
difficult situation. In this process Nordic applied the
minimum notice period relevant for each location and
went beyond this depending on agreed parameters.

The Group encourages and facilitates global employee
representation and involvement. 22.4% of the
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. Employees in Poland, Finland and Norway
are represented by local employee representatives. In
Norway there are house representatives in addition
to labor union representatives. In Poland there is
house representation, while there is labor union
representation in Finland. Other employees are

represented through other elected representatives on
various matters. Working conditions, including salaries,
are in compliance with local legislation and defined
based on market data and benchmarks as explained
in the section for competitive wages, in combination
with data from employee representatives. It applies
to all employees independent of affiliation. Regular
meetings are facilitated between local management and
employee representatives at the larger office locations,
as is quarterly meetings between global employee
representatives and leaders from both People &
Communication and the Executive Management Team.
The dialogue between management and the employee
representatives is characterized by a two-way direct
feedback and continuous development approach, with
the ambition to enhance collaboration and processes.

Nordic value and consider information provided
from employees, either directly or through employee
representation, related to employment terms and
local working environment. Nordic positions terms of
employment and working conditions at par or above
regional statutory requirements, or in accordance
with collective bargaining agreements from other
comparable organizations.

Health & safety
Employees' health and safety is imperative for
Nordic Semiconductor. Nordic strives to always
uphold legal and ethical responsibilities and are
committed to continuous improvement. Consequently,
Nordic review and update policies and procedures
regularly to maintain high standards of transparency
and accountability. More so, Nordic also continue to
develop global health benefits to encourage employees
to be more active and take care of their own health,
deemed highly relevant, considering the nature of the
work in Nordic mainly being sedentary.

To ensure a safe working environment and promote
good health for the entire workforce, Nordic has an
occupational Health and Safety (OHS) Management
System. The CEO has the overall responsibility for
the company’s working environment and the OHS

management system. Nordic's OHS management
system is based on and 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 Nordic uphold
and continuously improve internal practices, procedures
and policies. This year's audit uncovered one minor
nonconformity and a few defined opportunities for
improvement. The nonconformity was related to
documentation of chemical handling, which is currently
being addressed and resolved by end of Q1 2024.

Nordic has not had any complaints or registered any
severe human rights incidents or violations within its
own workforce during 2023. The Group’s global Total
Recordable Rate (TRR) for 2023 was 0, which is equal
to having zero incidents. 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.

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. In compliance with local H&S legislation
Nordic also train employees, with 100% of the workforce
in Denmark and Sweden completing First Aid and
Fire Safety Training during 2023. In Poland, Nordic
do periodic H&S training, with 92% of the workforce
undertaking such during 2023. All Nordic Semiconductor
manufacturing partners must be certified according to
ISO 45001 or a similar standard and adhere to the RBA
Code of Conduct.

Nordic Semiconductor conducts an annual Occupational
Health and Safety risk assessment to reveal potential
areas of concern in the workplace. In 2023 the analysis
concluded that ergonomics, workspace, and role-related
stress are key improvement areas.

Engaging in regular physical activity has a positive
impact not only on one's own health, but also on
productivity and engagement. To promote physical
activity, the Group has continued the initiative where
employees are encouraged to be active for up to
60 minutes per week during working hours. This
initiative has been well received and widely used,
with over 20,000 hours spent in 2023 (approx. 30%
growth compared to 2022). In addition, to promote
physical activity outside the workplace and working
hours, Nordic Semiconductor introduced the benefit
of subsidizing gym memberships in 2022, with more
than 400 employees using this throughout the year. In
addition, outside-of-work activities were promoted by
Strava challenges, encouraging employees to be active,
with more than 4,000 active hours registered.

Sick leave
Nordic’s ambition is maintaining a healthy workforce
with a low level of sick leave. Consequently, both
short- and long-term rates are monitored continuously,
enabling us to take preventive measures. The global
average sick leave was 1.9%, a reduction of 0.5
percentage points from 2022. The rate for short-term
sick leave* was 0.88%, which is a decrease from 1.6%
in 2022 and well below the threshold of 2.5%. Overall,
all major sites had quite stable rates with no significant
changes from previous year. Total sick leave in Norway
was 2.6% (decrease of 0.2 percentage points from 2022),
while short-term sick leave remained below the Group
threshold at 1.5% in 2023 (decrease of 0.1 percentage
from 2022).

Employees are required to follow local reporting
requirements for registration of sick-leave outlined in the
country specific employee handbooks. All local practices
are in accordance with local legislation, including pay
during sick leave. Accident in the workplace is reported
under section for Health and Safety, further data is
collected in accordance with local legislation, in addition
to GDPR, and is hence limited.

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

Parental leave
All employees in Nordic are entitled to parental leave.
The terms for taking leave are outlined in the local
employee handbooks and based on country-specific
legislation and common market practices. During
2023, 54 employees (4% of total workforce) in Nordic
took parental leave, 46 men (4% of male employees)
and 8 women (3% of female employees). In Norway,
16 employees were on paternity leave (3% of male
employees), while 4 employees were on maternity leave
(4% of female employees) . Nordic pays parental
benefits beyond the National Insurance Scheme in
Norway. While the National Insurance Scheme refunds
an annual salary up to 6 G (G refers to the basic
amount used in the calculation of various social security
benefits, pensions, and other financial regulations).
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 10.3 weeks, while
the average for women was 30.6, resulting in an overall
average parental leave in Norway of 14 weeks in 2023.

Attrition
In 2023, the employee attrition rate was 8.8%. The
turnover rate was 6.8%, up from 6.6% in 2022. "Attrition"
is used to describe reduction of workforce by employees
leaving voluntary or involuntary for any reason.
"Turnover" is used for employees leaving voluntarily
(resignations only). In total, 128 employees left the
Group in 2023, whereof 100 voluntarily and 28 as a
consequence of the RIF process (21.9%). The RIF process
leaves attrition numbers for Q1 2024 by an additional 56
making the total RIF number 84.

Nordic’s People & Communication function encourages
and carries out exit interviews with leavers to obtain
objective information for improvement purposes and
ensure a professional experience throughout the entire
employee journey.

Historically, Nordic has had a high average length of
service. In 2023, the average tenure before job change
amongst Nordic’s competitors was reported by LinkedIn
to be just over 3 years. In comparison, Nordic had an
average of 5.5 years for 2023, which is high, especially,
considering recent years' growth rates. At the same time,
as the Group’s workforce ages, four employees across
the globe entered into retirement in 2023.

Employee engagement
Employee engagement measures dedication, motivation
and enthusiasm amongst employees. Highly engaged
employees have higher well-being, better retention,
lower absenteeism and higher productivity”(source
Gallup Q12 meta-analysis). Nordic conducted a global
employee engagement survey for 2023 at the beginning
of 2024 (90% participation rate). The Survey reflected
a challenging year, including a reduction in workforce
in Q4 2023. The employee engagement score was 6.9
(1.5 decrease from 2022) with a distribution of 51%
promoters, 29% passives and 20% detractors.

The company has already taken several measures
to increase employee engagement, however
acknowledging that the company has seen a
challenging year, which clearly has impacted employees.

Diversity & inclusion score

eNPS distribution

Indicator

Target 2024

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*

< 5.0%

Total compensation ratio change (year-over-year)

Diversity, equity & inclusion average score

Employee engagement average score

Above benchmark

Health and safety

Work related incidents

Lost Time Incident Rate (LTIR)

Fatality rate

Contractor fatality rate

Total sick leave (Norway)

0.0

Short time sick leave (Norway)

< 2.5%

Health and well-being average score

Above benchmark

Social well-being average score

Mental well-being average score

Management support average score

Organizational support average score

Workload average score

2023

1493

17.1%

8.8%

4.4%

2.72

8.0

6.9

0.0

2.59%

1.45%

7.8

7.9

7.7

8.7

7.4

7.6

2022

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

2021

1197

14.0%

5.6%

4.3%

9.18

0.0

2.28%

1.22%

*2023 CEO compensation includes a reversal of RSU and PSU expenses in connection with CEO resignation. Total compensation for CEO excludes
continued salary for one year after last working day and severance pay of total NOK 13 569 and, pro rated RSU payment of NOK 1 830. Comparing
only CEO fixed salary and average employee total compensation, the 2023 ratio is 5.33.

8.0

Promoters: 51% (709)

Passives: 29% (322)

Detractors: 20% (132)

Analysis of R&D career development from developer
to principal levels from 2018-2023 shows no significant
difference in career progression due to gender, location
or ethnicity.

In Norway, female hires increased from 27.4% in 2022
to 37.5.% in 2023. The following table Employee growth
shows gender diversity with a further breakdown for the
full Group with comparable data from previous years.

Category

Male

Female

Gender Pay
Ratio*

Overall (excl EMT)

1239

255

Executive Management Team
(EMT)

Business support**

Research and development**

Sales**

Supply Chain**

1011

137

75%

74%

84%

82%

51%

Gender pay ratio statistics for 2023, by category
*Average female salary / average male salary
**Executive management team has been excluded to avoid
double counting

Measures against harassment and violence in
the workplace
Nordic Semiconductor has a zero tolerance for harsh,
unfair or inhumane treatment of employees, including
any sexual harassment, sexual abuse, corporal
punishment, mental or physical coercion, or verbal
abuse. More so, in accordance with the RBA, Nordic
does not tolerate trafficking of human beings, forced
labor or child labor. Nordic has a non-discrimination
policy enshrining an employee's right not to be harassed
or discriminated.

In 2023, Nordic implemented a global disciplinary
procedure, sanctioning that disciplinary measures can
be initiated towards employees who have been involved
in matters of non-compliance, including breach of non-
discrimination policy. Nordic also initiated harassment
prevention training in both the US and Asia, with 93%
of employees participating in such awareness trainings.
All 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 Survey results indicate
a company culture where employees somewhat feel
they can be themselves without fear of discrimination,
offering fair opportunities. However, there was a 0.8
decrease from 2022 (there is a gap between genders,
where female scored 0.3 below males), which requires
attention and action.

Nordic will continue to uphold the non-discrimination
policy going forward. This policy, together with
other fundamental principles for a healthy company
culture, will be reinforced by the implementation of an
enhanced Nordic Code of Conduct in 2024. Nordic's
Code of Conduct, approved by the Board of Directors,
set out clear expectations, as well as guidance for
the management of challenging issues for the entire
workforce globally.

Priorities going forward
Moving forward, striving to keep a healthy work
environment, including monitoring workload and
ensuring a healthy work-life-balance, in addition to
implementing Nordic’s DE&I framework will be the
main priorities. These will be important to maintain and
increase employee engagement and attract and retain
talent. Being competitive in the fight for talent is key
for Nordic. In order to stay competitive, a healthy and
inclusive work environment where employees can thrive
is important. Implementing Nordic’s DE&I framework,
with a point of departure focusing primarily on inclusion,
will be an important step in structuring the work in
this area to maximize the output of the efforts for
business outcome. The aim is to continuously improve
Nordic’s culture of innovation and ensure an inclusive
and healthy working environment. Nordic is dedicating
significant effort to fostering such a culture and,
through this, also maintaining and increasing a healthy
employee engagement.

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 discrimi-
nation 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.

Workers in the
Value Chain

Commitment
Nordic Semiconductor is committed to conduct business
in a way that respects and supports internationally
proclaimed human and labor rights.

Targets
Further develop human rights framework, further
develop partner in-depth risk assessment, further
develop reporting on sourcing of minerals.

KPI
Conduct in-depth risk assessment of selected companies,
full coverage of conflict minerals reporting for
standard products.

Status
Portfolio risk assessed and high-risk categories mapped
forprioritization; in depth risk assessment of companies
based onprioritization ongoing. All standard products
have full coverage for conflict minerals reporting.

Impacts
Promote peaceful and inclusive societies by commitment
to respect and support for human rights and decent
working conditions.

Risks
Procurement of goods and services from industries and
geographies with inherent risks related to human rights
and labor rights. Loss of reputation and
business opportunities.

Strategy
Combine own focus and industry-level sustainability
efforts to positively impact the value chain.

2023

Why it matters
As a fabless semiconductor company, Nordic develops
and sells electronic circuits for which manufacturing
is outsourced to specialized partners throughout Asia
and Europe. In other words, Nordic's products are the
result of concerted efforts by workers in a complex
semiconductor supply chain - from material extraction
to component assembly and test. Downstream, Nordic
collaborates with trusted distributors to ensure an
efficient service to the customers' value chain in various
markets, where products are incorporated into further
developed products that the end customers can use.

The semiconductor value chain includes the
procurement of raw materials, products, and services
from industries and geographies with inherent risks to
workers' rights. This could lead to potentially negative
impacts for workers in the value chain where their rights
are not respected.

Nordic's approach
Nordic's value chain and its sustainable value chain management are illustrated on the
succeeding page. Commitments are described in the Corporate Social Responsibility
policy. The Group conducts risk-based due diligence in compliance with internationally
accepted frameworks as described in this chapter.

Sustainability governance, due diligence and audits

Contribution to the SDGs

Nordic is
committed to the
Responsible
Minerals Initiative
(RMI) and supports
transparency
related to sourcing,
reﬁning and
smelting of raw
materials.

Nordic conducts risk based due diligence of business partners to enable us to identify potential risks
related to human rights and decent working conditions, health & safety, environmental performance
and business conduct. Such due diligence is gathered through various means through a combination
of desktop exercises, direct and indirect dialogues with our stakeholders and managed through
various processes.

Nordic requires all Tier-1 suppliers to adhere to the RBA Code of Conduct which contain a set of social,
environmental and ethical industry standards. The standards refers to international norms and
standards such as the UN Declaration of Human Rights, ILO and the OECD Guidelines for Multina-
tional Enterprises.

Nordic requires all manufacturing suppliers to meet the International Organization for Standardization
(ISO) requirements regarding environmental and quality management.

For our Tier-1 suppliers Nordic utilizes the RBA Self-Assessment Questionnaires and audits.

Nordic products are incorporated into
the products of our customers,
consisting of a wider ecosystem of
business-to-business (B2B) and
business-to-consumer (B2C), as well
as Internet of Things (IoT) solutions,

Many of these were used for various
applications that contributes to
multiple Sustainability Development
Goals (SDGs).

See our Sustainability Strategy
chapter for speciﬁc examples.

Nordic is
committed to
ensure integration
of sustainability
throughout our
value chain.
Nordic’s work is
guided by
international
frameworks and
standards, such as
the Universal
Declaration of
Human Rights, ILO
International Labor
standards, the
OECD Guidelines
for Multinational
Enterprises
and ISO.

Own operations

Upstream

Downstream

Nordic
Semiconductor
Design & development
of hardware, software
and services

Sub-tier
suppliers
Raw material
production

Sub-tier
suppliers
Logistics

Tier-1
suppliers
Wafer production

Tier-1
suppliers
Testing & Assembly
of hardware

Suppliers
Logistics

Distributors
Sales & Logistics

Customers
Development
of IoT products

End-Users
Use of IoT products

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

2023

Safeguarding human rights and decent working
conditions in the value chain
As a global fabless semiconductor company bringing
together best-in-class experts from across the globe,
Nordic firmly believes that people are the greatest asset
of its value chain and that they shall be treated with
dignity and respect. From initial design and prototype
production to manufacturing and distribution, human
and labor rights shall be at the core of how Nordic
treats employees, the workers in the value chain, and
the local communities that the Group is a part of.

Nordic endorses the principles outlined in the United
Nations Guiding Principles on Business and Human
Rights and the OECD Guidelines for Multinational
Enterprises. The Group strives to integrate these
principles into its human rights due diligence framework.

The human rights due diligence framework is an
integrated part of Nordic's compliance program,
managed by the Head of Compliance. The Head of
Compliance supports the organization in implementing
Nordic's commitment to human and labor rights
within the respective business- and functional areas
by incorporating relevant measures into relevant
procedures, actions, and mitigation plans.

This section has been developed to comply with the
legal requirements of the Norwegian Transparency Act
of 2021 and is prepared based on information collected
from all consolidated entities in Nordic.

1. Anchoring of commitments

Nordic is committed to sustainable business practices
supporting internationally recognized standards such
as the Universal Declaration of Human Rights, the
International Labor Organization (ILO) core conventions,
and the United Global Compact.

Communicate
How impacts are
adressed

Track
Implementation
and results

Embed responsible
business conduct
into policies &
management systems

Identify & assess
adverse impacts
in operations, supply
chains & business
relationships

Cease, prevent
or mitigate
Adverse impacts

Provide for or
cooperate
in remedation
when appropriate

Nordic is a signatory of the UN Global Compact
Principles and a member of the Responsible Business
Alliance (RBA) and the Responsible Minerals Initiative
(RMI). The Group has outlined its human- and labor
rights commitments in the following:

Corporate Social Responsibility Policy
The Corporate Social Responsibility Policy outlines
the commitment to responsible and ethical business
practices, emphasizing accountability for societal
and environmental impact, stakeholder interests,
and adherence to human rights. The policy prohibits
forced- and child labor and prohibits retaliation against
those reporting concerns of misconduct. The policy
also commits Nordic to comply with the Responsible
Business Alliance (RBA) Code of Conduct and that the
manufacturing suppliers shall sign adherence to the RBA
Code of Conduct with a commitment to communicate
its expectations and requirements to the following
next tier of suppliers. The policy is available on the
Group’s website.

Conflict Minerals Policy
The Conflict Minerals Policy articulates the commitment
to engage only in trade that upholds the respect
for human rights and does not contribute to violent
conflicts. Nordic’s products and supply chain shall
be “conflict free”, i.e. free of materials that directly or
indirectly finance or benefit armed entities. Furthermore,
the Policy affirms Nordic’s commitment to the OECD
Due Diligence Guidance for Responsible Supply Chains
of Minerals from Conflict-Affected and High-Risk Areas,
and to conduct due diligence of relevant suppliers,
encouraging them to do the same with their own
suppliers. The policy is available on the Group’s website.

2. Conducting regular risk assessments

Nordic conducts regular risk assessments of its value
chain to identify significant risks and adverse impacts on
human rights and decent working conditions. Reporting
on human and labor rights risks is an integrated part of
the Enterprise Risk Management process, subject to a
biannual review.

Business partner assessment utilizes consolidated
accounting data for the reporting period to identify
procurement categories. These categories are
scrutinized against sector and industry risk information
provided by the Norwegian Government Agency for
Financial Management (“DFØ”), the International
Labour Organization (“ILO”), and The United Nations
Environment Programme Finance Initiative (“UNEP”).
Additionally, Nordic factors in country risk data using
indexes such as Transparency International Corruption
Perception Index, the International Trade Union
Confederation Global Rights Index, the U.S. Department
of Labor List of Goods Produced by Child Labor or
Forced Labor, and the Global Gender Gap Report
Index. The outcome of the assessment is an overview of
inherent business partner risk exposure, enabling Nordic
to identify companies and categories of such that will
be prioritized for further in-depth risk assessment.

Through the risk assessment, Nordic has identified and
grouped three inherently high-risk, eight inherently
medium-risk, and six inherently low-risk categories of
companies. Due to to the number of companies and
geographical spread, Nordic selected the following
high-risk category as priority for further in-depth
assessments due its strategic significance:

■ Manufacturing: Encompassing foundries, OSATs, and
other component suppliers involved in the production,
testing, and assembly of semiconductors.

While Nordic’s focus in 2023 has been on conducting
in-depth risk assessments of selected companies, this
endeavor demands substantial effort and will need
to extend into a longer timeframe and a continuous
approach throughout the portfolio.

3. Preventing and mitigating identified risks and actual

negative impacts

Nordic is committed to conducting business ethically
and lawfully and expects the same from business
partners. Potential and existing business partners are

subject to due diligence to ensure their reputations and
abilities meet Nordic standards. Upon identification of
a risk, Nordic may necessitate further measures such as
further documentation, interviewing key personnel, or
determining other appropriate actions.

Supply chains for manufacturing semiconductors,
especially sourcing of raw materials, tends to be
complex and fragmented. This leads to limited
traceability and transparency, and in turn, increases
the inherent risk for human and labor rights violations.
Ensuring compliance with the RBA Code of Conduct
is embedded into Nordic's supplier management
framework. Nordic conducts a site audit that includes
Corporate Social Responsibility management of new
manufacturing suppliers. Any identified risk or finding
during this audit is followed through before approving
any supplier. As part of continuously monitoring
approved suppliers, Nordic utilizes RBA questionnaires
and audits. The result of an RBA audit is accessible to
all RBA members who nominated the supplier and are
approved by the supplier/auditee. Failure to actively
remediate or comply with Nordic's requirements or the
RBA Code of Conduct could result in the termination of
the business relationship.

As of today, all Nordic’s tier-1 manufacturing suppliers
have their own documented corporate social
responsibility policies and have signed adherence
to the RBA Code of Conduct with a commitment to
communicate this to the following next-tier suppliers.
Several of our manufacturing suppliers have their
memberships in RBA.

To further address potential risks and impacts, Nordic
analyzes whistleblowing reports submitted through
reporting channels. Regular discussions among different
levels of management and employees facilitate
identification and mitigation of concerns, ensuring the
prevention of adverse impacts on people.

4. Tracking and evaluating the efficiency of

implemented measures.

Nordic conducts monitoring of its suppliers, as detailed
in step 3. Risks and adverse impacts are addressed
through appropriate actions, including targeted
remediation or preventive measures. In some cases,
Nordic might conduct follow-up audits to ensure
measures have been effectively implemented. The
implementation and effectiveness of measures, as well
as any remedial actions, are closely monitored by the
responsible business function manager.

5. Communication with stakeholders.

Stakeholder engagement is a key part of the Nordic’s
human rights due diligence work. Nordic collaborates
closely with suppliers to ensure that they uphold
human- and labor rights in the way they conduct their
business. The Group seeks to actively communicate with
employee representative bodies as an extension of the
efforts to improve respect for human rights and working
conditions. Nordic will continue to engage with global
stakeholders to foster a culture of respect for human
and labor rights, not only in the business but also in the
industry. Nordic participates in multilateral initiatives
such as the Responsible Business Alliance and UN
Global Compact.

Nordic Semiconductor provides information on how to
work and respect and support labor and human rights
in the Annual Report, which is made publicly available
on the Group’s website.

Nordic has established a way for the public to contact
and a process for handling information requests on how
human rights due diligence is conducted along with
findings/results.

6. Remediating identified or reported grievances.
Nordic is committed to effective remediation where
adverse human rights impacts are caused or contributed
to. Nordic demands prompt remedial action where
violations have been identified. Where Nordic find
impacts directly linked to the business relationships,
influence will be applied to encourage suppliers or
business partners to cease, prevent, or mitigate adverse
impacts on human rights.

Conflict Minerals due diligence and reporting
Nordic is committed to meet internationally accepted
due diligence standards, and monitor tier-1 suppliers
to identify those that supply materials at risk of
containing conflict

minerals. For Conflict Minerals Management, Nordic
cooperates with its manufacturing partners, of which
80% are currently RMI members.

Smelters and their locations are identified based on the
reporting template from RMI, which has become the
industry standard. All the smelter information received
from the suppliers is validated against RMI's conformant
smelter list. Nordic only accepts smelters verified
as conformant.

Nordic provides reports at the smelter/refinery level to
customers and other stakeholders upon request. The
reports contain information on smelters' compliance
status, mine locations, and Nordic’s management of
Conflict Minerals issues.

In the event of changes to the smelter list or smelters'
compliance status, these changes are investigated
and handled by company routines for managing non-
conformities and corrective actions. Corrective actions
can include requiring suppliers to stop using a non-
conformant smelter or changing suppliers as necessary.

To date, Nordic has no incidents of using smelters
supporting armed conflict. For 2024, Nordic expects
Conflict Minerals to remain a highly relevant issue and
will continue to engage suppliers to precisely identify the
origin of all material used in Nordic's products.

In 2024, Nordic will implement a whistleblowing channel
that is open for reporting from external stakeholders,
including workers in the value chain. Nordic does not
tolerate retaliation against anyone who speaks up in
good faith, and all reported grievances and violations
are managed confidentially. For more information
about Nordic's process for handling reports of concern
and whistleblowing channel, see the chapter on
Business Conduct.

Responsible sourcing of minerals
Nordic's products contain 3TG (Tin, Tungsten, Tantalum,
and Gold) and Cobalt. Nordic Semiconductor
acknowledges that sourcing of minerals are exposed
to inherent human- and labor rights risks. As a fabless
semiconductor company, Nordic does not purchase
minerals directly from mining companies or smelters,
but this is part of the indirect procurement from
manufacturing partners.

Nordic is a member of the Responsible Mining Initiative
(RMI), an initiative by the RBA, and the Global
e-Sustainability Initiative (GeSI). As a member, Nordic
is committed to ensuring business practices support
responsible mineral sourcing, including but not limited to
conflict-affected and high-risk areas.

Conflict Minerals Policy
Nordic's conflict minerals policy is publicly available
on the Group website. The policy covers Nordic’s
commitment to exercise due diligence according to
OECD guidelines and to engage with suppliers to
exercise such due diligence.

Ongoing activities, such as mitigation of identified risks/
impacts up until satisfaction, integrity due diligence,
RBA audits, and maintenance of reporting channels, will
continue as planned.

2023

Consumer and
End Users

Commitment
Nordic is committed to provide efficient, reliable and
secure products and services.

Targets
Provide the market with high quality products and
services that are highly secure while also ensuring cyber
resilience and awareness.

KPI
Provide certified and secure products, customer
satisfaction, provide robust technical and organizational
resilience against cyber attacks.

Status
PSA Level 2 certification passed for nRF 5340 and nRF
9160, established dedicated information security and
cyber resilience organization and initiated cybersecurity
awareness training.

Impact
Provide the market with secure and reliable.

Risks
Loss of reputation, litigation, loss of future potential.

Opportunities
Strengthen Nordic Semiconductor's reputation as trusted
provider of connectivity solutions.

Strategy
Continued enhancement and progress of ongoing
initiatives, as well as risk detection and mitigation

Why it matters
Nordic Semiconductor seeks to be a leading provider of
connectivity solutions for the IoT, with integrated circuits
(ICs), development kits and prototyping tools, as well
as the complementing software and cloud solutions,
empowering customers to create highly efficient, reliable
and secure products with optimized features for their
end-users. Nordic’s unwavering commitment to ensuring
unparalleled quality, security, and reliability forms the
foundation of the reputation as a trusted provider.

For Nordic Semiconductor, failure to deliver on
expectations from customers can lead to loss of
revenue, future business opportunities, litigation and
negative reputation. Conversely, delivering secure,
reliable products and solutions of high quality can give
Nordic Semiconductor commercial and financial upside,
in addition to strengthening reputation.

Nordic’s approach
Nordic’s commitment is outlined in the Information
Security Policy and ISMS Secure Development Policy,
both of which are published in internal channels.
Customer feedback is actively tracked with Nordic’s
customer feedback loop, allowing us to obtain
invaluable feedback which informs the continuous
improvement and investment into security and
quality measures.

Product security
In the ever-evolving landscape of security challenges,
Nordic Semiconductor remains steadfast in its
commitment to delivering products and services that
are not only innovative but also inherently secure for
customers and end-users.

To address the importance of managing material actual
and potential impacts on customers and end-users,
Nordic Semiconductor has established a dedicated
product security team lead by a Product Security
Officer ("PSO"). The PSO is responsible for aligning and
coordinating security engineering efforts and reports
directly to the Chief Technology Officer ("CTO").

Nordic’s systematic security development process
considers best practices, regulatory requirements,
and customers’ input to define products and services.
Each product development project establishes security
targets, ensuring alignment on assets, security controls
and threats to be addressed. Each product development
project follows a secure development lifecycle which
mandate establishing security targets and performing
threat modelling. This effort ensures alignment on
assets, security controls and threats to be addressed by
the product development project.

Nordic’ Semiconductor's product security strategy is
aligned with the Platform Security Architecture (PSA)
initiative by Arm, which offers a framework for securing
connected devices. Security targets and product
deliverables are evaluated using the SESIP methodology
within Arm's PSA Certified program. In 2023, Nordic
successfully passed PSA Level 2 certification with the
nRF5340 short-range and nRF9160 long-range products.

Cryptographic key management is another area of
focus, ensuring that confidentiality of key values is
preserved. Infrastructure and process complies with the
Common Criteria - Security Assurance Requirements.

Nordic Semiconductors Product Security Incident
Response Team (PSIRT) responds to reported security
vulnerabilities in Nordic Semiconductors products
(hardware and software), documentation, and services.
The PSIRT ensures that security vulnerabilities are
analyzed, documented, and communicated in a
responsible manner. Vulnerabilities are assessed using
the Common Vulnerability Scoring System (CVSS). To
help secure hardware and software portfolio, Nordic
also sponsor a bug bounty program on a top hacker-
powered security platform, HackerOne.

Ensuring customer satisfaction
Nordic believes that the best way to ensure long-term
customer engagement is through deliveries above or
according to customer expectations. This commitment is
documented in the Quality Policy as stated above.

Risk assessments are regularly conducted on Group
systems, and internal and external audits are carried out
to identify improvement potential annually at minimum.
The threat landscape is monitored for emerging risks
and vulnerabilities.

Cybersecurity is an important aspect of information
security, and Nordic has measures in place to identify,
protect, detect, and respond to data breaches
or cyberattacks.

In 2023 the Group has established a dedicated
information security organization to organize and
facilitate work on Information Security and Cyber
resilience. Nordic had throughout 2023 focus on cyber
resilience and will as a continuous process, continue to
build resilience on systems, processes and people.

The mandatory awareness program for all users started
in 2023, will continue into 2024 and include educating
modules for cyber security risks and data protection
among other topics. The Executive Management Team
conducted cyber security awareness and training
sessions with third parties in 2023.

In 2023, the Group has not identified any information
security incidents which have caused disruption or
data leaks.

Quality assurance and management
Nordic is convinced that high quality products are the
minimum and required baseline for any semiconductor
player – this is what gives us the right to play.
Quality assurance concerns managing the company's
deliverables and the expectations to the deliverables.
This includes planning, documenting, controlling and
improving how Nordic organize the work in processes
and projects across the organization to prevent design
mistakes. Product quality is controlled by verification,
characterization, and qualification testing in the
development processes, while each produced unit is
subject to outgoing acceptance testing. In case of
failures, documented procedures and routines are in
place to ensure effective and efficient handling of
customer complaints, or non-conforming production
outputs. Since Nordic knows that time is critical for any
Customer experiencing a problem, it has been chosen
to invest heavily in a state-of-the-art failure analysis
lab to rapidly support with root cause analysis in
case needed.

Nordic runs an extensive customer satisfaction survey
annually, targeting existing customers and distributors.
Survey results show consistent high satisfaction results,
but have also helped us identify areas of improvement
within product and service portfolio. In addition, direct
communication with, and scorecards from, Key Account
customers are used to get a holistic view of different
customers perception of the deliverables.

There are multiple and parallel channels to get support
from Nordic Semiconductor. Any support request can
be filed on the Dev.Zone support site where a first
feedback is provided within 24h (working days) and the
Field Quality group can also be contacted directly in
cases related to Mass Production.

Nordic has been certified to ISO 9001 since 1996, and
has since then added additional certifications integrated
with the management system. This includes ISO 45001,
ISO 14001 and ISO 27001. Certificates are available on
Nordic's website.

Based on feedback from customers, and the evolving
technologies and product portfolio, Nordic has
developed a User Experience program to improve the
customers journey and experience with Nordic's product
offerings.

Nordic's Quality policy outlines the commitment to
customer satisfaction and profitability, and how this will
be achieved by meeting relevant quality objectives:

■ Deliver the right product on time and without defects

■ Communicate clearly and timely to put expectations

right

■ Comply with applicable standards and regulations

■ Work continuously to reduce waste in the processes

Throughout 2023, Nordic has made characterization and
qualification programs stricter than industry standards
and the result of this is expect to be an even further
improved quality level of up-coming and new products.

Information security and cyber resilience
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 and
controls are aligned with industry standards (ISO27001,
CIS, NIST) and implemented to protect information,
including (but not limited to) information classification,
access management, encryption, secure IT operations,
backups, incident response and physical security.

Data privacy
Nordic Semiconductor 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 the 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.
Incidents or non-compliance are managed according
to routines for registration, investigation, corrective,
and preventive actions (including notifying affected
parties and authorities). Consumers and end-user are
provided with communications channels to execute their
statutory rights.

Priorities going forward
In 2024 Nordic Semiconductor will continue the efforts in
an increasingly complex global environment to remain
a trusted provider of quality, security and reliability in
delivering products and services. Nordic will execute on
the following main activities:

■ Continued development of product security initiatives,
contributing to highly secure products and services.

■ Continued strengthening of characterization and

qualification programs to ensure high quality of new
products and services.

■ Continued focus on cyber resilience and awareness

Governance

Nordic Semiconductor is committed to complying with
applicable laws and regulations and conduct business
through highly ethical business practices. To this purpose,
Nordic has a corporate governance framework for
how the Group is directed and controlled to ensure
achievement of strategic objectives the right way. Good,
transparent corporate governance aligns the interests of
shareholders, employees, customers, business partners,
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.

Business conduct

Commitment
Nordic Semiconductor is committed to complying with
applicable laws and regulations and conduct business
with highly ethical business practices and zero tolerance
to any form of bribery or corruption.

Targets
Building and maintaining a culture of integrity and trust
by continuously implementing and improving Nordic’s
compliance program, while maintaining zero compliance
violations

KPI
Code of Conduct development; Enhancement of process
and system for reporting & handling of concerns;
Enhancement of sanctions & trade compliance
framework, Enhancement of competition compliance
framework

Status
New Code of Conduct and reporting system to be
presented to BoD in Q1 2024; other enhancement work
ongoing.

Risks
Nordic have offices and business partners located
in high-risk countries, based on the Transparency
Corruption Perception Index.

Strategy
Good, transparent corporate governance aligns the
interests of shareholders, customers, employees,
business partners and other stakeholders to maximum
value creation and reduce business-related risks.

Why it matters
Nordic is dedicated to upholding the highest standards
of integrity and ethical conduct in every aspect of
the business. The Group’s commitment to responsible
business conduct plays a pivotal role in safeguarding
reputation, preventing financial losses and civil and
criminal penalties, maintaining stakeholder trust, and
ensuring long-term sustainability and success.

With Nordic’s business activities spanning across
countries, labor conditions, cultures, and traditions,
ensuring ethical and responsible business conduct
is not only critical for the organization but also the
entire value chain. In response to increasing regulatory
demands and heightened stakeholder expectations for
robust compliance programs, Nordic Semiconductor is
committed to continuously strengthening its initiatives.

Nordic’s approach
Governance and compliance oversight
The Board Audit Committee supports the Board of
Directors in fulfilling its responsibilities in ensuring
that the company has adequate company policies,
procedures, systems and measures to prevent violations
of relevant rules and regulations, including: anti-
corruption, data privacy, competition compliance,
insider trading, sanctions and trade compliance, and
human rights.

Recognizing the importance and complexity of
managing business integrity and compliance risks
in a global, dynamic business environment, Nordic
Semiconductor has established a dedicated compliance
function led by the Head of Compliance. The Head
of Compliance plays a pivotal role in supporting the
Board of Directors, the CEO in ensuring effective and
consistent management of business conduct and
compliance risks throughout the organization. Reporting
to the Board of Directors through the Audit Committee,
the Head of Compliance provides regular updates on
compliance risks, risk mitigation initiatives, and non-
compliance matters.

The compliance framework is managed by Head of
Compliance and is inspired by standard management
system practices and relevant regulations such as
the United States Foreign Corrupt Practices Act and
the United Kingdom Bribery Act. It is structured into
preventive (Plan), managing (Do), detecting (Check)
and responding (Act) measures covering the areas of
anti-corruption, competition compliance, data privacy,
human rights, insider trading, and sanctions and
trade compliance.

Common to all material compliance programs is Nordic’s
systematic and integrated approach wherein impacts,
risks, and opportunities are identified and assessed
through the enterprise risk management process.
This assessment forms the basis for the planning and
execution of risk mitigation activities such as updates of
procedures and/or controls, and training.

Ensuring a good corporate culture
As a member of the Responsible Business Alliance
(RBA), the world's largest industry coalition dedicated
to responsible business conduct in global supply chains,
and as a signatory of the United Nations Global
Compact, Nordic supports and adhere to both the RBA
Code of Conduct and the Business Principles outlined by
the UN Global Compact. Nordic’s external commitments
are anchored in the leadership team and stipulating
the expectations in the governance documents, Code
of Conduct, and other relevant policies and procedures.
Managers at all levels are expected to lead by
example, including ensuring a culture of trust to allow
the identification and management of concerns and
compliance risks within their areas of responsibility.

Nordic’s anti-corruption policy sets forth the commitment
to zero tolerance of any form of bribery or corruption.
The Group’s commitment applies to all employees
and directors of the Group, as well as anyone acting
on the Group’s behalf. Nordic’s anti-corruption policy
is supported by relevant procedures, guidelines, and
training to mitigate bribery and corruption risks.

2023

Nordic Semiconductor provides risk-based training to
its employees to build awareness and understanding of
the commitments. In 2023, Nordic provided simulated
information security trainings to all employees to
enhance defenses against cyber-attacks. Furthermore,
in response to rapid regulatory changes and an uptick
in global trade secret litigation, Nordic introduced a
targeted e-learning course. This initiative is a crucial
step to ensuring the continuous protection of Nordic’s
competitive advantages.

Nordic Semiconductor has developed an integrity culture
index, which is incorporated into the annual employee
engagement survey. The survey measures the perception
of integrity throughout the organization, in relation
to dimensions such as tone from the top, speak-up
culture, and sense of organizational order and justice.
The survey allows Nordic to monitor trends as well as to
focus on potential improvement areas. The 2023 survey,
with a 90% participation rate, provided a positive score
of 7.9 out of 10 and valuable data to explore further and
incorporate where relevant into the various compliance
initiatives in 2024 and onwards.

Reporting and handling of concerns
Nordic Semiconductor is committed to building and
maintaining a culture of trust where employees are
comfortable to ask questions, seek guidance, and
raise concerns. Typically, concerns are directed to line
management. Employees also have the option to
raise issues with their local Human Resources Business
Partner, Safety or Employee representative, or a member
of the Legal & Compliance department. Alternatively,
employees can submit a report through the confidential
reporting channel, available on the Group’s website and
intranet. As of 2024, Nordic will expand the possibility
to report potential concerns to external stakeholders
through the reporting channel.

Reported concerns are managed in accordance with
Nordic’s whistleblower procedure, which establishes
a process for prompt, independent, and objective
handling of concerns. The procedure emphasizes that
all reported concerns shall be treated with the utmost

confidentiality, respecting the rights and protections of
all parties involved (such as their right to contradiction
within a reasonable timeframe). Continuous feedback
to the reporter ensures transparency throughout the
process. The Head of Compliance is responsible for
providing regular reporting to CEO and the Audit
Committee of the Board.

Nordic Semiconductor has a zero tolerance policy for
retaliation against anyone who speaks up in good faith
by raising a concern, reporting a suspected violation, or
participating in an internal investigation. Individuals who
raise concerns in good faith or help resolve reported
concerns are protected against retaliation in accordance
with regulations.

For more information about management of supplier
relationships, including assessment and management
of environmental and social factors see the chapter
Workers in the Value Chain.

Political influence and lobbying activities
Nordic does not engage in a large number of lobbying
activities. The company is listed in the EU-lobby register
and frequently conducts low-threshold lobbying.

Nordic Semiconductor refrains from sponsoring political
or religious groups to uphold a neutral and inclusive
stance, acknowledging the diverse perspectives of the
stakeholders, and avoids any situations of perceived
conflict of interest or bribery.

Working with business partners
As a global fabless semiconductor company,
supplier management is crucial to Nordic’s success. It
ensures a sustained focus on practices that are both
environmentally sustainable and socially responsible,
leading to the production of high-quality deliverables.

Nordic Semiconductor is committed to only entering
into business relationships that ensure the company's
core values, integrity, and compliance will remain
uncompromised. Potential and existing business partners
are subject to a risk based due diligence conducted
with the support of professional service providers. Due
diligence encompasses assessment of the prospective
business partner's ownership structure, including
beneficial owners, connections to politically exposed
persons, and reputational risks associated with the
entity and its key personnel. The assessment aims to
determine whether identified risks can be adequately
mitigated through targeted measures.

Nordic requires all manufacturing partners to be
certified to relevant ISO and environmental standards.
All 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.

Commitment to tax transparency
Tax transparency is a fundamental component of
Nordic’s corporate governance. Pursuing clarity and
accountability, Nordic has made the tax policy publicly
available on the Group’s website. This policy articulates
the approach to tax matters, ensuring compliance with
all relevant laws and regulations across the jurisdictions
in which Nordic operate. It reflects Nordic’s dedication to
ethical tax practices and understanding that responsible
tax management is integral to sustainable business
growth and shareholder value.

The Board of Directors of Nordic Semiconductor
oversees the implementation of the tax policy,
guaranteeing that it is in harmony with the strategic
objectives and corporate ethos. Nordic encourage
stakeholders to review the published policy, which
demonstrates the Group’s commitment to transparency
and reinforces the trust placed in Nordic by customers,
partners, and the wider community.

Priorities going forward
In 2023, Nordic Semiconductor focused on maintaining
core elements, in addition to initiate the development of
new components of the global compliance framework.
In 2024, the main focus will be on implementing these
new components. As part of a Group-wide employee
engagement project, one of the main activities will be
to implement a new and enhanced Code of Conduct
to support employees and strengthen the company
culture. As part of the implementation, Nordic will
launch a e-learning Code of Conduct course. The Code
of Conduct e-learning course will become a mandatory
requirement for all employees, and should be completed
annually and as part of the onboarding process of new
employees. Following the launch of Code of Conduct
e-learning, Nordic will introduce further specialized,
in-depth courses aimed at addressing specific relevant
risk areas.

Ensuring the possibility of reporting and adequate
follow-up is an important task. In 2024, Nordic will
implement a revised Reporting and Handling of
Concerns procedure (whistleblower procedure) and
a new reporting channel Integrity Line. This channel,
equipped with a robust case management system, will
accommodate reporting both from employees as well
as third-parties. Another main initiative is implementing
an improved business partner screening process and
screening tool. Lastly, Nordic will focus on further
strengthening competition compliance efforts, in
particular development of guidance materials.

Indicator

Target

2023

2022

2021

2020

Confirmed incidents of corruption and actions taken

Numbers of reports made through whistleblowing channels

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

Number of substantiated complaints or incidents concerning
data breaches

Annual Information Security awareness training conducted

Yes

Outlook

Nordic remains confident in the long-term growth potential for its products
and services, and the overarching goal of the Board of Directors and top
management is to return to growth and restore profitability. The current
primary focus is on product strategies, development roadmaps and
engineering efficiency and throughput, to ensure that Nordic continues to
have the best products and solutions on the market to support it strong
customer base. Nordic is on track to realize initial revenue from its new nRF54
Series SoCs towards the end of 2024.

Nordic remains confident in the long-term potential for
its products and services. Technological advancements
and the Internet of Things hold great potential for both
consumers and enterprises. The continuing digitalization
of everyday life for both consumers and enterprises
will drive demand for connectivity solutions that meet
the demands for higher performance, more features,
better interoperability, and increased energy efficiency.
Nordic is well positioned to take advantage of its market
leadership in Bluetooth and the emerging cellular IoT
market, and its investments in next-generation Wi-Fi
solutions and adjacent technologies and markets.

Nordic’s markets have however been in a cyclical
downturn through 2023, with revenue declining by 30%
after average annual revenue growth of close to 40%
over the preceding three years. As outlined in the interim
report for the fourth quarter 2023, Nordic sees a low
revenue level of USD 70-80 million in the first quarter
2024, due to continued inventory adjustments and more
normal seasonality. Gross profit is expected at around
50% in the first quarter, and the company reiterates its
long-term ambition to maintain a gross margin level
above 50%.

These lower revenue levels challenge an operating
model that has been geared towards growth. Towards
the end of 2023, Nordic took steps to lower costs
through a restructuring process that affected around
100 employees and has further sharpened cost
consciousness across the organization.

To achieve revenue growth and return to profitability
Nordic will continue to deploy significant resources to
make sure Nordic continues to have the best products
and solutions on the market, and further develops the
many strong customer relationships it has built over
the years.

The current primary focus is hence on product strategies
and development roadmaps, maximizing efficiency and
throughput from Nordic’s excellent engineering teams.
Nordic is on track to realize initial revenue from its
nRF54 Series SoCs towards the end of 2024 and regards
its industry-leading 22 nm wireless and embedded
technology platforms at two key partnering foundries as
a clear advantage going forward.

In the initial stages of EU Taxonomy implementation,
Nordic's sole eligible activity pertains to ownership of
buildings, constituting a small fraction of the organization's
primary value creation. Nordic predominantly serves as
a facilitator of smarter solutions to tackle environmental
challenges through informed decisions through designing
chips that allow this. The ongoing evolution of this
standard is eagerly embraced to encompass a more
substantial representation of Nordic's diverse activities.

2023

Introduction
The EU taxonomy is a classification system designed
to assist companies and investors in identifying
environmentally sustainable economic activities, thereby
facilitating sustainable investment decisions. These
activities should make a substantial contribution to
at least one of the EU’s climate and environmental
objectives, while not significantly harming any of these
objectives and adhering to minimum safeguards.

Nordic's primary role is in making things smarter.
Smarter things pave the way for endless possibilities
in addressing current environmental challenges.
Nordic believes that an important part of the solution
is connecting with the resources around us, thereby
enabling smarter decision-making. Whether it's to
prevent waste, monitor and mitigate floods or other
hazards, track health parameters, or other critical
data points, smarter decisions can lead to a better
environment, enhanced security, and improved quality of
life.

The EU taxonomy is a standard currently under
development. Future iterations are expected. The current
scope of the standard does not include any activities
that encompass Nordic's profile as a facilitator of
smarter solutions to tackle environmental challenges
through informed decisions. Consequently, the activities
identified for reporting represent just a fraction
of Nordic's business. No activities impacting other
operating expenses or revenues have been identified
through the later elaborated screening process. One
activity related to capital expenditures has been
identified. The total balance value at 31st December
2023 related to this asset is USD 54.7 million, which
is 6% of the total asset value of USD 862.2 million.
The identified activity is number 7.7 - Acquisition and
ownership of buildings, under climate change mitigation
(section 7.7 of Annex I to Commission Delegated
Regulation (EU) 2021/2139. No further activities specified
in the regulation was found relevant for Nordic
activities during the screening. Nordic will in 2024
perform a screening of the activities relevant for the
non-climate environmental objectives, as implemented

into Norwegian legislation 5th of February 2024. The
majority of Nordic's business activities involve designing
connectivity chips that enable smart solutions through
a variety of applications. As a chip designer, Nordic has
outsourced the production process, meaning that very
few activities are maintained in-house related to actual
production. Nordic does not have exposure to any
nuclear- or fossil fuel-related activities as shown in Note
on exposure to nuclear and fossil gas related activities
table in the following.

Basis of preparation
Nordic is required to adhere to the EU Taxonomy
reporting requirements in accordance with
Regnskapsloven § 3-3c.. To this end, the Group has
conducted a thorough analysis of its business activities
within the taxonomy's environmental objectives. The
financial information presented has been prepared
in accordance with International Financial Reporting
Standards (IFRS) and reflects the economic activities
that fall within the scope of the EU taxonomy. This is
the first time that Nordic has adopted EU Taxonomy
reporting, therefore, comparable numbers are
not presented.

Reporting on capex
Nordic is reporting in accordance with Annex II of the
Commissioned Delegated Regulation (EU) 2021/2178
EU set forth in the table following for capex of
environmentally sustainable activities.

Accounting policy
Right-of-use assets recognized in accordance with IFRS
16 are considered to fall under the scope of the activity
"Acquisition and ownership of buildings." Group-specific
accounting principles are discussed in Note 14: Leases.

How numbers are determined and allocated
to numerator
Nordic has assessed that only certain Right-of-use
assets qualify as taxonomy-aligned. Lease contracts are
assessed on a location-by-location basis.

Contracts assessed and aligned with the standard are
included in the numerator of the CapEx KPI. Double
counting is avoided as the total CapEx is split into
separate contracts, which are assessed on a contract-by-
contract basis.

How numbers are determined and
allocated to denominator
In the denominator, Nordic applies the capitalized
value of all eligible and non-eligible activities. The total
capitalized value can be found as additions in Note 12:
Goodwill and intangible assets, Note 13: Fixed assets and
Note 14: Leases.

Assessment of regulatory compliance
Nordic recognizes the impact operations can have
on the environment and global emission targets. The
activity related to ownership of buildings can impact
such targets, and Nordic has attempted to engage in this
activity in as environmentally friendly way as possible.
Nordic do not possess locations in direct danger from
environmental risks such as floods, forest fires, or other
environmental dangers. As there are not identified any
climate related risks with the locations relevant for this
activity climate adaptation is not further assessed and
climate mitigation is the only assessed category.

First, the Group assessed whether its activities are
eligible under the EU taxonomy. This was done in
workshops where a thorough and extensive search of
activities defined in the Taxonomy were reviewed with
departmental representatives. After filtering out non-
relevant activities, the partially relevant activities were
assessed in detail. Through this process, one activity was
identified. The identified activity is 7.7 "Acquisition and
ownership of buildings." In connection with this activity,
capitalization of new and adjusted lease contracts
were assessed in the capex reporting. Secondly, it was
assessed if the respective contracts are aligned with
the Taxonomy requirements. In doing so, all capitalized
contracts were assessed in relation to substantial
contribution, doing no significant harm, and minimum
safeguard criteria. This assessment is presented in the
following section.

the United Nations Global Compact, adhering to the
United Nations Guiding Principles on Business and
Human Rights, following the OECD Guidelines for
Multinational Enterprises, respecting the International
Bill of Human Rights, and abiding by the fundamental
conventions set forth by the International Labour
Organization. The Group's approach to human rights
due diligence is in strict accordance with the UNGPs,
OECD guidelines, and the principles of transparency
as practiced in Norway. Further details on the
commitment to human rights and ethical business
conduct can be found in the relevant sections of the
Sustainability Report.

Contextual information about KPIs
The eligible activities account for 46% of the total
capitalization at Nordic. The total eligible activities
is split into, 9% aligned and 37% not aligned
activities. Nordic adheres to internal requirements
for promoting environmentally sustainable activities,
contrasting with public criteria that tend to be binary.
Additionally, Nordic considers the impact on other
environmental factors and economic considerations in
its sustainability efforts.

Information on assessment
A total of 11 lease contracts have been adjusted,
extended, or entered into in 2023 resulting in
capitalization. All material contracts are assessed in
detail in the presented figures in the tables following.

Nature of taxonomy-eligible and
taxonomy-aligned activities
The identified activity is "7.7 Acquisition and ownership
of buildings." Control over buildings means that Nordic
enters agreement with landlords in order to operate
office space, wherein Nordic can engage in the value-
added activities performed in the Group. When leasing
office locations one get access to buildings which Nordic
interpret as what is defined by this activity.

Substantial contribution
Since sustainability is an integral part of Nordic's
strategy, it also applies to leasing of office building
in support of the core activities. In both Oslo and
Trondheim, Nordic has leased newly constructed
buildings with, respectively, a BREEAM NOR level of very
good (Oslo) and excellent (Trondheim). This ensures a
lower Primary Energy Demand (PED) for performance
of core activities. The PED is the total primary energy
required to power the building. For Trondheim, this PED
is significantly lower than the threshold for a Nearly Zero
Energy Building (NZEB). An NZEB has very high energy
performance and is defined in the Energy Performance
of Buildings Directive for the EU. This defines thresholds
based on the PED to determine whether a building is
in line with the directive. In Oslo, the PED is still above
this threshold but lower than the site previously housing
Nordic's Oslo operations. Furthermore, since the leased
area is less than 5000 m2, two out of three substantial
contribution criteria for this activity do not apply to
Nordic's leased buildings.

Do no significant harm
For activity 7.7 only climate adaptation is relevant for
the do no significant harm criteria. All new buildings
in Norway must comply with the Norwegian building
regulation Tek-17, which dictates a high level of physical
and nonphysical solutions to reduce the most important

physical climate risks. It is also mandated as part of
the zoning process to conduct a risk and vulnerability
analysis. This analysis covers risks to the buildings in
Oslo and Trondheim over their lifetimes. Following this
analysis, Nordic has put several measures in place
to mitigate the risks facing the asset itself, as well as
people in and around the building. Nordic has also
chosen sites that are in already developed areas of the
city, so as not to disrupt any natural areas. This makes
it easier for employees to choose more climate- and
environmentally friendly means of transportation, such
as public transport, walking, or bike riding as part
of their daily commute. Following this, Nordic assess
that the activity in question is in compliance with
its Appendix A.

Minimum safeguards
To be deemed in alignment with the taxonomy,
economic activities must adhere to certain foundational
safeguards. At present, there is no legally enforceable
framework that specifies the evaluation or oversight
of compliance with these safeguards. Nordic bases
its self-assessment of conformity with these essential
safeguards on the recommendations detailed in the
“Final Report on Minimum Safeguards” issued by the
Platform on Sustainable Finance. Although this report
does not carry legal weight, it currently stands as the
most detailed guide for adhering to these safeguards.

The aforementioned report categorizes the compliance
criteria for these safeguards into four distinct areas:
Human Rights, Anti-Corruption, Tax Compliance, and
Competitive Fairness. Within each area, two specific
criteria are outlined. A company is deemed to be in
violation if it fails to meet either criterion.

After reviewing the specified criteria, it is clear that
Nordic comply with the minimum safeguard criteria for
the year 2023.

Nordic, as an international enterprise, is dedicated
to upholding and safeguarding the rights of all
stakeholders potentially affected by its commercial
activities. Nordic's commitment extends to supporting

Substantial Contribution Criteria

DNSH criteria ('Does Not
Significantly Harm')

C
o
d
e

(
2
)

A
b
s
o
u
t
e
O
p
E
x

(
3
)

P
r
o
p
o
r
t
i
o
n
o
f

O
p
E
x

(
4
)

l
i

m
a
t
e
C
h
a
n
g
e
M

i
t
i
g
a
t
i
o
n

(
5
)
*

l
i

m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n

(
6
)

W
a
t
e
r

(
7
)

P
o

l
l

u
t
i
o
n

(
8
)

C
i
r
c
u
a
r

E
c
o
n
o
m
y
(
9
)

Economic Activities (1) CCM7.7.

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1. Environmentally sustainable
activities (Taxonomy-aligned)

B
o
d
v
e
r
s
i
t
y
a
n
d
e
c
o
s
y
s
t
e
m
s

(
1
0
)

l
i

m
a
t
e
C
h
a
n
g
e
M

i
t
i
g
a
t
i
o
n

(
1
1
)

l
i

m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n

(
1
2
)

W
a
t
e
r

(
1
3
)

P
o

l
l

u
t
i
o
n

(
1
4
)

C
i
r
c
u
a
r

E
c
o
n
o
m
y
(
1
5
)

B
o
d
v
e
r
s
i
t
y
(
1
6
)

M
n
m
u
m
S
a
f
e
g
u
a
r
d
s

(
1
7
)

Taxonomy
aligned
proportion
of total
OpEx,
year N (18)**

Taxonomy
aligned
proportion
of turnover,
year N-1 (19)

Category
(enabling
activity)
(20)

Category
(transitional
activity)
(21)

OpEx of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)

A.2 Taxonomy-Eligible but not
environmentally sustainable
activities (not Taxonomy-aligned
activities)

OpEx of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)

Total (A.1+A.2)

CC7.7.

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

OpEx of Taxonomy-non-eligible
activities

Total (A+B)

234 681

100%

234 681

100%

2023

Substantial Contribution Criteria

DNSH criteria ('Does Not
Significantly Harm')

C
o
d
e

(
2
)

A
b
s
o
u
t
e
C
a
p
E
x

(
3
)

P
r
o
p
o
r
t
i
o
n
o
f

C
a
p
E
x

(
4
)

l
i

m
a
t
e
C
h
a
n
g
e
M

i
t
i
g
a
t
i
o
n

(
5
)
*

l
i

m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n

(
6
)

W
a
t
e
r

(
7
)

P
o

l
l

u
t
i
o
n

(
8
)

C
i
r
c
u
a
r

E
c
o
n
o
m
y
(
9
)

Economic Activities (1) CCM7.7.

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1. CapEx of environmentally
sustainable activities
(Taxonomy-aligned)

B
o
d
v
e
r
s
i
t
y
a
n
d
e
c
o
s
y
s
t
e
m
s

(
1
0
)

l
i

m
a
t
e
C
h
a
n
g
e
M

i
t
i
g
a
t
i
o
n

(
1
1
)

l
i

m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n

(
1
2
)

W
a
t
e
r

(
1
3
)

P
o

l
l

u
t
i
o
n

(
1
4
)

C
i
r
c
u
a
r

E
c
o
n
o
m
y
(
1
5
)

B
o
d
v
e
r
s
i
t
y
(
1
6
)

M
n
m
u
m
S
a
f
e
g
u
a
r
d
s

(
1
7
)

Taxonomy
aligned
proportion
of total
CapEx,
year N (18)**

Taxonomy
aligned
proportion
of turnover,
year N-1 (19)

Category
(enabling
activity)
(20)

Category
(transitional
activity)
(21)

Acquisition and ownership of
buildings (CapEx A)

CapEx of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)

A.2 Taxonomy-Eligible but not
environmentally sustainable
activities (not Taxonomy-aligned)

CapEx of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)

CC7.7.

7 965

8.9% 19%

CC7.7.

7 965

8.9%

CC7.7.

33 329

37.3%

Total (A.1+A.2)

41 294

46.2%

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

Capex of Taxonomy-non-eligible
activities

Total (A+B)

48 179

53.8%

8W9 473

100%

M
n
m
u
m
S
a
f
e
g
u
a
r
d
s

(
1
7
)

Taxonomy
aligned
proportion
of total
turnover,
year N (18)**

Taxonomy
aligned
proportion
of turnover,
year N-1 (19)

Category
(enabling
activity)
(20)

Category
(transitional
activity)
(21)

B
o
d
v
e
r
s
i
t
y
(
1
6
)

2023

Substantial Contribution Criteria

DNSH criteria ('Does Not
Significantly Harm')

B
o
d
v
e
r
s
i
t
y
a
n
d
e
c
o
s
y
s
t
e
m
s

(
1
0
)

l
i

m
a
t
e
C
h
a
n
g
e
M

i
t
i
g
a
t
i
o
n

(
1
1
)

l
i

m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n

(
1
2
)

W
a
t
e
r

(
1
3
)

P
o

l
l

u
t
i
o
n

(
1
4
)

C
i
r
c
u
a
r

E
c
o
n
o
m
y
(
1
5
)

Economic Activities (1) CCM7.7.

C
o
d
e

(
2
)

A
b
s
o
u
t
e

t
u
r
n
o
v
e
r

(
3
)

P
r
o
p
o
r
t
i
o
n
o
f
T
u
r
n
o
v
e
r

(
4
)

l
i

m
a
t
e
C
h
a
n
g
e
M

i
t
i
g
a
t
i
o
n

(
5
)
*

l
i

m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n

(
6
)

W
a
t
e
r

(
7
)

P
o

l
l

u
t
i
o
n

(
8
)

C
i
r
c
u
a
r

E
c
o
n
o
m
y
(
9
)

A. TAXONOMY-ELIGIBLE ACTIVITIES

A.1. Environmentally sustainable
activities (Taxonomy-aligned)

Turnover of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)

A.2 Taxonomy-Eligible but not
environmentally sustainable
activities (not Taxonomy-
aligned activities)

Acquisition and ownership
of buildings

Turnover of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)

Total (A.1+A.2)

CC7.7.

B. TAXONOMY-NON-ELIGIBLE ACTIVITIES

Turnover of Taxonomy-non-eligible
activities

Total (A+B)

542 869

100%

542 869

100%

2023

Note on exposure to nuclear and fossil gas related activities:

Row

Nuclear energy related activities

The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear
processes with minimal waste from the fuel cycle.

The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of
district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.

The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating
or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.

Fossil gas related activities

The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.

The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.

The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.

Concluding remarks

The parent company Nordic Semiconductor ASA has
a net deficit after tax of USD 16.0 million in 2023,
compared to a profit of USD 116.9 million in 2022.

The entire deficit is attributable to the equity holders
of the parent. Net deficit after tax corresponds with
ordinary earnings of USD -0.08 and fully diluted
earnings per share of USD -0.08 for 2023. This compares
to ordinary and fully diluted earnings per share in 2022
of USD 0.61 and 0.61, respectively.

Nordic pursues an ambitious long-term growth strategy
that 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 deficit of the parent
company is transferred to "Other equity", and that no
dividend is distributed for 2023.

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 19, 2024

Anita Huun

Board member

Birger Steen

Chair

Inger Berg Ørstavik

Board member

Snorre Kjesbu

Board member

Vegard Wollan

Chief Executive Officer

Annastiina Hintsa

Board member

Jon Helge Nistad

Anja Dekens

Morten Dammen

Board member, employee

Dieter May

Board member

Helmut Gassel

Board member

100

101

04
04

Financial statements

2023Responsibility statement Audit opinion letterAppendicesIncome statementsStatement of financial positionCash FlowDisclosuresAlternative Performance MeasuresMessage from the CEONordic at a glanceReport from the Board of Directors Financial statements050607010203042023

102

Income statement
for the year ended December 31

GROUP

2023

2022 Amount in USD 1000

542 869

776 734 Total Revenue

-259 157

-339 941 Cost of materials

283 712

436 793 Gross profit

-152 990

-161 440 Payroll expenses

-81 691

-69 685 Other operating expenses

-44 329

-44 067 Depreciation

4 702

9 726

-3 690

1 358

12 096

-4 447

7 650

161 602 Operating profit

6 205 Financial income

-1 270 Financial expenses

619 Net foreign exchange gains (losses)

167 155 Profit before tax

-44 817 Income tax expense

122 339 Net profit after tax

Attributable to:

7 650

122 339 Equity holders of the parent

0.04

2023

7 650

-37

-29

1 109

1 080

8 730

0.64 Ordinary earnings per share (USD)

0.63 Fully diluted earnings per share (USD)

2022 Statement of comprehensive income

122 339 Net profit after tax

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

-13 Income tax effect

Items that may not be reclassified to the income statement

-593 Currency translation differences

-593 Items that may be reclassified to the income statement

-532 Other comprehensive income

121 807 Total Comprehensive Income

Attributable to:

8 730

121 807 Equity holders of the parent

Note

7/8/12/22

9/13

13/12/14

10/25/26

10/14/25/26

10/25

PARENT

2023

508 026

-259 158

248 868

-61 443

-174 914

-33 710

-21 199

9 361

-3 364

1 362

-13 841

-2 116

-15 957

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

-15 957

116 942

2023

-15 957

2022

116 942

-37

-29

-13

-15 986

117 003

-15 986

117 003

202301020304050607Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statement Audit opinion letterAppendicesIncome statementsStatement of financial positionCash FlowDisclosuresAlternative Performance MeasuresStatement of financial position
as of December 31

GROUP

2023

2022 Amount in USD 1000

ASSETS

Non-current assets

2 284 Goodwill

26 608 Capitalized development expenses

11 655 Software and other intangible assets

4 554 Deferred tax assets

21 416 Right of use assets

35 603 Fixed assets

0 Investments in subsidiaries and joint ventures

0 Other long term assets

10 891

38 938

19 063

5 872

54 670

29 095

94 473

253 008 102 120

Total non-current assets

Current assets

163 090

133 316

102 091

Inventory

175 120 Accounts receivable

267 Current financial assets

21 874

290 957

609 237

862 245

17 539 Other current receivables

379 104 Cash and cash equivalents

674 121 Total current assets

776 241 TOTAL ASSETS

Note

2023

2022

PARENT

13/25/26

1/15

17/25/26

25/26

16/18/25/26

19/25/26

249

38 938

26 608

17 010

4 948

45 527

18 498

13 629

94 473

10 726

3 808

12 076

25 271

10 055

233 271

88 793

163 090

983

128 785

267 553

560 411

793 682

102 091

175 120

267

21 884

369 709

669 070

757 864

2023

103

2023

EQUITY

317

317 Share Capital

235 448

235 448 Share premium

366 312

347 779 Other components of equity

602 077

583 544 Total equity

LIABILITIES

Non-current liabilities

676 Pension liabilities

0 Borrowings

14 861 Non-current lease liabilities

15 537 Total non-current liabilities

Current liabilities

34 229 Accounts payable

43 758 Income taxes payable

6 455 Public duties

6 280 Current lease liabilities

86 439 Other current liabilities

177 160 Total current liabilities

192 697 Total liabilities

776 241 TOTAL EQUITY AND LIABILITIES

661

97 491

47 864

146 016

12 201

5 640

6 334

9 897

80 079

114 151

260 168

862 245

25/26

14/25/26

24/25/26

11/26

24/26

14/25/26

18/24/25/26

317

235 448

319 117

554 883

317

235 448

325 308

561 074

403

97 491

42 127

140 021

15 403

3 939

4 579

5 963

68 894

98 778

238 799

793 682

430

8 711

9 141

32 335

42 837

4 745

2 813

104 918

187 648

196 790

757 864

Oslo, March 19, 2024

Anita Huun

Board member

Birger Steen

Chair

Inger Berg Ørstavik

Board member

Snorre Kjesbu

Board member

Vegard Wollan

Chief Executive Officer

Annastiina Hintsa

Board member

104

Jon Helge Nistad

Anja Dekens

Morten Dammen

Board member, employee

Dieter May

Board member

Helmut Gassel

Board member

Nordic Semiconductor Group
Consolidated statement of changes in equity

Amount in USD 1000

Share capital

Treasury shares

Share premium

Other paid in
capital

Equity as of 01.01.2022

Net profit for the period

Other comprehensive income

Share based compensation

Option exercise

Equity as of 31.12.2022

Net profit for the period

Other comprehensive income

Share based compensation

Consideration shares in business combination (Note 27)

Equity as of 31.12.2023

Nordic Semiconductor Parent
Statement of changes in equity

Amount in USD 1000

Equity as of 01.01.2022

Net profit for the period

Other comprehensive income

Share based compensation

Option exercise

Equity as of 31.12.2022

Net profit for the period

Other comprehensive income

Share based compensation

Consideration shares in business combination (Note 27)

Equity as of 31.12.2023

105

317

-2

235 448

1 830

317

-2

-1

235 448

7 769

-4 240

5 359

6 660

3 141

15 160

Retained earnings

Total equity

Currency
translation
reserve

-806

-593

221 421

122 339

-1 399

343 820

1 109

7 650

-29

-290

351 442

602 077

458 209

122 339

-532

7 769

-4 240

583 544

7 650

1 080

6 660

3 141

Share capital

Treasury shares

Share premium Other paid in capital

Retained earnings

Total equity

317

-3

-2

-1

235 448

7 621

-4 240

3 456

6 652

3 141

13 250

204 853

116 942

321 856

-15 957

-29

440 690

116 942

7 621

-4 239

561 074

-15 957

-29

6 652

3 141

305 870

554 883

106

Statement of cash flows
for the year ended December 31

GROUP

2023

2022 Amount in USD 1000

12 096

-41 948

44 329

-41 153

6 548

-17

-1 379

9 726

Cash flows from operating activities

167 155 Profit before tax

-16 760 Taxes paid for the period

44 067 Depreciation and amortization

-74 594 Change in inventories, trade receivables and payables

7 794 Share-based compensation

104 Pension fund payments

-616 Interests paid

5 398 Interests received

-100 000

0 Prepayments

-7 987

10 165 Other operations related adjustments

-119 784

142 711 Net cash flows from operating activities

-25 529

-21 973

-6 000

Cash flows used in investing activities

-24 065 Capital expenditures (including software)

-6 489 Capitalized development expenses

0 Investment in subsidiaries

0 Business Combination, net of cash acquired

-53 502

-30 554 Net cash flows used in investing activities

Cash flows from financing activities

92 935

0 Proceeds from bond issue

-4 727 Cash settlement of options contract

-8 426

84 509

-6 609 Repayment of lease liabilities

-11 336 Net cash flows from financing activities

630

-1 049 Effects of exchange rate changes on cash and cash equivalents

-88 147

379 104

99 772 Net change in cash and cash equivalents

279 331 Cash and cash equivalents as of 1.1.

290 957

379 104 Cash and cash equivalents as of 31.12.

PARENT

Note

2023

2022

-13 841

159 405

-40 300

13/12/14

6/17/24/25

13/12

19/25

33 710

119 359

6 582

-27

-1 379

8 564

-100 000

-157 573

-144 906

-19 440

-21 973

-4 362

-15 967

36 966

-75 743

4 554

-46

-616

5 317

14 435

128 305

-17 038

-6 489

-45 775

-23 527

92 935

-4 411

88 524

-102 157

369 709

267 552

-4 727

-3 773

-8 500

96 279

273 430

369 709

107

Note 1: General 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.

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 more than 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.

Nordic Semiconductor has only one reportable
operating segment, and this corresponds with the
internal reporting structure and management activities
to monitor profitability. The revenue is broken down into
product markets and geographical areas in which its
distributors are located, see Note 5: Revenues.

The financial accounts were audited and approved
for publication by the Board of Directors on March 19,
2024, and will be presented for approval at the Annual
General Meeting on April 24th, 2024.

Note 2: Basis for preparation
2.1 Compliance with IFRS
The financial accounts for the Group have been
prepared in accordance with IFRS® Accounting
Standards as adopted by EU and Norwegian authorities,
and are effective as of December 31, 2023.

2.2 Accounting standards adopted in 2023
In 2023, there are few revisions by the International
Accounting Standards Board to the financial reporting
requirements in accounting policies. The Group has
adopted the following amendments:

Amendments to IAS 1 and IFRS Practice Statement
2 Disclosure of Accounting Policies

The amendments clarifies how to apply the concept
of materiality in deciding which accounting policies to
disclose in the financial statement. The amendments
are effective for annual periods beginning on or after
1 January 2023.

2.3 Basis for consolidation
The consolidated financial statements incorporate the
results, cash flows, and assets and liabilities of the
parent company Nordic Semiconductor ASA and its
wholly owned subsidiaries.

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

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

2.4 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.

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 consolidated financial statements are presented in
US dollars (USD), which is the functional currency of the
parent company. On consolidation, assets and liabilities
of foreign operations are translated into USD (the
presentation currency) 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.

108

Climate-related risks could give rise to events or
conditions that may cast significant doubt on Nordic’s
ability to continue as a going concern.

These events may arise from physical risks such as
destruction of production plants in a tropical cyclone
(i.e. hurricanes, typhoons, and resulting floods) or large
carbon footprint in manufacturing of components. This
could trigger, for example, halt in production, litigation
that results in significant penalties for exceeding
emission targets, shift in customer preferences that
results in loss of major customers, halts in ability to
obtain input material or customer productions stops
hindering stable revenue generation.

Nordic has secured it's liquidity reserves to meet short-
term obligations. According to the Group liquidity policy,
the total liquidity amount should equal at least one year
of total R&D expenses.

To conclude, the expected impact of climate-related
risks on the going-concern assessment is expected
to be low.

Note 3: Significant accounting judgments and critical
estimates
The preparation of financial statements requires that
management uses

■

judgements, apart from those involving estimations, in
the process of applying accounting policies that have
the most significant effect on the amounts reported in
the financial statements and its disclosures, and

■ estimates, including information about the key

assumptions concerning the future - and other key
sources of estimation uncertainty at the balance sheet
date - that have significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year.

The most important areas where judgements and
estimates have an impact are listed below. Detailed
information of these judgements and estimates are
disclosed in the relevant notes.

■ Calculation of 'Ship and Debit' rebate (see Note 5:

Revenues)

■ Fair value assessment used in testing for impairment of
goodwill (see Note 12: Goodwill and intangible assets)

■ Capitalization of development costs (see Note 12:

Goodwill and intangible assets)

Management bases its judgments and estimates
on historical experience and other factors, including
expectations on future events, deemed to be reasonable
and sensible given the specific circumstances. Estimates
are reassessed whether needed 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.

Note 4: Climate related risk
Cost of goods sold for sustainable solutions
Nordic see that customers and other stakeholders
care about the use of renewable energy solutions
in the value chain. Changes in attitude could
potentially impact the cost of production, such as
cost of investments in new production technologies
and renewable energy certificates. Nordic sees this
as a possibility to obtain new customers or enhance
cooperation with existing while also balancing pricing in
order to maintain margins and managing the risk of not
being able to comply with various requirements.

Impairment of inventories
One of Nordic's primary tangible assets in the balance
sheet is inventory. This is dispersed across a few large
warehousing locations. Some locations are exposed to
weather phenomena such as typhoons, heatwaves and
more, which can impact the value of Nordic's inventory.
However, Nordic has proper safeguards in place to
mitigate this risk, and considers the risk to be low.

Financing cost
Nordic has an undrawn sustainability linked RCF. The
interest is calculated as the aggregate of SOFR +
Margin + Credit adjustment spread. The applicable
Margin shall be adjusted based on the aggregate
number of KPI meeting their year-end KPI targets
each year.

The ESG indicators are :

■ Percentage of reduction of scope 2 emission

■ Percentage of increase of recycled plastic used

■ CDP rating

Going-concern assumption
Management consider the potential implications
of climate-related risks for their going-concern
assessment. Given the rapidly changing circumstances
(i.e environmental development, expectations from
stakeholders, laws and regulations), the management
has to consider and monitor going-concern on an
ongoing basis.

109

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.

5.2 Significant accounting judgments and
critical estimates
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:

“Ship and debit”
At the balance sheet date, the Group has to estimate
ship and debit on distributors inventory levels using the
expected value method. The Group estimate the refund
based on a average of historical discount to each
distributor and the expected sales mix to end-customers.
The ship and debit is recognized as reduction in revenue
and increase in refund liability. See note 5.5.

Note 5: Revenues
All figures in USD 1 000

5.1 Accounting policies
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 30-90 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 ship and
debit, product returns and end-customer rebates.

The parent company sells a large share of its products
to a related party for resale to the end customers
(the distributors). The transaction price and terms
between the related parties are established on an arm's
length basis, ensuring that the pricing is consistent
with what would be expected in transactions with
unrelated parties. In accordance with IFRS 15, revenue
is recognized when control of the goods is ultimately
transferred to the end customers (the distributors), which
occurs when the title to the goods passes to them.

'Ship and debit'
The Group sells products to certain distributors on “ship
and debit” terms. Ship and debit is an arrangement
between the Group and distributor where the distributor
may be entitled to a refund if the distributor sells the
products to end customer at lower prices than those
quoted on the distributor price list. The distributor claims
(debits) the Group for the price difference on sold
products on a monthly basis.

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.

Stock rotation provisions are made if necessary, based
on most likely amount method. The most likely amount
is the single most likely amount in a range of possible
consideration amounts. As the products have similar
margin, there are most likely no significant losses for
the Group when stock rotations are initiated. The Group
does not make provisions or adjustments to revenue for
stock rotation unless we expect the goods returned to
be obsolete.

End-customer 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
refund liabilities before payout by the end customer. See
note 5.5.

Assets and liabilities arising from rights of return
Right of return asset
The Group has no right to return inventories back
from customers.

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

5.3 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 2023, wireless components accounted for 99.1%
of sales versus 99.4% in 2022. In addition to standard components, the Group sells
customer-specific ASIC components (Application Specific Integrated Circuits) and
related Consulting Services.

Most of Nordic’s WiFi and PMIC customers are still in the development phase or in
early commercial phase. When WiFi and PMIC revenue materialize, Nordic will report
the revenue in the relevant end product areas.

GROUP

2023

2022 Revenue

302 486

483 799 Consumer

117 203

103 325

15 153

191 543 Industrial

67 623 Healthcare

29 163 Others

538 168

772 128 Wireless components

4 701

—

4 607 ASIC components

— Management fee

PARENT

2023

283 076

109 682

96 695

14 181

503 634

4 399

-9

2022

483 799

191 543

67 623

29 163

772 128

4 607

1 029

542 869

776 734 Total revenue from contracts with customers

508 026

777 763

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

GROUP

2023

59 933

120 571

362 365

542 869

2022

97 868 Europe

107 966 Americas

570 899 Asia/Pacific

PARENT

2023

56 086

112 833

339 107

2022

98 679

108 123

570 961

776 734 Total revenue from contracts with customers

508 026

777 763

110

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 2023, with 37% and
18% of total revenue respectively, one located in Asia and the other in the Americas. In
comparison, two distributors were above 10% of revenue in 2022, with 34% and 12% of
total revenue respectively, both distributors are in Asia.

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

GROUP

2023

2022

542 869

776 734 Goods transferred at a point in time

0 Services transferred over time

2023

2022

508 035

776 734

-9

1 029

542 869

776 734 Total revenue from contracts with customers

508 026

777 763

5.4 Contract balances
Trade receivables are non-interest bearing and are generally on terms of 30 to 90
days. See note 25 for further details.

GROUP

2023

133 316

2022

175 120 Trade receivables

5.5 Refund liabilities

GROUP

2023

30 010

25 294

2022

30 694 Refund liability – from ship & debit

23 382 Refund liability – from end-customer rebates

PARENT

2023

983

2022

175 120

PARENT

2023

—

2022

30 694

23 382

5.6 Performance obligations
A performance obligation refers to a commitment to deliver a distinct good or service
to a customer. The performance obligations for the sale of components are normally
satisfied upon the time of delivery. Payment is generally due 30 to 90 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 'right-to-invoice' practical expedient. This
means that the Group sidestep the need to determine the transaction price and
allocate it to unsatisfied or partially unsatisfied performance obligations. All
performance obligations are expected to be fully satisfied and recognized as revenue
within one year.

Note 6: Cost of materials / inventory
All figures in USD 1 000

6.1 Accounting policies
The Group applies standard cost method to measure cost of inventories. 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.
Obsolete inventory is written down completely.

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, costs directly related to the
conversion of materials into finished goods (sub-contracting, yield loss and production
overhead) and other costs incurred in bringing the inventories to their present location
and condition.

Nordic assess net realizable value for each inventory category: raw materials, work
in progress and finished goods separately as they have different useful life. Finished
goods is grouped in four main product categories with distinct technology: Proprietary,
Bluetooth, Wi-Fi, and cellular. Each of these four technologies are then divided into
subcategories where the different standardized chips with respective packaging is
shared among a variety of customers. On this category level, Nordic is applying the
practical expedient in IAS 2.29, stating that grouping of similar or related items with
a similar purpose or end use can be assessed together when assessing net realizable
value. Nordic is basing the net realizable value on orders from third parties, historical
inventory turnover ratio and other factors. This calculation is based on the most
updated facts at any given point in time but are prone to variation under changing
circumstances. One exception from regular calculation of net realizable value is related
to items that are made from older parts and cannot be easily sold to other customers.
These items are written off completely item by item if aging is more than 2 years.

6.2 Cost of materials / inventory

GROUP

2023

316 788

-60 999

3 368

259 157

95 043

9 907

58 139

2022

378 534 Purchased materials

-40 136 Changes in inventory

1 544 Scrapping inventory

339 941 Cost of materials

34 356 Raw materials

25 380 Work in Progress

42 355 Finished goods

PARENT

2023

316 788

-60 999

3 368

259 157

95 043

9 907

58 139

2022

378 534

-40 136

1 544

339 941

34 356

25 380

42 355

163 090

102 091 Total inventory

163 090

102 091

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

111

Note 8: Executive compensation
All figures in USD 1 000

Note 8.1: 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 24 April 2024, containing detailed information on remuneration to Executive
Management Team (EMT) for the reporting year 2023. The remuneration report
includes detailed information on EMTs remuneration complementing the numbers
presented below. This includes an overview of the operational, financial, environmental,
social and governance targets that form basis for the short-term incentives.

EMT members’ salaries and other benefits, including long term incentive plans are
presented in the table below. Unless otherwise stated, Nordic did not have any loans
to or guarantees made on behalf of any of the EMT members in 2023 and 2022.

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.

Note 7: Payroll expenses
All figures in USD 1 000

GROUP

2023

2022

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

115 380 Salary and vacation pay

28 335 Other compensation

11 704 Payroll tax

-424 Tax grant

10 898 Defined contribution pension

-4 453 Capitalized development expenses (hourly costs)

161 440 Total

1 311 Weighted average number of full time employees

126 961

18 845

14 759

-397

11 502

-18 680

152 990

1 481

GROUP

2023

2022

Employees as of December 31, are distributed as
follows:

631

318

113

612 Norway

322 Finland

115 Poland

49 India

57 USA

58 Taiwan

77 UK

41 Philippines

40 Sweden

28 China

15 Hong Kong

4 South Korea

4 Germany

4 Japan

3 The Netherlands

0 Denmark

2 Australia

4 Singapore

PARENT

2023

2022

53 728

12 937

9 217

-397

4 639

-18 680

61 443

620

57 004

15 448

8 692

-424

4 606

-4 453

80 872

647

PARENT

2023

631

2022

612

—

112

1 493

1 435 Total

640

662

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

2023

Svenn-Tore Larsen, CEO**

Pål Elstad, CFO/EVP Finance

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

Geir Langeland, EVP Sales & Marketing

Ole Fredrik Morken, EVP Supply Chain***

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

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

Salary

1 707

250

283

266

241

168

213

209

154

165

3 656

Salary

461

273

308

290

189

303

121

203

227

136

160

2 873

*Management compensation is paid in NOK. Exchange rate for 2023: 10.56 and 2022: 9.62

**CEO, Svenn-Tore Larsen resigned after 2023, the salary cost also includes after pay. Upon resignation Svenn-
Tore Larsen exited the here presented RSU/PSU agreements as part of the termination.

***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

113

Bonus

Options &
PSU**

RSUs &
PSUs

Other Comp.

Pension
expenses

—

Bonus

Options &
PSU**

185

112

118

—

958

—

-66

104

117

128

646

RSUs &
PSUs

267

124

140

150

—

103

Other Comp.

349

Pension
expenses

Total

1 716

397

450

440

351

262

322

329

192

222

4 681

Total

1 072

575

657

648

387

538

150

406

417

453

198

257

299

1 168

425

5 758

114

The Group has granted EMT members the following RSUs and performance shares (PSUs):*

EMT member

Svenn-Tore Larsen, CEO

Pål Elstad, CFO/EVP Finance

Katarina Finneng, EVP People & Communication

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**

Ståle Ytterdal, SVP IR & Strategic Sales

Kjetil Holstad, EVP Product Management

Ola Bostøm

Linda Petterson

*Overview of outstanding RSU and PSU for the respective EMT members are presented in the remuneration report

During 2023 the executives exercised the following RSU ans PSU:

Executives

Grant year

Number
of options
exercised

Share price
at time of
release
in NOK

Cash
payout in
USD 1000

Svenn-Tore Larsen, CEO

Pål Elstad, CFO/EVP Finance

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

Geir Langeland, EVP Sales & Marketing

Katarina Finneng, EVP People &
Communication

Ole Fredrik Morken, EVP Supply Chain**

Ola Bostrøm, SVP Quality & Sustainability

Ståle Ytterdal, SVP IR & Strategic Sales

Kjetil Holstad, EVP Product Management

2020 RSU

2020 PSU

2020 RSU

2020 PSU

2020 RSU

2020 PSU

2020 RSU

2020 PSU

2020 RSU

2020 PSU

2020 RSU

2020 PSU

2020 RSU

2020 PSU

2020 RSU

2020 PSU

2020 RSU

2020 PSU

10 621

19 119

6 345

11 422

7 172

12 911

6 621

11 918

5 241

9 434

5 241

9 434

1 704

—

4 414

7 946

4 276

7 697

113.17

—

113.17

*The RSU for management vest after three years for management two years for employees

**Purchased shares, no cash payout from the company

114

205

122

138

128

101

—

2023

2022

9 184 RSUs

4 520 RSUs

3 769 RSUs

5 110 RSUs

4 783 RSUs

—

3 439 RSUs

2 955 RSUs

4 332 RSUs

2 946 RSUs

2 823 RSUs

9 184 PSUs

4 520 PSUs

3 769 PSUs

5 110 PSUs

4 783 PSUs

—

3 439 PSUs

2 955 PSUs

4 332 PSUs

2 946 PSUs

2 823 PSUs

6 532 RSUs

3 193 RSUs

2 662 RSUs

3 609 RSUs

3 379 RSUs

2 111 RSUs

2 429 RSUs

2 087 RSUs

2 380 RSUs

6 532 PSUs

3 193 PSUs

2 662 PSUs

3 609 PSUs

3 379 PSUs

2 111 PSUs

2 429 PSUs

2 087 PSUs

2 380 PSUs

Note 8.2: Board remuneration

Total compensation expensed for Board Members*

Birger Steen, Chair

Inger Berg Ørstavik, Board Member

Endre Holen, Board Member

Snorre Kjesbu, 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)

2023

126

2022

165

—

Total

466

659

*Numbers noted in USD and converted from NOK using USD/NOK rate of 10.56 for 2022 and 9.62 for 2022

Note 9: Other operating expenses
All figures in USD 1 000

Note 10: Net financial items
All figures in USD 1 000

GROUP

PARENT

GROUP

PARENT

2023

31 374

22 360

3 140

1 748

11 746

-70

-3 293

2 712

11 974

—

2022

24 837 Service and maintenance

17 422 Other consultancy fees

2 301 Office expenses

1 956 Office equipment

11 401 Material and components

-57 Tax grant

-2 034 Capitalized development expenses

3 585 Travel and meeting expenses

10 274 Other operating expenses

— Other operating expenses intercompany

81 691

69 685 Total other operating expenses

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

GROUP

2023

2022

159

—

230

109 Audit services

14 Other attestation Services

4 Tax advisory Services

— Other Non Audit service

128 Total revenues

2023

29 094

15 470

1 349

1 201

8 747

-70

-3 293

1 262

10 751

110 402

174 914

2022

23 222

12 318

1 088

1 246

9 720

-57

-2 036

1 799

8 448

110 581

166 328

PARENT

2023

2022

119

—

181

—

107

2023

9 670

9 726

1 550

756

1 384

3 690

1 358

7 394

2022

5 230 Interest income

972 Other financial income

6 202 Financial income

621

Interest expenses on lease liabilities

— Bond interest expense

646 Other financial expense

1 267 Financial expense

619 Foreign exchange gain(loss)

5 554 Net financial

2023

9 313

9 361

1 229

756

1 380

3 365

1 362

7 358

2022

5 203

968

6 171

478

—

616

1 094

672

5 749

Note 11: Tax
All figures in USD 1 000

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

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 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.

Grants received, including those for R&D, are often in the form of tax refunds and are
classified as operating grants. These operating grants are recognized in the financial
statements concurrently with the expenses they are intended to offset. Tax refunds are
typically accounted for as a reduction in payroll expenses, as detailed in Note 7.

However, in some jurisdictions, there are tax incentives that reduce taxable income
or tax rate. These are treated as income tax, and is recognized as a reduction in tax
expense rather than as government grants.

The accounting for such incentives is in accordance with the relevant tax laws and
accounting standards applicable in the respective country.

115

GROUP

11.2 Tax

GROUP

2023

6 339

-1 892

4 447

GROUP

2022 Tax consists of

43 723 Current tax expense

1 094 Change in deferred tax

44 817 Tax expense (income)

2023

2022 Reconciliation of nominal and actual tax expense

-12 096

-167 155 Profit before tax

2 661

-702

1 256

—

-2 646

-1 082

4 960

—

-42 Differences due to different tax rates

-518 Non taxable income/non deductible expenses

-726 Credit for tax paid

— Tax incentives

265 Adjustment previous years

9 064 Currency translation differences

— Other items

4 447

44 817 Total tax expense (income)

2023

3 366

-1 251

2 116

2022

41 151

1 312

42 463

PARENT

2023

13 841

2022

-159 405

—

360

—

-392

5 193

—

2 114

-42

-1 527

-98

—

9 061

—

42 463

36 774 Computed tax at parent's nominal tax rate of 22%

-3 045

35 069

Deferred taxes:

Inventory

Fixed Assets

Right-of-use assets

Lease liabilities

Social security tax (RSUs)

Pension obligation

Financial instruments

Accruals

Balance sheet

Income
statement

31.12.2023

31.12.2022

2023

751

4 188

-10 394

10 606

130

—

202

757

3 267

-2 438

-17

-1 167

8 031

2 616

-8 071

—

341

145

-57

120

2022

600

-1 178

-458

313

1 547

-3

—

212

Deferred tax benefit - gross

5 890

4 637

-1 985

1 033

Gain and loss account

Net other tax-obligations

Financial instrument

Deferred tax obligation - gross

Currency effect of translation to USD

—

-161

-82

-21

Net deferred tax benefit (obligation)

5 872

4 554

Other. Comp.
income

2023

2022

—

-8

—

-8

—

Deferred tax expense (income)

-1 892

1 094

-8

The Group has not recognized net deferred tax benefit of USD 2.799m related to the
subsidiary in Poland and USD 135 related to the subsidiary in India.

2023

116

117

PARENT

Deferred taxes:

Inventory

Fixed Assets

Leasing

Social security tax (RSUs)

Pension obligation

Financial instrument

Accruals

Balance sheet

Income
statement

31.12.2023

31.12.2022

2023

751

3 774

209

130

—

2022

600

757

-17

2 836

-1 026

-1 008

173

-42

145

-57

-140

1 547

-3

240

Deferred tax benefit - gross

4 967

3 891

-978

1 236

Gain and loss account

Net other tax-obligations

Financial instrument

Deferred tax obligation - gross

Currency effect of translation to USD

—

276

281

-161

-85

-9

Net deferred tax benefit (obligation)

4 948

3 808

Other. Comp.
income

2023

2022

—

-8

—

-8

—

Deferred tax expense (income)

-1 251

1 312

-8

GROUP

2023

4 554

1 892

-582

5 872

GROUP

2022 Reconciliation of net deferred tax obligation

6 331 Opening balance as of 1.1

-1 083 Tax expense recognized in the P&L

-13 Tax expense recognized in OCI

-681 Currency effect from translation to USD

PARENT

2023

3 808

1 251

-119

4 554 Net deferred tax benefit (obligation) as of 31.12

4 948

2022

5 748

-1 312

-13

-615

3 808

PARENT

2023

2022 Net deferred tax recognized in OCI as of 31.12

2023

2022

-8

13 Net gain on actuarial gains and losses

13 Total tax expense (income) in OCI

-8

Note 12: Goodwill and intangible assets
All figures in USD 1 000

12.1 Accounting policies
Goodwill
Goodwill acquired in business combinations is carried at cost as established at the
acquisition date. Goodwill, an asset with indefinite useful life, is not amortized and is
tested annually for impairment. Goodwill is allocated to the cash generating unit.

A cash generating unit (CGU), is the smallest group of assets that generates cash
inflows 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.

Testing for impairment is done by comparing recoverable amount and carrying amount
of the same groups of cash-generating units as to which goodwill is allocated. If the
carrying amount exceeds its recoverable amount, an impairment loss is recorded. The
impairment loss first reduces goodwill and then allocated to other assets of the CGU.
Impairment of goodwill may not be reversed.

Intangible assets
Intangible assets, including capitalized development expenses and other intangible
assets are measured initially at cost. Subsequently, the intangible assets are measured
at cost less accumulated amortization. The assets, with finite useful life, are amortized
on a straight-line basis over the asset's estimated useful lives. 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.

The costs of an internally generated intangible asset is the sum of expenditures (labor
and materials) and incurred from the time all requirements for capitalization are
met and until the time the asset is transferred to production (TTP). Costs expensed
in prior accounting periods will not be capitalized. Research costs incurred after TTP
is typically related to maintenance of the asset. These costs are recognized as an
expense as the requirement to demonstrate increased economic benefits are not met.
Amortization begins when the product is transferred from development to production,
and the amortization period is over its estimated useful life, normally 1-5 years. Each
development project is reviewed annually to ensure that the recognition criteria are still
met. If the criteria are no longer met, then the impairment loss is immediately recorded
in the income statement.

118

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 over its estimated useful life, normally
3-10 years. Other intangible assets with a finite useful life are tested for impairment
whenever there is an indication that their carrying amounts may not be recoverable.

12.2 Significant accounting judgments and critical estimates
Goodwill
Nordic allocates and monitors Goodwill on an operating segment level since the group
comprises only one operating segment. As a result, the assessment for impairment of
Goodwill is conducted for the group as a whole. Nordic's approach involves evaluating
fair value rather than value in use. Upon examining the market value of equity as of
December 31 and comparing it to the book value of equity, it becomes evident that
Goodwill and net operating-related assets could be sold for an amount significantly
higher than their book values.

Valuation

Market value

Book value

Value

2 387 881

602 077

Capitalization of development costs
Determining whether development costs shall be capitalized involves the use of
judgement by management. The company has to demonstrate all of the following:

■ 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 economic benefits;

■ Sufficient technical, financial and other resources for project completion are in place

Key factors in management judgment is whether a product design meet specific
functional and economic requirements. Factors to consider are development/technical
risk, existence of a market for the product and its market share. The company evaluate
theses criteria in relation to each specific project. Projects related to new product
developments are generally more difficult to substantiate than projects in which the
company has more experience. Before mass production, the company do extensive
testing on the products to evaluate their quality and functionality and send prototype
samples to customers. The expected period of benefits is also dependent on the future
technological development in the market.

12.3 Goodwill and intangible assets

GROUP

2023

Acquisition cost

Opening balance

Additions

Additions from business combinations

Disposals

Acquisition cost as of 31.12

Accumulated depreciation

Opening balance

Amortization expenses

Disposals

Accumulated amortization as of 31.12

Net carrying value as of 31.12

PARENT

2023

Acquisition cost

Opening balance

Additions

Disposals

Acquisition cost as of 31.12

Accumulated depreciation

Opening balance

Amortization expenses

Disposals

Accumulated amortization as of 31.12

Net carrying value as of 31.12

Estimated useful life

Depreciation method

GROUP

R&D expenses:

91 689 Personnel expenses

45 476 Other operating expenses

137 165 Total cost recognized in income statement

159 138 Total cost for R&D (incl. capitalized development cost)

Software and other
intangible assets

Capitalized development
expenses

Goodwill

31 121

11 520

2 090

—

44 731

19 466

6 202

—

25 668

19 063

57 015

21 973

—

78 986

30 408

9 644

—

40 051

38 938

2 284

8 557

—

10 891

—

10 891

Software and other
intangible assets

Capitalized development
expenses

Goodwill

28 839

11 378

40 218

18 114

5 094

—

23 208

17 011

57 015

21 973

78 988

30 408

9 644

—

40 051

38 938

249

—

249

—

249

3 - 10 years

Straight-line

1 - 5 years

Straight-line

No depreciation

Total

90 421

33 544

10 647

—

134 612

49 874

15 846

—

65 719

68 892

Total

86 103

33 351

—

119 454

48 522

14 738

—

63 259

56 197

PARENT

34 641

36 386

71 027

93 000

119

120

GROUP

2022

Acquisition cost

Opening balance

Additions

Acquisition cost as of 31.12

Accumulated depreciation

Opening balance

Amortization expenses

Accumulated amortization as of 31.12

Net carrying value as of 31.12

PARENT

2022

Acquisition cost

Opening balance

Additions

Acquisition cost as of 31.12

Accumulated depreciation

Opening balance

Amortization expenses

Accumulated amortization as of 31.12

Net carrying value as of 31.12

Estimated useful life

Amortization 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

31 121

35 132

7 068

19 466

11 655

80 019

6 489

57 015

48 477

11 423

30 408

26 608

2 386

-102

2 284

—

2 284

133 302

9 296

90 424

83 609

18 492

49 874

40 547

Software and other
intangible assets

Capitalized development
expenses

Goodwill

Total

49 387

2 135

28 839

34 155

6 642

18 114

10 726

80 017

6 489

57 015

48 476

11 423

30 408

26 608

249

—

249

—

249

129 654

8 624

86 103

82 631

18 065

48 522

37 583

3 - 10 years

Straight-line

1 - 5 years

Straight-line

No depreciation

PARENT

40 232

29 209

69 441

75 930

Impairment of intangible assets
There have been no indications of possible impairment related to intangible assets
during the current reporting period.

Change in estimate with respect to useful life
The useful life of the intangible assets have been reviewed during the year.
Management has evaluated the current useful life estimates as appropriate.

Note 13: Fixed assets
All figures in USD 1 000

13.1 Accounting policies
Property, plant and equipment are measured at cost less accumulated depreciation
and impairment losses, if any. The assets are depreciated on a straight-line basis over
its estimated useful lives.

Expenditures classified as repair and maintenance costs are expensed when incurred.

13.2 Fixed assets

GROUP

2023

Opening balance

Additions

Additions from business combinations

Acquisition cost as of 31.12

Opening balance

Depreciation expenses

Currency translation differences

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

PARENT

2023

Opening balance

Additions

Disposals

Acquisition cost as of 31.12

Opening balance

Depreciation expenses

Disposals

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

121

Expenditures that increase the value of the fixed asset are capitalized and depreciated
over the remaining useful life of the fixed asset.

The assets’ residual value and useful life are reviewed annually.

At the end of each reporting period, the Group assess whether there is any indication
that an fixed assets may be impaired. The recoverable amount of the fixed assets are
normally estimated on a stand-alone basis.

Office and lab
equipment

Computer
equipment and
machinery

Fixture and fittings

Property

Total

39 843

6 823

46 687

24 845

8 110

481

33 436

13 251

44 673

5 017

49 703

26 138

11 097

158

37 393

12 309

6 138

707

6 858

2 448

1 187

3 656

3 202

333

—

333

—

333

Office and lab
equipment

Computer
equipment and
machinery

Fixture and fittings

Property

18 262

2 915

—

21 177

12 212

3 512

—

15 724

5 453

40 555

4 538

-12

45 080

23 127

10 751

-5

33 873

11 208

2 977

861

-259

3 578

1 517

571

-14

2 074

1 504

333

—

333

—

333

90 987

12 546

103 580

53 431

20 389

660

74 480

29 095

Total

62 126

8 313

-271

70 167

36 856

14 835

-19

51 672

18 498

GROUP

2022

Opening balance

Additions

Disposals

Acquisition 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

Acquisition cost as of 31.12

Opening balance

Depreciation expenses

Disposals

Accumulated depreciation as of 31.12

Net carrying value as of 31.12

GROUP AND PARENT

Estimated useful life

Depreciation method

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

Office and lab
equipment

Computer
equipment and
machinery

Fixture and fittings

Property

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

3 - 5 years

Straight-line

3 - 4 years

Straight-line

5 469

771

-3 262

2 977

3 404

577

-2 465

1 517

1 460

5 years

333

—

333

—

333

Straight-line

No depreciation

Total

111 035

20 892

-40 939

90 989

77 149

19 256

-41 020

55 384

35 603

Total

93 174

14 903

-45 950

62 126

64 349

15 313

-42 807

36 855

25 271

Total depreciation expenses consist of depreciation of fixed assets and depreciation of
intangible assets (Note 12: Goodwill and intangible assets).

Impairment
There have been no indications of possible impairment related to fixed assets during
the current reporting period.

122

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 carrying amount.

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

Change in estimate with respect to useful life
The useful life of the fixed assets have been reviewed during the year. Management
has evaluated the current useful life estimates as appropriate.

Note 14: Leases
All figures in USD 1 000.

14.1 Accounting policies
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 (RoU) assets representing the
right to use the underlying assets.

Right-of-use assets
The Group recognizes RoU assets at the commencement date of the lease (i.e., the
date the underlying asset is available for use). RoU assets are measured at cost,
less any accumulated depreciation and impairment losses. The cost of RoU 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. RoU assets are depreciated on a straight-line basis over the lease term.

At the end of each reporting period, the Group assess whether there is any indication
that an RoU asset may be impaired.

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.

In calculating the present value of lease payments, the Group uses its incremental
borrowing rate (IBR) at the lease commencement date because the interest rate implicit
in the lease is not readily determinable. 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 subsidiary's stand-alone credit rating).

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.

14.2 Leases
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 14 years. Equipment and machinery
leases range between 1 to 5 years. Vehicles are leased for less than 3 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. In calculating lease liability, the option to extend the lease term
of the lease have not been included. The Group could replace the lease assets without
significant cost or business disruption.

The Group also has certain leases with lease terms of 12 months or less and leases
with low value. The Group applies the "short-term lease" and "lease of low-value assets"
recognition exemptions for these leases.

In 2023, Nordic Semiconductor ASA signed an office rental agreement in Oslo with an
commencement date of 1 June 2023 and an office rental agreement in Trondheim with
a commencement date of 1 November 2023. Nordic Semiconductor ASA also agreed to
extend lease terms for 10 years on existing lease agreement in Trondheim.

In 2023, Nordic Semiconductor UK Limited signed an office rental agreement in Bristol
with an expected commencement date of 12 February 2024. There has been a delay in
the office move due to circumstances beyond the company's control.

123

Below is the contractual cash flow of leases with commencement date after balance
sheet date:

GROUP

Office space

Office equipment

Short-term leases

Total

PARENT

Office space

Office equipment

Short-term leases

Total

Carrying
amount

Contractual
cash flow

Less than
one year

One to five
years

More than
five years

—

4 995

431

5 428

782

870

3 618

344

—

3 962

596

—

596

Carrying
amount

Contractual
cash flow

Less than
one year

One to five
years

More than
five years

—

431

—

431

—

344

—

344

—

Minimum lease payments payable on leases are presented in note 26.

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

GROUP

31.12.2023

31.12.2022 Right of use assets

54 670

21 416 Office space

21 416 Total

GROUP

31.12.2023

31.12.2022 Lease liabilities

9 897

47 864

57 762

6 280 Current

14 861 Non-Current

21 141 Total

PARENT

31.12.2023 31.12.2022

45 527

12 076

PARENT

31.12.2023 31.12.2022

5 963

42 127

48 090

2 813

8 711

11 524

GROUP

2023

28 826

12 468

—

2022

8 843 Additions to right-of-use assets

109 Adjustments to right-of-use assets

— Disposals to the right-of-use assets

PARENT

2023

25 761

11 827

—

2022

1 011

266

-534

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

GROUP

PARENT

2023

8 094

—

8 094

1 597

405

735

10 831

9 567

2022 Depreciation of right-of-use assets

5 974 Office space

162 Office equipment and machinery

6 135 Total depreciation

621

Interest expense

513 Expenses relating to short-term leases

644 Expenses relating to leases of low-value assets

7 914 Total amount recognized in profit and loss

7 766 The total cash outflow for leases

2023

4 138

—

4 138

1 229

138

293

5 798

4 842

2022

3 427

162

3 588

478

235

303

4 603

4 311

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

GROUP

Cash flow information for lease liabilities

PARENT

21 141 Net liabilities as at 1 January 2023

-8 426 Lease payments

41 294 Acquisitions and adjustments

— Disposals

1 597 Interest

2 156 Foreign exchange adjustments

57 762 Net liabilities as at 31 December 2023

11 524

-4 410

37 588

—

1 229

2 159

48 090

124

Note 15: Investments in subsidiaries and joint ventures
All figures in USD 1 000

Note 15.1: Subsidiaries
The following subsidiaries have been included in the financial statements:

■ All intellectual property (IP) is owned by Nordic Semiconductor ASA, which is the

ultimate parent company of the Group. All intercompany transactions are conducted in
accordance with 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.

Established
Year

Location

Share
Ownership

Voting
Rights

■ Nordic Semiconductor Poland Sp. z.o.o. is an extension of the software development

team in the parent company.

Subsidiaries consolidated in

Nordic Semiconductor Inc

Nordic Semiconductor Poland S.P z o.o

Nordic Semiconductor Finland OY

Nordic Semiconductor 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 2023

Ownership

Share of
votes

Net profit
2023

Equity 31.
Dec 2023

Nordic Semiconductor Inc, USA

Nordic Semiconductor Poland S.P z o.o

Nordic Semiconductor Finland OY

Nordic Semiconductor 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%

1 630

5 047

4 439

207

1 503

432

504

282

11 611

248

5 181

8 623

22 584

134

150

7 666

3 792

1 965

1 287

250

531

11 847

251

125

■ 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 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 the APAC

region, distributing the Group's products.

■ 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, supply chain and support

company. The R&D team in the Philippines is working across all technologies, and works
closely alongside the rest of the R&D teams in the Group.

126

Note 18: Intercompany
All figures in USD 1 000

PARENT

Loans to group companies

Receivables group companies

Total receivable

Accounts payable, group companies

Total payables

PARENT

Sale of goods

Service fee for management services

Total revenue

Cost of goods sold

Total cost of goods sold

Service fee for R&D and product promotion

Total other operating expenses

Interest income from loans to group companies

Total financial income

2023

6 145

105 406

111 551

55 148

2023

521 464

—

521 464

268 237

110 402

371

2022

—

10 486

31 994

2022

—

1 029

—

110 581

—

Note 15.2: Joint ventures
Nordic Semiconductor ASA has a 20 % ownership in Quintauris GmbH. The investment
is accounted for in accordance with the equity method. The carrying value of joint
ventures are USD 6m at December 31, 2023

Note 16: Other long term receivables
All figures in USD 1 000

Nordic Semiconductor ASA has entered an capacity reservation agreement with a
wafer manufacturer. The company is committed to purchase wafers according to a
purchase reservation plan for the period Q4-2023 to Q2-2027.

Nordic has paid USD 100m to secure the quarterly reservation. The prepayment is every
quarter settled against committed wafer orders.

The balance of the prepayment as of December 31, 2023 is USD 100m, where USD
94.5m is classified as Other long term assets and USD 5.5m is classified as Other
current receivables. A partial value of committed wafers not ordered can be expensed
depending on agreement terms.

See note 17.1 for information about the impairment assessment.

Note 17: Accounts receivable
All figures in USD 1 000

17.1 Accounting policies
Impairment of financial assets
For accounts receivables, 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.

See note 26 for further information.

17.2 Accounts receivable

GROUP

2023

133 316

—

2022

175 120 Gross receivables

— Provision for doubtful accounts

133 316

175 120 Accounts receivable, net

PARENT

2023

983

—

983

2022

175 120

—

175 120

Note 19: Cash and cash equivalents
All figures in USD 1 000

19.1 Accounting policies
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. In 2023, the Group derecognized the
short-term bank deposits.

19.2 Cash and cash equivalents

GROUP

2023

2022

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

189 853

277 700 Cash at bank

2 372

—

98 731

2 479 Restricted cash (withholding tax account)

50 467 Short-term bank deposits

48 458 Money market funds

290 957

379 104

Cash and cash equivalents in statement of
financial position

PARENT

2023

2022

166 449

277 690

2 372

—

98 731

2 479

50 467

48 458

267 553

379 096

■ 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 26: Financial risk management.

127

Note 20: Share capital and shareholder information
20.1 Accounting policies
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.

20.2 Share capital and shareholder information
Share capital
The share capital in Nordic Semiconductor as of December 31, 2023 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 during the year

Holdings as of 31.12

Dividend
No dividend was paid during 2023.

Treasury shares
The company owned 382,102 treasury shares on December 31, 2023. On January 1,
2023, the company owned 1,206,513 treasury shares. Based on a resolution of the
annual general meeting of April 20, 2023, 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 2024, and by June 30, 2024 the latest. On February 5, 2024,
the board authorized the Company to commence a share repurchase program based
on the aforementioned resolution of the annual general meeting. The purpose of the
program is to have available shares to settle the company's obligations under the
Employee long-term equity linked incentive programs.

Long-term incentive plan
With reference to the annual general meeting, on April 20, 2023, 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, 2023 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.

128

Number of shares

Share capital
(USD 1000)

Treasury shares
(USD 1000)

Share premium
(USD 1000)

2023

2022

2023

2022

2023

2022

2023

2022

192 781 600

—

192 781 600

317

—

317

—

317

-2

-1

-3

-2

235 448

—

235 448

Shareholder

DNB Asset Management AS

Accelerator Limited

Capital Research and Management Company

Folketrygdfondet

Hardman Johnston Global Advisors LLC

The Vanguard Group, Inc.

Danske Bank Investment Management

Invesco Advisers, Inc.

BlackRock Fund Advisors

RBC Global Asset Management (UK) Limited

Eika Kapitalforvaltning AS

Alfred Berg Kapitalforvaltning AS

Skandia Fonder AB

Swedbank Robur Fonder AB

Robeco Institutional Asset Management B.V.

KLP Kapitalforvaltning AS

E. Öhman J :or Fonder AB

Svenn Tore Larsen

Alden AS

TTC Invest AS

Total for the 20 largest shareholders

Other shareholders

Total shares outstanding

Percentage

19 780 570

17 472 950

16 965 562

15 286 953

7 275 215

6 926 324

5 144 263

5 090 355

4 621 010

3 982 945

3 626 198

3 442 656

3 134 377

2 980 000

2 903 864

2 369 838

2 001 406

1 947 142

1 850 000

1 772 000

128 573 628

64 207 972

192 781 600

10.3%

9.1%

8.8%

7.9%

3.8%

3.6%

2.7%

2.6%

2.4%

2.1%

1.9%

1.8%

1.6%

1.5%

1.2%

1.0%

0.9%

66.7%

33.3%

100.0%

*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.

Shares held by the Board of Directors and Executive Management were as follows as
of December 31, 2023:

Board of Directors

Birger Steen

Anita Huun

Inger Berg Ørstavik

Annastiina Hintsa

Snorre Kjesbu

Jon Helge Nistad

Anja Dekens

Morten Dammen

208 745

13 919

5 919

4 919

661

749

433

1 953

Executive Management Shares

Svenn-Tore Larsen

Geir Langeland

Ole Fredrik Morken

Ståle Ytterdal

Ola Bostrøm

Pål Elstad

Svein-Egil Nielsen

Kjetil Holstad

Linda Pettersson

Katarina Finneng

1 947 142

219 653

205 345

141 632

3 511

49 417

42 285

16 401

4 337

Total

237 298

Total

2 629 723

Note 21: 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)

2023

7 650

192 085

0.04

7 650

193 350

0.04

2022

122 339

191 365

0.64

122 339

192 739

0.63

The number of shares was as follows:
Date

01.01.2023

31.12.2023

Opening balance

Closing balance

Shares issued

Shares outstanding

192 781 600

191 575 087

192 399 498

Options and Restricted Stock Units ("RSUs" granted to employees are considered to
be potential ordinary shares. They have been included in the determination of diluted
earnings per share. The options and RSUs have not been included in the determination
of basic earning per share. Details relating to the options are set out in note 23.

129

Note 22: Pensions
Defined benefit plan
The total pension liability from defined benefit plans was USD 660,895 for the Group.
This amount consists of liabilities in Norway, the Philippines, Poland and India.

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.

Nordic has set up a pension plan for the the Philippines 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 2023 the pension liability was USD 210,944.

In Finland, earnings-related pensions are financed with insurance contributions paid
by employers and employee. In Poland, the employers and employee contribute to
a social security plan including pensions and disability insurance. In addition, the
company offers a employee capital plan (PPK) financed jointly by the employee, the
employer and the government.

In India, the company provides for gratuity, a defined benefit plan (the “Gratuity Plan”)
covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The
amount of gratuity payable on retirement/termination is the employees last drawn
basic salary per month computed proportionately for 15 days salary multiplied for the
number of years of service.

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 2023, the cost of the defined contribution
pension was USD 380,865, and the plan had 708 members.

The Indian company has a defined contribution plan namely provident fund.
Contributions are made to provident fund at the rate of 12% of eligible salary as per
regulations. The contributions are made to registered provident fund administered by
the Government. The obligation of the Company is limited to the amount contributed
and it has no further contractual nor any constructive obligation.

In Poland, each employees who get retired are entitled to retirement and pension
severance pay from employer. This is regulated by the Polish Labor Code.

130

Note 23: Long-term incentive plans
23.1 Accounting policies
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 23.2.

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).

Social security tax is accrued over the vesting period based on the actual value of the
stock unit.

23.2 Long-term incentive plans
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.

With reference to the Annual general meeting held on April 20, 2023, Nordic
Semiconductor, on July 12, 2023, granted 1,002,323 RSUs and performance shares to
employees, including management. The shares vest over two and three years. The
Annual General Meeting of Nordic Semiconductor ASA approved the issue of RSUs
and Performance Shares of an aggregate nominal value of up to 1% of the company’s
outstanding share capital.

A summary of share options transactions during 2023 and 2022
below:

2023

2022

Outstanding options 1.1

Granted

Forfeited

Exercised

Expired

Outstanding options 31.12

Of which exercisable

—

545 203

—

705

544 498

—

A summary of RSUs transactions during 2023 and 2022 below:

2023

2022

Outstanding RSUs 1.1

Granted

Forfeited

Released

Outstanding RSUs 31.12

A summary of performance shares during 2023 and 2022 below:

Outstanding performance shares 1.1

Granted

Forfeited

Performance adjusted

Released

Outstanding performance shares 31.12

1 002 504

1 058 947

958 462

146 600

409 801

486 677

50 340

492 780

1 404 565

1 002 504

2023

2022

109 632

142 990

43 861

21 929

43 371

97 578

77 357

30 376

7 921

55 813

111 626

109 632

The fair value of the options, RSUs and performance shares are set on the grant date
and expensed over the vesting period. USD 6,548 thousand was expensed during 2023
and USD 7,797 thousand in 2022. The strike price of the RSUs and PSUs are nil and the
shares are delivered free of payment.

The fair value per RSU and performance share without market condition granted in
2023 was NOK 140.25. The fair value of the performance shares with Relative Total
Shareholder Return performance condition granted in 2023 was NOK 223.3539. 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 140.25 and USD 3,721.47, respectively.

Note 24: Current liabilities
All figures in USD 1 000

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 2023 i.e. 4.05 % in Norway.

Volatility
It is assumed that historic volatility is an indication of future volatility. The expected
volatility is therefore stipulated to be the same as the historic volatility, which equaled
50.72% on the date of grant in 2023 for the company and 34.95% for the SOX Index.

Expected lifetime
Performance shares vest on the July 12, 2026. Performance end date is December 31,
2025, so as of vesting date the quantity to vest is known.

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.

GROUP

PARENT

2023

12 201

—

5 640

1 390

6 334

11 113

30 010

25 294

4 398

9 897

741

5 514

1 620

2022

34 229 Accounts payable

— Accounts payable from subsidiaries

43 758 Taxes payable

14 542 Employee benefit obligations

6 455 Social security tax and payroll tax

10 129 Holiday pay

30 694 Ship and debit

23 382 End-customer rebate

— Restructuring costs

6 280 Current lease liabilities

— Accrued interest bond

7 547 Accrued expenses

145 Other current liabilities

2023

15 403

55 148

3 939

319

4 579

6 405

—

2 811

5 963

741

3 325

147

2022

32 335

31 994

42 837

7 333

4 745

5 991

30 694

23 382

—

2 813

—

5 450

114 151

177 160 Total current liabilities

98 778

187 648

Restructuring cost, including termination benefit cost
In October 2023, Nordic communicated a detailed restructuring plan including
downsizing to secure long-term health of the company in a challenging economic
environment. The process was finalized in December 2023.

The provision for restructuring cost at the balance sheet date include incremental costs
that are directly associated with the restructuring, such as the cost of outplacement
and termination benefits.

The cost of outplacement is recognized as the best estimate of the expenditure
required to settle the present obligation at the balance sheet date. Nordic measure
termination benefits on initial recognition (at undiscounted amount), and measure and
recognize subsequent changes, in accordance with the nature of the employee benefit.

The termination benefit is a result of employee's decision to accept an offer of benefits
in exchange for the termination of employment. The termination benefits includes a
lump sum payment, enhancement of post-employment benefits (such as pensions and
insurance plans) and salary till end of the notice period.

The benefit is settled during the specified notice period (within 12 months after balance
sheet date).

131

132

Note 25: Financial instruments
All figures in USD 1 000.

25.1 Accounting policies

All financial assets and liabilities are classified at amortized cost, except money market

fund and currency swap at fair value through profit or loss.

Financial assets are initially measured at fair value plus or minus transaction costs that
are directly attributable to the acquisition of the asset. Financial assets classified at
amortized cost is 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 liabilities are recognized initially at fair value and, in the case of loans and
borrowings and accounts payables, net of directly attributable transaction costs. 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

25.2 Financial instruments
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

2023

2022

602 077

583 544 Total equity

862 245

776 241 Total assets

70%

75% Equity share

PARENT

2023

554 883

793 682

70%

2022

561 074

757 864

74%

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

GROUP

2023

133 316

4 389

192 225

—

2022 Amortized cost

175 120 Accounts receivable

5 562 Other current receivables

280 178 Cash at bank

50 467 Short-term bank deposits

PARENT

2023

984

113 795

168 822

—

2022

175 120

12 989

270 783

50 467

329 930

511 328

Total financial assets at amortized
cost

283 601

509 359

GROUP

2023

98 731

—

98 731

2022 Fair value through profit or loss

48 458 Money market fund

267 Currency swap

48 725

Total financial assets at fair value
through profit or loss

PARENT

2023

98 731

—

98 731

2022

48 458

267

48 725

In Q1 2023, the Group terminated the currency swap and sold its position in money
market fund that was acquired in 2022. In Q4 2023, The Group allocated the proceeds
from the bond issuance into a money market fund.

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

GROUP

2023

48 725

-44 205

93 064

426

721

2022

53 259 As at 1 January

— Disposal of financial instruments

— Acquisition of financial instruments

1 073 Changes in fair value

-5 607 Currency translation differences

98 731

48 725 As at 31 December

PARENT

2023

48 725

-44 205

93 064

426

721

98 731

2022

53 259

—

1 073

-5 607

48 725

133

Financial liabilities
The Group holds the following financial liabilities:

GROUP

2023

97 491

12 201

741

79 345

47 864

9 897

2022 Amortized cost

— Bond

34 229 Accounts payable

— Current financial liabilities

86 439 Other current liabilities

14 861 Non-current lease liabilities

6 280 Current lease liabilities

PARENT

2023

97 491

15 403

741

68 153

42 127

5 963

2022

—

32 335

—

104 918

8 711

2 813

247 539

141 809 Total financial liabilities at amortized cost

229 878

148 777

Interest-bearing loans and borrowings:
The Group has long-term revolving credit facilities ("RCF"), which enables it to borrow
up to USD 200m any time with an interest rate equal to SOFR + margin. The line of
credit expires in June 2025. As of December 31, 2023, 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 163m, accounts receivable USD
133m and operating equipment USD 29m.

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

■ Equity ratio shall not be lower than 40 %.

In Q4 2023, the Parent issued a 5-year senior unsecured bond issue with initial issue
amount of NOK 1,000m (ISIN: NO0013072462). The interest rate is 3 months Nibor + 3
% with quarterly interest payments. In the event that Nordic loses its Investment Grade
Rating, the margin will rise by one percent and the Group will need to maintain an
equity ratio of 40% until the Group regains the Investment Grade Rating.

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

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

The Group has terminated the investments in term deposit, money market fund and
currency swap acquired in 2022. In 2023, The Group has invested USD 93m into a
money market fund using the following method and assumptions:

■ Money market fund is classified as cash equivalents due to its high liquidity and

insignificant risk of change in value. The asset is measured at quoted market price in
an active market at the balance sheet date. See note 19 for information on cash and
cash equivalents.

Note 26: 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.

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

Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a
financial instrument or customer contract, leading to a financial loss. The Group is
exposed to credit risk from its operating activities (primarily accounts receivables and
prepayments) 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 is exposed to credit risk related to a prepayment of USD 100m. There are
no indications that the wafer manufacturer will not be able to fulfil their part of the
agreement, and no expected credit loss is reflected in the financial statement.

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.

134

Age distribution of customer receivables was:

GROUP

2023

2022 Gross total

93 606

143 750 Not due

37 107

2 332

271

30 241 Past due 0-30 days

846 Past due 31-120 days

283 Over 120 days

133 316

175 120 Total

PARENT

2023

630

271

983

2022

143 750

30 241

846

283

175 120

The Group make an allowance for expected credit losses on customer receivables
based on internal, historical credit loss data and past due receivables, adjusted for
forward-looking factors specific to the debtors and the economic environment.

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. Historically there has not been any
significant credit losses. 71 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 2023 was 0m.

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

GROUP

2023

133 316

21 874

2022

175 120 Accounts receivable

17 539 Other current receivables

290 957

379 104 Cash and cash equivalents

—

50 467 Short-term bank deposits

446 147

622 230 Total

PARENT

2023

983

128 785

267 553

—

397 321

2022

175 120

21 884

369 709

50 467

617 180

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

Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial
obligations when due and to close out market positions.

Overall, cash flows are being monitored 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.

As of 31 December 2023, cash and cash equivalents amounted to USD 291.0m (USD
379.1m), see note 19 for details. The total balance includes money market fund at fair
value USD 98.7m.

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, 2023:

GROUP

Carrying
amount

Contractual
cash flow

Less than
one year

One to five
years

More than
five years

Bond

Current financial liabilities*

Accounts payable

Other current liabilities

Lease liabilities**

97 491

741

12 201

92 053

57 762

260 247

98 305

34 435

12 201

92 053

77 422

314 416

—

7 480

12 201

92 053

10 318

122 052

98 305

26 955

—

30 059

155 319

—

37 045

PARENT

Carrying
amount

Contractual
cash flow

Less than
one year

One to five
years

More than
five years

Current financial liabilities*

Accounts payable

Accounts payable
subsidiaries

Other current liabilities

Lease liabilities**

Total

97 491

741

15 403

55 148

22 258

48 090

239 130

98 305

34 435

15 403

55 148

22 258

66 530

292 078

—

7 480

15 403

55 148

22 258

6 029

106 317

98 305

26 955

—

23 764

149 025

36 736

*Current financial liabilities is interest on bond. The contractual cash flow is calculated using forward yield
curve. Estimated interest payments are based on the contractual cash flow of the bond at 31 December 2023.

**Lease liabilities is mainly office facility rent in Trondheim, lease ending 31 December 2037 and in Oslo, leasing
ending 31 December 2032

Total

Bond

135

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

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

The Group has a sustainability linked revolving credit facility, which enables it to
borrow up to USD 200 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 issued a 5-year senior unsecured bond with initial issue amount of
NOK 1,000m. The interest rate is 3 months Nibor + 3 %.

Interest rate sensitivity analysis
The interest rate sensitivity analysis is showing the effects of changes in market interest
rate on borrowing interest costs. The analysis is based on the following assumptions:

■ Revolving credit facility - The profit before tax is not impacted by changes in market

interest rate as the credit facility as of December 31, 2023 is not utilized.

■ Bond - The profit before tax is impacted by changes in market interest rate. The table

below demonstrates the sensitivity to a possible change in interest rates. With all other
variables held constant, the Group’s profit before tax is affected through the impact
on floating rate borrowings, as follows:

Interest rate (3 months NIBOR)

Effect on profit before tax

2023

2022

+50 basis points

-50 basis points

-48

—

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 primary functional currency for the Group is USD. The vast majority of the Group's
revenues and cost of goods sold are denominated in USD. However, approximately
40% of the Group’s operating expenses (excluding depreciation and amortization)
are denominated in NOK and 20% 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%

+/- 4 537

Issued bond and money market fund is nominated in NOK The impact on profit and loss due to changes in
the NOK exchange rate on these financial instruments is about 0.

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

2023

USD

EUR

Other

Total

Local currency
(1,000)

542 830

282

USD
(1,000)

542 830

542 869

Share of total revenue in %

100.0%

—%

100.0%

Local currency
(1,000)

776 712

130

2022

USD
(1,000)

776 712

776 734

Share of total revenue in %

100.0%

—%

100.0%

PARENT

USD

EUR

Other

Total

Local currency
(1,000)

507 986

282

2023

2022

USD
(1,000)

507 986

508 026

Share of total revenue in %

100.0%

—%

100.0%

Local currency
(1,000)

777 106

356

4 532

USD
(1,000)

777 106

369

287

777 764

Share of total revenue in %

99.9%

—%

100.0%

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

GROUP

USD

EUR

NOK

Other

Total

PARENT

USD

EUR

NOK

Other

Total

2023

Accounts
receivable

133 313

—

133 316

2023

Accounts
receivable

981

—

983

Accounts
payables

12 102

599

2 842

-14 802

741

Accounts
payables

12 092

297

2 842

-14 490

741

2022

Accounts
receivable

175 120

—

175 120

2022

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

136

Determination of fair value
As of December 31, 2023 the Group had no other financial assets or financial
liabilities than the bond where there is considered to be a difference between book
value and fair due to bond discounts/premiums. The bond is classified as Level 1 in
the fair value hierarchy, as it is a listed financial liability with observable prices.

Below is an overview of Nordic’s financial instruments with difference between book
value and fair value:
GROUP

2023

2022

Financial liabilities

Bond

PARENT

Financial liabilities

Bond

Book value

Fair market
value

Book value

Fair market
value

97 491

99 178

—

2023

2022

Book value

Fair market
value

Book value

Fair market
value

97 491

99 178

—

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

Note 27: Business combination
On March 9, 2023, the Group obtained control of Mobile Semiconductor Inc. hereby
referred to as target, by acquiring all the shares in target. With this acquisition, the
Group expects to increase its product quality within its product lines.

Our provisional allocation of the purchase price to the identifiable assets and liabilities
and goodwill is set out below:

Amount in USD thousand

Details of the business combination

Amount settled in cash

Fair value of immediate equity shares consideration

Fair value of contingent share consideration

Total

Amount in USD thousand

Recognized amounts of identifiable net assets

Property plant and equipment

Intellectual property rights

Other current receivables

Cash and cash equivalents

Deferred tax liabilities

Other current liabilities

Net identifiable assets

Goodwill

Total

2023

6 000

3 141

1 360

10 500

2023

2 090

448

310

-564

-390

1 943

8 557

10 500

Consideration transferred
The acquisition was settled in cash of 6 000 000 and by 312 843 shares of Nordic
Semiconductor ASA. The fair value of the equity shares issued (USD 4 500 000) was
based on an agreed value of Nordic’s shares on the acquisition date. Of the total
shares, 218 348 have been transferred at closing whilst the remaining shares will be
held back for up to three years. The contingent consideration of value USD 1 360 000
will either be settled directly to the shareholders of Mobile Semiconductor Inc., or
dependent on certain conditions settled in other matters. The contingent consideration
will be settled at or prior to Q1 2026. The fair value of acquired IP amounts to USD 2
089 500. Goodwill recognized in the acquisition relates to the expected growth and
the value of Mobile Semiconductor Inc. collective know-how, which cannot separately
be recognized as an intangible asset.

137

Amount in USD thousand

Balance, beginning of the year

Acquired through business combination

Net exchange difference

Balance, end of period

2023

2 284

8 557

10 891

2022

2 386

—

-102

2 284

Goodwill is tested for impairment annually at the level of the cash generating segment
to which it is allocated. See note Note 12: Goodwill and intangible assets

Goodwill is deductive for tax purposes, with 20 % annual rate.

Mobile Semiconductor's contribution to the Group results
As Mobile Semiconductor has been merged with Nordic Semiconductor Inc., it is
impractical to disclose the contribution Mobile Semi makes to the group as it is not
separately recognized in the books. Had the acquisition date been January 1st, we
would expect an additional contribution on EBITDA of approximately USD -0.8m.
Assuming this EBITDA contribution for the full year we would expect a full year
contribution to EBITDA with USD -3.2m.

Note 28: Events after the balance sheet date
No events have occurred since December 31, 2023 with any significant effect that will
impact the evaluation of the submitted accounts.

Note 29: 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 18: Intercompany for further information.

138

Alternative Performance Measures

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

Gross profit

Total revenue

Gross margin

2023

283.7

542.9

52.3%

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

2023

4.7

44.3

49.0

2022

436.8

776.7

56.2%

2022

161.6

44.1

205.7

■ EBITDA margin. EBITDA divided by Total Revenue.

GROUP

EBITDA

Total revenue

EBITDA Margin

2023

49.0

542.9

9.0%

2022

205.7

776.7

26.5%

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

2023

153.0

81.7

44.3

279.0

-44.3

-6.5

22.0

250.1

2022

161.4

69.7

44.1

275.2

-44.1

-7.8

6.5

229.8

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.

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 financial assets

Current liabilities

Current financial liabilities

Current lease liabilities

Income taxes payable

Net working capital

Total revenue

NWC / LTM revenue

2023

609.2

-291.0

0.0

-114.2

0.7

9.9

5.6

220.4

542.9

40.6%

2022

674.1

-379.1

-0.3

-177.2

0.0

6.3

43.8

167.6

776.7

21.6%

GROUP

Reported EBITDA

Long range (cellular IoT) EBITDA loss

Wi-Fi expense

Restructuring expenses excl. Wi-Fi and LR

Adjusted EBITDA

Total revenue (excluding cellular IoT revenue)

Adjusted EBITDA margin

Total restructuring expenses

2023

49.0

45.5

16.5

4.3

115.4

525.3

22.0%

4.9

2022

205.7

41.4

15.1

0.0

262.2

751.4

34.9%

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

2023

279.0

-44.3

234.7

542.9

43.2%

2022

275.2

-44.1

231.1

776.7

29.8%

139

140140

Responsibility
statement

2023Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices010203040506072023

Responsibility Statement

The Chief Executive Officer and the Board of Directors confirm, to the best of our
knowledge, that the financial statements for 2023 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 19, 2024

Anita Huun

Board member

Birger Steen

Chair

Inger Berg Ørstavik

Board member

Snorre Kjesbu

Board member

Vegard Wollan

Chief Executive Officer

Annastiina Hintsa

Board member

Jon Helge Nistad

Anja Dekens

Morten Dammen

Board member, employee

Dieter May

Board member

Helmut Gassel

Board member

141141

2023Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices010203040506072023

142142

Audit opinion letter

2023Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices010203040506072023

To the General Meeting of Nordic Semiconductor ASA

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 2023, 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 material accounting policy information, 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 2023, 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 material accounting policy information.

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 2023, and its financial performance and its cash flows for the year then ended in
accordance with IFRS Accounting 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 2023, and its financial performance and its cash flows for the year then ended
in accordance with IFRS Accounting 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 5 years from the election by the general meeting of the
shareholders on 24 April 2019 for the accounting year 2019.

Key Audit Matters

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.

143143

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

The Group’s activities are largely unchanged compared to the prior year. Revenue Recognition – Ship and
Debit Provision carries the same characteristics and risks this year, and consequently continues to be in our
focus for the 2023 audit.

Key Audit Matters

How our audit addressed the Key Audit Matter

Revenue recognition – Ship and debit provision

The Group sells products to certain distributors on
“ship and debit” terms. Ship and debit is an
arrangement between the Group and distributor
where the distributor may be entitled to a refund if
the distributor sells the products to end customers
at lower prices than those quoted on the distributor
price list. The distributor claims (debits) the Group
for the price difference on sold products monthly.

At the balance sheet date, the Group estimates
ship and debit on distributors inventory levels using
the expected value method. The estimate is based
on the average of historical discount to each
distributor and expected sales mix to end-
customers. An estimated ship and debit discount is
recognised in the financial statements, reducing
revenue and increasing liabilities with USD 30 010
thousand.

We have determined ship and debit provision to be
a key audit matter due to the amounts involved and
the application of management judgement.

Refer to notes 5.1, 5.2 and 5.5 for information on
the Group’s ship and debit provision.

We assessed the Group’s revenue recognition
policy, including revenue recognition for ship and
debit sales, against underlying distribution
agreements and requirements in the IFRS
Accounting Standards. Furthermore, we obtained
an understanding of management’s process for
estimating the ship and debit provision.

We tested the design and operational effectiveness
of selected internal controls relevant to the ship and
debit process.

We performed a retrospective review of the
outcome of prior year estimates performed by
management by comparing actual discounts in
2023 to the prior year ship and debit provision. 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 also tested the mathematical
accuracy of the calculation of the provision.

Further, we obtained the actual ship and debit
claims in January and February 2024 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 and found the information
provided in the notes to be appropriate.

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
appears 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.

2 / 4

2023Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607

2023

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 IFRS Accounting 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, actions taken to
eliminate threats or safeguards applied.

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.

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-2023-12-31-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, 19 March 2024
PricewaterhouseCoopers AS

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

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2023Message from the CEONordic at a glanceReport from the Board of Directors Financial statementsResponsibility statementAudit opinion letterAppendices01020304050607

2023

Revisjonsberetning

Signers:

Name

Nilsen, Eivind

Method

BANKID

Date

2024-03-19 12:06

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This document package contains:
- Closing page (this page)
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This file is sealed with a digital signature.
The seal is a guarantee for the authenticity
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Appendices

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Appendices

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
19, 2024 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 the end of 2023, 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);
Seattle and Portland (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, human and labor rights, equal
treatment, the prevention of discrimination, and 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 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.

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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 and the cyclical nature of its business
mean 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 20,
2023, has been authorized to buy back up to 19,200,000
own shares for a total par value of NOK 192,000.00 in
one or more transactions. The authorization is limited to
10 percent of the company’s share capital. 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 2024.
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 30th June the following year.

In accordance with the decision passed at the general
meeting held April 20, 2023, 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 2024, 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 2024.

Equal treatment of shareholders and
transactions with close associates
Nordic Semiconductor ASA 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.

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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
opportunity to vote. The company should design the
form for the appointment of a proxy to make voting on
each individual matter possible and should nominate a
person who can act as a proxy for shareholders.

Deviations from the Code of Practice: Nordic has one
deviation related to participation in the General Meeting.
The entire Board of Directors has normally not participated
in the General Meeting. Matters under consideration at
the General Meeting of shareholders have not previously
required this. The Chair of the Board of Directors is always
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 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
proposals to the Nomination Committee is two months
before the Annual General Meeting.|

The Nomination Committee held 17 meetings in 2023.

The members of the Nomination Committee are:

■ Viggo Leisner (Chair) - independent member of the

Nomination Committee

■ Fredrik Thoresen - representing Kvantia AS

■ Eivind Lotsberg . representing The Government

Pension Fund

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 are 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 employee-elected Board members.

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

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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.

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.

The Norwegian Public Companies Act prohibits the CEO
from serving as chair. Furthermore, the Act requires
public companies with more than 9 board members to
ensure that no more than 60% of the Board consists
of members of the same gender. This requirement
is related to shareholder-elected board members.
However, similar requirements apply for employee-
elected board members.

Subsequent to the 2023 General Meeting, the Board
consisted of seven shareholder-elected Board Members
and four employee-elected Board Members. Changes
to the Board during the year is accounted for under the
section "Events and developments".

At the end of 2023, the Board of Directors consisted
of 60% women (three out of five) of the shareholder-
elected members. The employee-elected members had
a composition of 33,3% women (one out of three).

No executive personnel or representatives of business
associates are members of the Board. Members of the
Board are encouraged to hold shares in the company.

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

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.

High on the Board of Director's agenda in 2023 was
prioritization of the Groups strategic initiatives, RIF
initiative as well as the acquisition of the IP portfolio of
Atlazo, Inc. During 2023, the Board held 12 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 ensuring
coherent remuneration policies and practices enabling
the company to attract and retain key talent, generating
sustained business performance, and supporting
company objectives and values. It also includes
reviewing 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 2023.

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

■ Annastiina Hintsa (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, and
one employee-elected Board Member with extensive
company experience.

All members participated in all meetings during 2023.

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 the required qualifications in 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 2023 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:

■ Anita Huun (Chair)

■

Inger Berg Ørstavik

■ Birger K. Steen (Observer)

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The members of the of the Audit Committee have the
extensive experience required to properly oversee the

Company's accounting, financial reporting, and internal
and external audits. They adhere to principles of good
corporate governance.

One member has extensive experience as a CFO in a
global technology company and investment banking,
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 company's elected auditor.

The elected auditor's independence is evaluated
annually. Audit partner and company rotation is done
when considered appropriate. In 2019, a full tender for
audit services was conducted and the 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

■ Anja Dekens

The Sustainability Committee held five meetings in 2023.
All members participated in all meetings.

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.

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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’s remuneration
annually, following evaluation and recommendation
from the Board’s People and Compensation Committee
(PCC). It also reviews and monitors the general terms
and conditions for other senior executives of the Group.

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

The Group has both a Short- and Long-Term Incentive
plan for the Executive Management Team (EMT), subject
to their continued employment at the payment or
vesting date. The Short-Term Incentive is an annual cash
bonus subject to relevant KPIs. The Long-Term Incentive
is given as both Restricted Share Units and Performance
Share Units, subject to absolute payout limits and
fulfillment of relevant KPIs. Both incentive programs are
discretionary to the Board of Directors subject to overall
company performance and earnings.

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. The
remuneration guidelines and policy was approved
by the shareholders at the Annual General Meeting
in 2023.

The approved guidelines and policy is available on
Nordic’s website. A new management remuneration
report for 2023 will be published on Nordic's website
and presented to the Annual General Meeting in 2024
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
2024 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.

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.

Take-overs
The Board of Directors has 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.

In the fall, the external auditor presents to the Audit
Committee an evaluation of risk, internal control and
the quality of reporting at Nordic Semiconductor with

153153

the audit plan for the current year. The auditor meets
the Audit Committee on a regular basis. The external
auditor also takes part in the Board’s discussions on
annual financial statements. In both cases, the Board of
Directors ensures that the Board and external auditor
are able to discuss relevant matters at a meeting at
which the executive management is not present.

The auditor shall be independent of the company.
Therefore, Nordic Semiconductor does not engage
the elected auditor for tasks other than the financial
audit required by law. Nevertheless, the auditor is
used for tasks that are naturally related to the audit,
such as technical assistance with tax returns, annual
accounts, understanding 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.

Description

General Meeting

Events and developments

Nordic Semiconductor ASA is a public limited
company organized with a governance structure
based on Norwegian corporate law. Our corporate
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.

Developments and events during the reporting year

References

Company shareholders exercise ultimate authority through the Annual General Meeting.

The General Meeting was held April 20, 2023.

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 17 meetings during 2023.

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.

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

Board of Directors

The Board of Directors consists of 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.

The Board of Directors held 12 meetings in 2023.

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 employee-elected members are part of
the company’s executive management. Employee-elected members have no other service
agreements with the company outside of their employment contracts, though they are
subject to their duties as board members.

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.

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 2024.

High on the Board of Director's agenda in 2023 was prioritization of
the Groups strategic initiatives, the restructuring initiative, CEO succession, as
well as the acquisition of the IP portfolio of Atlazo, Inc.

Snorre Kjesbu and Niels Anderskouv were appointed as shareholder-elected
board members at the General Meeting on April 20, 2023, replacing Endre
Holen and Øyvind Birkenes. Niels Anderskouv resigned on May 11, 2023 due to
his appointment as Chief Business Officer at Global Foundries. Snorre Kjesbu
attended his first board meeting on June 6, 2023.

Jan Frykhamar resigned from the Board of Directors on July 4, 2023 for
personal reasons. Employee-elected board member Gro Fykse resigned from
the Board of Directors on December 12, 2023 due to personal connection with
recently appointed CEO Vegard Wollan.

All shareholder-elected members were deemed in 2023 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 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

154154

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 2023.

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 2023, 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.

Anita Huun (Chair)
Inger Berg Ørstavik
Birger K. Steen (Observer)

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 2023.

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).

Important focus areas for the People & Compensation Committee
during 2023 were succession planning including leadership framework,
performance and growth management including job architecture
fundamentals, and continued development and review of the people
and compensation agenda including reward structures.

Members:
a.
b.
c.

Anastiina Hintsa (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

155155

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 held 5 meetings in 2023.

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.

In 2023 the committee continued the discussion around establishing
specific sustainability strategy or continuing with integration of relevant
sustainability elements into overall company strategy. Hereunder, to
further develop Nordic's approach to sustainability risk management, to
understand and develop plan for preparedness for the new reporting
regulations, in particular the EU Corporate Social Reporting Directive
(CSRD), to prepare proposals for ESG related KPIs for approval by
the Board as well as Nordic's commitment to the Science Based
Target Initiative.

Members:

Inger Berg Ørstavik (chair)

a.
b. Annastiina Hinsta
c. 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 29 meetings in 2023.

In December 2023, Nordic Semiconductor completed its CEO succession
project, with Vegard Wollan appointed to replace Svenn-Tore Larsen as
CEO with effect from January 1, 2024.

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

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

156156

TCFD Index

Governance

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

The Board of Directors is responsible for oversight of climate-related risks and opportunities impacting the Group. The board
oversees risk management through biannual reviews and on an ongoing basis in relation to specific projects and ongoing
business.
In September 2022, the Board of Directors established a dedicated Sustainability Committee comprised of Board members,
assisting the Board in fulfilling the Board's responsibilities with respect to sustainability within the activities and value creation of
the company. The Committee supervises the integration of sustainability into Nordic’s strategy and business activities, reflected
in adequate follow-up of ESG metrics to measure and monitor its sustainability performance.

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

At the management level, the ESG Committee, consisting of the Executive Management Team (EMT) members from relevant
functional areas, supports the CEO in developing and maintaining the Group's sustainability framework within defined ESG
criteria and ensuring a holistic and aligned approach to sustainability across the Group.

Risk management
section

Governance section

Nordic 2023 CDP
Climate Change
report
C1.1b, C2.2

Governance section

Nordic 2023 CDP
Climate Change
report
C1.2

2023

157157

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.

Nordic 2023 CDP
Climate Change
report
C2.1, C2.1a, C2.2, C2.3,
C2.3a, C2.4, C2.4a

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

•

Influence on products & services: Contributing to IoT solutions for energy efficiency and energy management.
This responds to market demand for sustainable solutions and lower energy consumption in end-user devices.
Furthermore, our climate strategy includes commitment to science-based GHG emission targets in collaboration with
and supported by 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 the 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 in Asia, our key measure is to second-source vital components to mitigate acute physical risks and
protect against supply disruptions.
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. 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 impact.
Influence on Operations: Nordic has conducted a risk assessment of different business aspects, identifying potential
actions related to climate change in our operations. Our operations are limited to R&D, sales, and administration
within our offices. In recent years, Nordic has invested in renewable energy for its offices, which will continue in
coming years as we move on towards our SBTi targets.

TCFD disclosure in
Climate Change
section

Nordic 2023 CDP
Climate Change
report
C2.3a, C2.4a, C3.1,
C3.3

Nordic Semiconductor established a GHG emission program in 2020 for scopes 1, 2, and 3. In 2023, Nordic set new, ambitious
near- and long-term GHG emission targets aligned with the Science Based Target initiative (SBTi). With these targets, Nordic is
committed to ensure a resilient transition plan that supports the goals of the Paris Agreement to limit global warming to 1.5°C.

Climate Change
section

2023

158158

159159

a) Describe the
organization’s processes for
identifying and assessing
climate-related risks

Risks related to climate change are managed through an enterprise risk management framework, which aims to proactively
identify and manage risks that may impact our ability to deliver on our strategic objectives. As part of this process, risks related
to current and emerging regulation, technology, legal, market, reputation, and acute and chronic physical events are considered.
For identifying, assessing, and prioritizing climate-related risks, we use a 5x5 risk matrix considering likelihood on a rating
scale of 1 ('Improbable') to 5 ('Almost certain'), and impact on a scale of 1 (’Insignificant’) to 5 ('Catastrophic'). The impact scale
defines criteria and definitions for assessing each risk within different impact categories: Financial, Reputational, Climate and
Environment, and People or Property.

Risk management
section

Nordic 2023 CDP
Climate Change
report
C2.2, C2.2a

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

Climate-change-related risks comprise an integral part of our overall enterprise risk management framework. Based on the
combination of likelihood of occurrence and impact (5x5 risk matrix, as described in the disclosure for Risk Management a),
risks are prioritized and mitigation measures with reach responsible, deliverables/verification, time horizon and status are
defined for each risk.
Climate-related risks have been identified in the TCFD disclosure.

Risk
Management

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 are integrated into the company’s enterprise 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 likelihood and impact, forms an integral part
of the Group’s corporate risk report. The Board of Directors oversees risk management through biannual reviews and on an
ongoing basis in relation to specific projects or other matters of ongoing business. The Executive Management Team (EMT) and
the defined risk functions are accountable for implementing the necessary risk-mitigating measures in the relevant parts of the
organization.

Risk management
section

TCFD disclosure in
Climate Change
section

Nordic 2023 CDP
Climate Change
report
C2.2, C2.2a

Risk management
section

Nordic 2023 CDP
Climate Change
report
C2.2

a) 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 Climate Change section for GHG emission scope 1, 2,
and 3 data.

Climate Change
section

Refer to the Climate Change section for disclosure on emissions.

Climate Change
section

ESG-related KPIs, with the potential for incentives, are set for Executive Management Team (EMT) members and specific
positions reporting to EMT members of Nordic Semiconductor ASA. Specific near- and long-term GHG emission targets, and the
related KPIs are as follows:

Climate Change
section

•
•

Reduce absolute Scope 1+2 GHG emissions 60% by 2030 from a 2019 base year
Reduce Scope 3 GHG emissions 60% per USD valued added by 2030 from a 2019 base year (value added = sales
revenue - the cost of goods and services purchased from external suppliers)
Reduce Scope 1, 2 and 3 emissions 90% by 2050 from a 2019 base year
Reach net-zero GHG emissions across the value chain by 2050 from a 2019 base year

GRI and CSRD Index

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

GRI 2: General
Disclosures 2021

2-1 Organizational
details

See requirements of
Directive 2013/34/EU

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

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

2-3 Reporting period,
frequency and
contact point (2-3-a
and 2-3-b)

ESRS 1 5.1; ESRS 2 BP-1 §5 (a)
and (b) i

2-2 A: See Disclosures: Note 15 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.

ESRS 1 §73

2-3 A-B: See reporting period end date in Income Statement 2-3 C: To be published on the 20th of March, 2024. 2-3 D: IR
contact details found on company website

2-4 Restatements of
information

ESRS 2 BP-2 §13, §14 (a)
to (b)

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

2-5 External
assurance

See external assurance
requirements of Directive
(EU)
2022/2464

2-5 A: Nordic Semiconductors external auditors are verifying the report from the board of directors and the financial statement.
However, The CSRD transition report including ESRS 2, ESRS E chapters, ESRS S chapters and ESRS G chapter is not specifically
assured for in this confirmation. 2-5 B: At the time of reporting, Nordic Semiconductor's CSRD sustainability reporting has not
been externally assured as this is not required.

2-6 Activities, value
chain and other
business relationships

ESRS 2 SBM-1 §40 (a) i to
(a) ii,
(b) to (c), §42 (c)

2-7 Employees

ESRS 2 SBM-1 §40 (a) iii;
ESRS
S1 S1-6 §50 (a) to (b) and (d)
to (e), §51 to §52

2-8 Workers who are
not employees

ESRS S1 S1-7 §55 to §56

2-6 A: See Strategy and ambitions and Strategy 2-6 B-C: See Workers in the value chain 2-6 D: No significant changes
compared to previous reporting period

2-7 A: See 2-7 A: Own workforce, Disclosures: Note 7: Payroll expenses 2-7 B-E: See Own Workforce: Nordic does not currently
have complete data available for for all required indicators.

2-8 A: i. Workers who are not classified as employees are mainly contractors and consultants. Contractors and consultants: By
year-end 2023, Nordic had 44 contractors and consultants, around half of which joined during 2023. The gender split was 80%
male and 20% female, which is consistent with the overall gender split within the Group. 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 Own Workforce for details

160160

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

2-9 Governance
structure and
composition
(2-9-a , 2-9- b, 2-9-c-i,
c-ii, c-v to c-viii)

2-10 Nomination
and selection of the
highest governance
body

ESRS 2 GOV-1 §21, §22 (a),
§23;
ESRS G1 §5 (b)
See also corporate
governance statement
requirements of Directive
2013/34/EU for public-
interest entities

This topic is not covered
by the list of sustainability
matters in ESRS 1 AR §16.

2-11 Chair of the
highest governance
body

This topic is not covered
by the list of sustainability
matters in ESRS 1 AR §16.

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

ESRS 2 GOV-1 §22 (c);
GOV-2
§26 (a) to (b); SBM-2 §45 (d);
ESRS G1 §5 (a)

2-13 Delegation of
responsibility for
managing impacts

ESRS 2 GOV-1 §22 (c) i;
GOV-2
§26 (a); ESRS G1 G1-3 §18 (c)

2-9 A: See the Sustainability statement Governance chapter.
2-9 B: See the Sustainability statement Governance chapter
2-9 C: See the Our Group Board of Directors chapter, 2-9 C: viii. Stakeholder representation: the Board of Directors consist of 3
employee elected representatives while shareholders elect 7 representatives.

2-10 A-B: See the appendix Board of Directors' report in relation to the Norwegian Code of Practice for Corporate governance

2-11 A-B: The Chairman of Nordic is found in Board of Directors. See the appendix Board of Directors' report in relation to the
Norwegian Code of Practice for Corporate governance

2-12 A-B: See the Sustainability statement Governance chapter.
See Note 8.1: Management remuneration for incentive schemes linked to sustainability matters

2-13 A-B: See the Sustainability statement Governance chapter.

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

2-15 Conflicts of
interest

ESRS 2 GOV-5 §36; IRO-1
§53
(d)

2-14 A-B: The annual report 2023, including the sustainability reporting, has been reviewed and approved by the Board
of Directors.

This topic is not covered
by the list of sustainability
matters in ESRS 1 AR §16.

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

ESRS 2 GOV-2 §26 (a); ESRS
G1
G1-1 AR 1 (a); G1-3 §18 (c)

2-16 A: The CEO reports about critical concerns to the Board of Directors on a running basis when relevant. The Head of
Compliance reports on status on compliance matters, including reported matters and critical concerns on a regular basis
to the Audit Committee. 2-16 B: See the Business Conduct chapter for information about the process for handling reported
concerns. See the Governance performance overview for numbers of reports made through the whistleblower channel.

161161

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

2-17 Collective
knowledge of the
highest governance
body

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

2-19 Remuneration
policies
(2-19-a and 2- 19-b)

2-20 Process
to determine
remuneration

2-21 Annual total
compensation ratio
(2-21-a and 2-21-c)

2-22 Statement
on sustainable
development strategy

2-23 Policy
commitments
(2-23-a-i and a-iv;
2-23-b, 2-23-d, 2-23-e,
2-23-f)

ESRS 2 GOV-1 §23

2-17 A: See the Sustainability statement Governance chapter. 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.

This topic is not covered
by the list of sustainability
matters in ESRS 1 AR §16.

2-18: See the Report from the Board of Directors and section on the Board of Directors for their competencies in the annual
report. 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.

ESRS 2 GOV-3 §29 (a) to (c);
ESRS E1 §13
See also remuneration
report requirements of
Directive (EU) 2017/828 for
listed undertakings

ESRS 2 GOV-3 §29 (e)
See also remuneration
report
requirements of Directive
(EU) 2017/828 for listed
undertakings

ESRS S1 S1-16 §97 (b) to (c)

2-19: See Board of Directors' report in relation to the Norwegian Code of Practice for Corporate governance, Disclosure: Note
8.1: Management remuneration and annual Remuneration report for remuneration guidelines and policy.

See annual Remuneration 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.

2-21 A-B: See Social performance overview in the Own Workforce chapter and annual Remuneration report. 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 2.72.

ESRS 2 SBM-1 §40 (g)

See the Message from the CEO and Sustainability statement.

ESRS 2 GOV-4; MDR-P §65
(b) to (c) and (f); ESRS S1 S1-1
§19 to §21, and §AR 14; ESRS
S2 S2-1 §16 to §17, §19, and
§AR 16; ESRS S3 S3-1 §14,
§16 to §17 and §AR 11; ESRS
S4 S4-1 §15
to §17, and §AR 13; ESRS G1
G1-1 §7 and §AR 1 (b)

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 Workers in the Value Chain chapter. 2-23 B: See Workers
in the Value Chain chapter 2-23 C-F: See Policies and Statements on Nordic's website and the description in each respective
policy.

162162

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

2-24 Embedding
policy commitments

2-25 Processes to
remediate negative
impacts

2-26 Mechanisms for
seeking advice and
raising concerns

ESRS 2 GOV-2 §26 (b);
MDR-P
§65 (c); ESRS S1 S1-4 §AR 35;
ESRS S2 S2-4 §AR 30; ESRS
S3 S3-4 §AR 27; ESRS S4
S4-4 §AR
27; ESRS G1 G1-1 §9 and
§10 (g)

ESRS S1 S1-1 §20 (c); S1-3
§32 (a), (b) and (e), §AR 31;
ESRS S2
S2-1 §17 (c); S2-3 §27 (a), (b)
and (e), §AR 26; S2-4 §33
(c); ESRS S3 S3-1 §16 (c); S3-3
§27 (a), (b) and (e), §AR 23;
S3-4 §33 (c); ESRS S4 S4-1
§16 (c); S4-3 §25 (a), (b) and
(e), §AR 23; S4-4 §32 (c)

ESRS S1 S1-3 §AR 32 (d);
ESRS S2 S2-3 §AR 27 (d);
ESRS S3 S3- 3 §AR 24 (d);
ESRS S4 S4-3 §AR
24 (d); ESRS G1 G1-1 §10 (a);
G1-3 §18 (a)

See Nordic's public policies and statements on the Nordic website and the Business Conduct chapter for general information.

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 with the purpose
of identifying and remediating risks of and actual negative impacts reconcerning 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 Workers in our Value Chain and the Business Conduct chapter.

2-26 A: Nordic has established a whistleblowing channel where any suspected incidents of misconduct can be reported. For
details, see the Workers in our Value Chain and the Business Conduct chapter.

163163

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

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.

Member of Bluetooth SIG, Connectivity Standard Alliance, and Global Semiconductor Alliance (GSA)

See overview table in the stakeholder dialogue in Strategy. In addition, see the Environment, Social, and Governance chapters.

2-27 Compliance with
laws and regulations

2-28 Membership
associations

2-29 Approach
to stakeholder
engagement

ESRS 2 SMB-3 §48 (d); ESRS
E2
E2-4 §AR 25 (b); ESRS S1
S1-17
§103 (c) to (d) and §104 (b);
ESRS G1 G1-4 §24 (a)

Political engagement' is a
sustainability matter for G1
covered by ESRS 1 §AR 16.
Hence this GRI disclosure is
covered by MDR-P, MDR-A,
MDR-T, and/or as an
entity- specific metric to be
disclosed according to ESRS
1 §11 and
pursuant to MDR-M.

ESRS 2 SMB-2 §45 (a) i to
(a) iv;
ESRS S1 S1-1 §20 (b); S1-2
§25,
§27 (e) and §28; ESRS S2
S2-1
§17 (b); S2-2 §20, §22 (e) and
§23; ESRS S3 S3-1 §16 (b);
S3-2
§19, §21 (d) and §22; ESRS
S4
S4-1 §16 (b); S4-2 §18, §20 (d)
and §21

2-30 Collective
bargaining
agreements

3-1 Process
to determine
material topics

GRI 3: Material
Topics 2021

ESRS S1 S1-8 §60 (a) and §61

2-30 a and b is found in Own workforce in heading Collective bargaining and rights of workers.

ESRS 2 BP-1 §AR 1 (a); IRO-1
§53 (b) ii to (b) iv

3-1 A: See the Sustainability statement sub-chapter About our double materiality assessment. 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

ESRS 2 SBM-3 §48 (a)
and (g)

3-2 A: See the list of material topics in the Sustainability statement sub-chapter About our double materiality assessment. 3-2
B: For the 2023 review of material topics, they were selcted based on double materiality assessment of the 2023 ESRS topics.

164164

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

3-3 Management of
material topics

201-2 Financial
implications and
other risks and
opportunities due to
climate
change

ESRS 2 SBM-1§ 40 (e);
SBM-3
§48 (c) i and (c) iv; MDR-P,
MDR- A, MDR-M, and
MDR-T; ESRS S1 S1-2 §27;
S1-4 §39 and AR 40 (a);
S1-5 §47 (b) to (c); ESRS S2
S2-2 §22; S2-4 §33, §AR 33
and §AR 36 (a); S2-5 §42
(b) to (c); ESRS S3 S3-2 §21;
S3-4 §33, §AR 31, §AR 34
(a); S3-5 §42 (b) to (c); ESRS
S4 S4-2 §20, S4-4 §31, §AR
30, and §AR 33 (a); S4-5
§41 (b) to (c). See below
for additional linkages to
specific topics.

ESRS 2 SBM-3 §48 (a), and
(d) to (e); ESRS E1 §18; E1-3
§26; E1-9 §64

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. Omission: Incomplete. Nordic does not currently report fully on these indicators S1-5 §47, S2-5, §42,
S4-2 §20

See Note 4: Climate related risk for information

GRI 204:
Procurement
Practices 2016

3-3 Management of
material topics

ESRS G1 G1-2 §12

Management and relationships with suppliers are presented in Sustainability statement under the heading General
information.

GRI 205: Anti-
corruption 2016

3-3 Management of
material topics

ESRS G1 G1-1 §7; G1-3 §16
and
§18 (a) and §24 (b)

165165

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

205-1 Operations
assessed for risks
related to corruption

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

205-3 Confirmed
incidents of corruption
and actions taken

ESRS G1 G1-3 §AR 5

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.

ESRS G1 G1-3 §20, §21 (b)
and
(c) and §AR 7 and 8

For general information regarding anti-corruption and integrity, see the Business Conduct 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.

ESRS G1 G1-4 §25

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.

GRI 207: Tax 2019

207-1 Approach to tax

This topic is not covered
by the list of sustainability
matters in ESRS 1 AR §16.

Nordic approach to tax is reflected in Business Conduct and in the tax policy on the website.

207-2 Tax governance,
control, and risk
management

This topic is not covered
by the list of sustainability
matters in ESRS 1 AR §16.

207-3 Stakeholder
engagement and
management of
concerns related
to tax

This topic is not covered
by the list of sustainability
matters in ESRS 1 AR §16.

Nordic approach to tax controls and risk is reflected in Business Conduct and in the tax policy on the website.

Stakholder engagement is reflected in General information and in the tax policy on the website.

GRI 301: Materials
2016

3-3 Management of
material topics

ESRS E5 E5-1 §12; E5-2 §17;
E5-
3 §21

Each respective sub-section of the Environment, Social, and Governance sections 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.

301-1 Materials used
by weight or volume

ESRS E5 E5-4 §31 (a)

Omission: As a fabless semiconductor company that works with various manufacturing partners and suppliers, Nordic does not
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.

301-2 Recycled input
materials used

ESRS E5 E5-4 §31 (c)

See the section on Circular Economy.

166166

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

Omission: Nordic does not have system for collecting, reusing or recycling products and their packaging materials at the
end-of-life. Nordic's products are utilized and incorporated as components in various end-products and applications.The
responsibility for collection and treatment of the finished products lies with the producer of the finished product.

301-3 Reclaimed
products and their
packaging materials

Resource outflows related to
products and services' and
'Waste' are sustainability
matters for E5 covered by
ESRS 1 §AR 16. Hence this
GRI disclosure is covered
by MDR-P, MDR-A, MDR-T,
and/or as an entity- specific
metric to be disclosed
according to ESRS 1 §11 and
pursuant to MDR-M.

GRI 302: Energy
2016

3-3 Management of
material topics

ESRS E1 E1-2 §25 (c) to (d);
E1-3
§26; E1-4 §33

302-1 Energy
consumption within
the organization
(302-1-a, b, c, e and
g)

ESRS E1 E1-5 §37; §38; §AR
32
(a), (c), (e) and (f)

See the section on Climate Change.

302-3 Energy intensity

ESRS E1 E1-5 §40 to §42

See the section on Climate Change.

302-4 Reduction of
energy consumption

GRI 303: Water
and Effluents 2018

3-3 Management of
material topics

Energy' is a sustainability
matter for E1 covered by
ESRS 1 §AR 16. Hence this
GRI disclosure is covered
by MDR-P, MDR-A, MDR-T,
and/or as an entity- specific
metric to be disclosed

ESRS E2 §AR 9 (b); E2-1
§12; E2-2 §16 and §19; E2-3
§20; ESRS E3 E3-1 §9; E3-2
§15, §17
to §18; E3-3 §20

See the section on Climate Change.

167167

303-1 Interactions with
water as a shared
resource

ESRS 2 SBM-3 §48 (a);
MDR-T
§80 (f); ESRS E3 §8 (a); §AR
15 (a); E3-2 §15, §AR 20

See the section on Water and Marine Resources.

168168

GRI Standards

GRI Disclosure
requirements

303-3 Water
withdrawal

303-4 Water
discharge

ESRS Disclosure requirements

Nordic response

See the section on Water and Marine Resources. All withdrawn water used in Nordic operations is provided by municipal water
suppliers.

See the section on Water and Marine Resources.
Omission: Nordic does not have system to measure water discharge. All discharged water is directed to municipal waste water
treatment plants.

Water withdrawals' is a
sustainability matter for E3
covered by ESRS 1 §AR 16.
Hence this GRI disclosure is
covered by MDR-P, MDR-A,
MDR-T, and/or as an
entity- specific metric to be
disclosed
according to ESRS 1 §11 and
pursuant to MDR-M.

Water discharges' is a
sustainability matter for E3
covered by ESRS 1 §AR 16.
Hence this GRI disclosure is
covered by MDR-P, MDR-A,
MDR-T, and/or as an
entity- specific metric to be
disclosed according to ESRS
1 §11 and
pursuant to MDR-M.

303-5 Water
consumption

ESRS E3 E3-4 §28 (a), (b), (d)
and (e)

See the section on Water and Marine Resources.

GRI 304:
Biodiversity 2016

3-3 Management of
material topics

ESRS E4 E4-1 §AR 1 (b) and
(d);
E4-2 §20 and §22; E4-3 §25
and §28 (a); E4-4 §29

304-2 Significant
impacts of activities,
products and services
on biodiversity (304-
2-a-i, ii, iii, iv, v and vi;
304-2-b)

3-3 Management of
material topics and
GRI 305 1.2

GRI 305:
Emissions 2016

ESRS E4 E4-5 §35, §38, §39,
§40 (a) and (c)

See the section on Biodiversity and ecosystems for information. Omission: Incomplete. Nordic does not currently report fully on
these indicators.

ESRS E1 E1-2 §22; E1-3 §26;
E1-
4 §33 and §34 (b); E1-7 §56
(b) and §61 (c); ESRS E2 §AR
9 (b); E2-1 §12; E2-2 §16 and
§19; E2-3
§20

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

305-1 Direct (Scope 1)
GHG emissions

305-2 Energy indirect
(Scope 2) GHG
emissions

305-3 Other indirect
(Scope 3) GHG
emissions

ESRS E1 E1-4 §34 (c); E1-6
§44
(a); §46; §50; §AR 25 (b)
and (c); §AR 39 (a) to (d);
§AR 40; AR §43 (c) to (d)

ESRS E1 E1-4 §34 (c); E1-6
§44
(b); §46; §49; §50; §AR 25
(b) and (c); §AR 39 (a) to (d);
§AR 40; §AR 45 (a), (c), (d),
and (f)

ESRS E1 E1-4 §34 (c); E1-6
§44
(c); §51; §AR 25 (b) and (c);
§AR
39 (a) to (d); §AR 46 (a) (i)
to (k)

See the Climate Change section.

305-4 GHG emissions
intensity

ESRS E1 E1-6 §53; §54; §AR
39 (c); §AR 53 (a)

See the Climate Change section.

305-5 Reduction of
GHG emissions
(305-5-a, c and 2.9.5)

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

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

ESRS E1 E1-3 §29 (b); E1-4
§34
(c); §AR 25 (b) and (c); E1-7
§56

Pollution of air' is a
sustainability matter for E2
covered by ESRS 1 §AR 16.
Hence this GRI disclosure
is covered by MDR-P,
MDR-A, MDR-T, and/or as
an entity-specific metric to
be disclosed according to
ESRS 1 §11 and pursuant to
MDR-M.

ESRS E2 E2-4 §28 (a); §30
(b)
and (c); §31; §AR 21; §AR 26

See the Climate Change section.

See the Climate Change section. 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. Detailed requirements for ODS usage in manufacturing processes
are defined in the Hazardous Substances Specification for Suppliers.

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

169169

GRI 306: Waste
2020

3-3 Management of
material topics

ESRS E5 §AR 7 (a); E5-1 §12;
E5-2 §17; E5-3 §21

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

306-1 Waste
generation and
significant waste-
related impacts

ESRS 2 SBM-3 §48 (a), (c) ii
and iv; ESRS E5 E5-4 §30

See the Circular Economy section.

306-2 Management
of significant waste-
related impacts
(306-2-a and c)

ESRS E5 E5-2 §17 and §20
(e)
and (f); E5-5 §40 and §AR
33 (c)

See the Circular Economy section.

306-3 Waste
generated

ESRS E5 E5-5 §37 (a), §38
to §40

See the Circular Economy section.

306-4 Waste diverted
from disposal
(306-4-a, b, c, e)

ESRS E5 E5-5 §37 (b), §38
and
§40

306-5 Waste directed
to disposal
(306-5-a, b, c, e)

ESRS E5 E5-5 §37 (c), §38
and
§40

See the Circular Economy section. Omission: Incomplete. Nordic does not currently report fully on these indicators (E5-5 §37 (b)
i-iii). All waste generated in Nordic operations is delivered to certified waste processing companies for sorting and recycling.

See the Circular Economy section. Omission: Incomplete. Nordic does not currently report fully on these indicators (E5-5 §37 (c)
i-iii). All waste generated in Nordic operations is delivered to certified waste processing companies for sorting and recycling.

GRI 306: Effluents
and Waste 2016

306-3 Significant spills

See the Circular Economy section.

Pollution of air', 'Pollution of
water', and 'Pollution of soil'
are sustainability matters
for E2 covered by ESRS 1
§AR 16.
Hence this GRI disclosure is
covered by MDR-P, MDR-A,
MDR-T, and/or as an
entity- specific metric to be
disclosed according to ESRS
1 §11 and
pursuant to MDR-M.

GRI 308: Supplier
Environmental
Assessment 2016

3-3 Management of
material topics

ESRS G1 G1-2 §12 and §15
(a)

308-1 New suppliers
that were screened
using environmental
criteria

ESRS G1 G1-2 §15 (b)

308-1 A: 100% of new manufacturing suppliers were screened using environmental criteria for the reporting period.
Omission: Nordic does not currently report fully on this indicator.

170170

GRI Standards

GRI Disclosure
requirements

GRI 401:
Employment 2016

3-3 Management of
material topics

401-1 New employee
hires and employee
turnover (401-1-b)

401-2 Benefits
provided to full-time
employees that are
not provided to
temporary or part-
time employees
(401-2-a-ii, a-iii, a-iv,
a-v and b)

401-3 Parental leave
(401-3-a and b)

3-3 Management of
material topics

402-1 Minimum notice
periods regarding
operational changes

GRI 402:
Labor/
Management
Relations 2016

171171

ESRS Disclosure requirements

Nordic response

ESRS S1 S1-1 §17; §20 (c); S1-2
§27; S1-4 §38; §39; §AR 40
(a); S1-5 §44; §47 (b) and (c);
ESRS S2 §11 (c); S2-1 §14; §17
(c); S2-
2 §22; S2-4 §32; §33 (a) and
(b); §36; §AR 33; §AR 36 (a);
S2-5 §39, §42 (b) and (c)

ESRS S1 S1-6 §50 (c)

See the chapter Own Workforce

ESRS S1 S1-11 §74; §75; §AR
75

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. In Own Workforce under workforce composition and employment terms are the most prominant terms
elaborated namely parental leave and sick leave. Omission: Incomplete. Nordic does not currently report fully on these
indicators S1-11

ESRS S1 S1-15 §93

See the Own workforce chapter heading Parental leave

See the Own workforce chapter heading Collective bargaining and rights of workers

Social dialogue' and
'Collective bargaining' are
sustainability matters for S1
covered by ESRS 1 §AR 16.
Hence this GRI disclosure is
covered by MDR-P, MDR-A,
MDR-T, and/or as an

GRI Disclosure
requirements

GRI 403:
Occupational
Health and Safety
2018

3-3 Management of
material topics

403-1 Occupational
health and safety
management system
(403-1-a)

ESRS Disclosure requirements

Nordic response

ESRS S1 S1-1 §23

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 heading in
Own Workforce.

2023

172172

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

403-2 Hazard
identification, risk
assessment, and
incident investigation
(403-2-b)

ESRS S1 S1-3 §32 (b) and
§33

403-3 Occupational
health services

Health and safety'
and 'Training and
skills development' are
sustainability matters for S1
covered by ESRS 1 §AR 16.
Hence this GRI disclosure
is covered by MDR-P,
MDR-A, MDR-T, and/or as
an entity- specific metric to
be disclosed according to
ESRS 1 §11 and pursuant to
MDR-M.

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 heading in Own workforce chapter, Workers in the value chain, Circular
economy, and Pollution. In addition, see the publicly available information on Nordic's environmental and related hazardous
substance management practices on Nordic's website: Environmental Management

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.

173173

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

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

403-5 Worker training
on occupational
health and safety

Social protection' is a
sustainability matter for S1
covered by ESRS 1 §AR 16.
Hence this GRI disclosure is
covered by MDR-P, MDR-A,
MDR-T, and/or as an
entity- specific metric to be
disclosed according to ESRS
1 §11 and
pursuant to MDR-M.

ESRS S2 S2-4 §32 (a)

ESRS S1 S1-14 §88 (a); §90

403-6 Promotion of
worker health

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

403-8 Workers
covered by an
occupational
health and safety
management system
(403-8-a and b)

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 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 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 well-being, Nordic Semiconductor organized a challenge/competition using the Strava platform.
For further information and examples, see heading Health & Safety in Own workforce.

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.

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 is 44. Not counting non consultants that will for limited times pass by the workplace. 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. 403-8 B-C: Not applicable, as stated above.

174174

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

403-9 Work-related
injuries
(403-9-a-i, a-iii, b-i,
b-iii, c-iii, d, e)

3-3 Management of
material topics

GRI 404: Training
and Education
2016

ESRS S1 S1-4, §38 (a); S1-14
§88 (b) and (c); §AR 82

See Own workforce table under heading employee engagement. Omission: Incomplete. Nordic does not currently report fully
on these indicators. S1-4 §38(a)

404-1 Average hours
of training per year
per employee

ESRS S1 S1-13 §83 (b) and
§84

Training is primarily tracked on manager level. However, it is currently a plan to map the full organization before continued
focus on implement both a leadership framework and career frameworks, to ensure we develop and encourage employees to
take on new responsibilities, as well as educating new leaders. For further information see Own Workforce heading Training
and skills development. Omission: Incomplete. Nordic does not currently report fully on these indicators.

404-3 Percentage of
employees receiving
regular performance
and career
development reviews

3-3 Management of
material topics

GRI 405: Diversity
and Equal
Opportunity 2016

ESRS S1 S1-13 §83 (a) and
§84

See Own workforce table under heading Training and skills development. Omission: Incomplete. Nordic does not currently
report fully on these indicators.

3-3 Management of
material topics

ESRS S1 §24 (a)

405-1 Diversity of
governance bodies
and employees
(405-1-a-i and iii,
405-1-b)

ESRS 2 GOV-1 §21 (d); ESRS
S1 S1-6 §50 (a); S1-9 §66 (a)
to (b); S1-12 §79

Board of directors composition is seen in Board of Directors. Management composition is seen in Executive Management.
Other governing committees are variety of compositions of these people included but not limited to People and Compensation
committee, Audit Committee, and Sustainability Committee. Omission: Incomplete. Nordic does not currently report fully on
these indicators. S1-12 §79

175175

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

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

3-3 Management of
material topics

GRI 406: Non-
discrimination
2016

ESRS S1 S1-16 §97 and §98

See Own workforce table under heading Gender pay ratio. Omission: Incomplete. Nordic does not currently report fully on
these indicators S1-16 §97 (b)

ESRS S1 S1-1 §17; §20 (c); §24
(a) and (d); S1-2 §27; S1-4
§38;
§39; §AR 40 (a); S1-5 §44;
§47
(b) and (c); ESRS S2 §11 (c);
S2- 1 §14; §17 (c); S2-2 §22;
S2-4
§32; §33 (a) and (b); §36;
§AR 33; §AR 36 (a); S2-5
§39, §42 (b) and (c); ESRS S4
§10 (b); S4-1 §13; §16 (c); S4-2
§20; S4-4 §31; §32 (a) and
(b); §35; §AR 30; §AR 33 (a);
S4-5 §38; §41 (b) and (c)

406-1 Incidents of
discrimination and
corrective actions
taken

3-3 Management of
material topics

GRI 407: Freedom
of Association
and Collective
Bargaining 2016

ESRS S1 S1-17 §97, §103 (a),
§AR 103

The company is not aware of any confirmed reported incidents submitted through the whistleblowing channel or received by
the Whistleblower Group of discrimination involving the company, including its employees during the reporting period. No
public legal causes regarding discrimination has been brought against the organization during the reporting period.

176176

177177

GRI Standards

GRI Disclosure
requirements

ESRS Disclosure requirements

Nordic response

See the Own workforce chapter for more general information. For other relevant information pertaining to manufacturing
suppliers please refer to the Workers in the Value Chain chapter. Omissions: Incomplete. Nordic does not currently report fully
on these indicators.

407-1 Operations and
suppliers in which
the right to freedom
of association and
collective bargaining
may be at risk

Freedom of association'
and 'Collective bargaining'
are sustainability matters
for S1 and S2 covered by
ESRS 1 §AR 16. Hence this
GRI disclosure is covered
by MDR-P, MDR-A, MDR-T,
and/or as an entity- specific
metric to be disclosed
according to ESRS 1 §11 and
pursuant to MDR-M.

GRI 414: Supplier
Social Assessment
2016

3-3 Management of
material topics

ESRS G1 G1-2 §12 and §15
(a)

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. See in particular the Workers in our value chain chapter for details.

414-1 New suppliers
that were screened
using social criteria

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

ESRS G1 G1-2 §15 (b)

414-1 A: 100% of new manufacturing suppliers were screened using social criteria for the reporting period.
Omission: Nordic does not currently report fully on this indicator.

ESRS 2 SBM-3 §48 (c) i
and iv

414-2 A-E: Nordic is employing a risk based approach to supplier assessments. See Workers in the value chain for more details
on this.

GRI 415: Public
Policy 2016

3-3 Management of
material topics

ESRS G1 G1-5 §27

415-1 Political
contributions

ESRS G1 G1-5 §29 (b)

Nordic Semiconductor refrains from sponsoring political or religious groups to uphold a neutral and inclusive stance,
acknowledging the diverse perspectives of our stakeholders, and avoids any situations of perceived conflict of interest or
bribery. See Business conduct for more informatiopn. Omission: Incomplete. Nordic does not currently report fully on these
indicators.

GRI 418: Customer
Privacy 2016

3-3 Management of
material topics

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

ESRS S4 §10 (b); S4-1 §13
and
§16 (c); S4-2 §20; S4-4 §31,
§32
(a) and (b), §35, §AR 30,
§AR 33 (a); S4-5 §38, §41 (b)
and (c)

ESRS S4 S4-3 §AR 23; S4-4
§35

For general information regarding data privacy and personal data protection, see the Consumer and end user 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 or prior reporting period..