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Nordic Semiconductor, as its name suggests, is a Norwegian semiconductor supplier listed in Oslo, which has the distinction of being fabless, that is to say, which does not have a production asset but under- processes the manufacture of its products. Its three major manufacturing partners are the Taiwanese TSMC, the American GlobalFoundries and the Malaysian SilTerra.
The group specializes in radio wave communication equipment, more particularly in so-called “low energy” Bluetooth (called Bluetooth LE, for Low Energy) where it has a 40% market share. It is also present in wi-fi and cellular equipment. In the Bluetooth LE specialty, its first two competitors SiLabs and Telink only account for a quarter of Nordic’s market share. It is therefore a fragmented compartment with interesting opportunities for consolidation, especially as the sector continues to expand markedly: equipment deliveries should double there by 2025.
Already in continuous expansion for ten years, its current addressable market is potentially only a fraction of what it will be in ten years when the Internet of Things (“IoT” for Internet of Things) will have broken through. Which, no doubt, is only a matter of time. Among individuals, there is a good chance that most electronic devices will soon communicate with each other on a permanent basis: cars, household appliances, telephones, etc. Opportunities in industry, logistics, healthcare or payment systems, to name a few, seem limitless.
Nordic Semiconductor continues to capitalize on its strengths by investing its entire R
Nordic’s operational background speaks for his ability to grab the ball on the leap. Its historical activity of processors and integrated circuits has stagnated or even declined for fifteen years, but the group took the decision in 2011 to position itself on Bluetooth LE. He took it well since he was able to multiply his turnover by more than four, from 140 million dollars in 2011 to 610 million dollars last year. Will he be able to recreate the feat with the advent of IoT and 5G?
The Norwegian seems ideally positioned to seize this new growth cycle: its catalog of long-distance equipment naturally complements its catalog of short- and medium-distance equipment, which makes it possible to achieve interesting synergies in terms of manufacturing and develop a better integrated offer for customers, in addition to making R efforts more profitable
We have a player in great shape and well positioned. However, we must put the past into perspective, especially if we are finally at the top of a cycle. The most conservative investors will stay away for the lack of safety margin. Those who are less risk averse will see it as a long-term opportunity.
