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Q2 2012 Investor Presentation Svenn-Tore Larsen, CEO Robert Giori, CFO July 13, 2012

wireless living ....

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Solid Q-over-Q improvement across key revenue, operating profit, cash flow metrics

• Revenue of MUSD 38.7

• Order inflows of MUSD 21.7

• Operating profit (EBIT) of MUSD 9.4 (24% EBIT margin)

• Cash flow from operations of MUSD 5.1

Business Outlook: Nordic’s competitive lead strengthens in ultralow power wireless market with release of next generation product platform

• Nordic sets the new benchmark in ultralow power wireless with nRF51 platform

– Features improved processor, lower power consumption, ease of SoC development

• Revenue expected to grow in 2H 2012 with recovery in PC accessories market (following Windows 8 launch) and new product releases across other wireless categories

• Bluetooth Smart (low energy) wireless applications to begin initial ramp up from 2H 2012

– Bluetooth Smart technology will create vast new growth opportunities for Nordic’s solutions to connect with mobile handsets, PC’s and home media devices.

– Strong progress, with design wins across several emerging wireless categories

Strong growth in operating profits in Q2 2012

FINANCIAL HIGHLIGHTS Robert Giori, CFO

wireless living ....

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Q2 2012 Financial Highlights (MUSD)

MUSD

Financial objectives Q2 2012 Q2 2011 Comments

Growth

Revenue 38,7 38,4 Solid sequential growth from prior Q

Order Inflow 21,7 44,9 Shortening order cycle, with low visibility

Profitability

Gross Margin % 52 % 43 %

Operating Profit (EBIT) 9,4 7,3

EBIT Margin % 24 % 19 %

Net Profit after tax 6,5 5,3

Cash Flow

Free Cash Flow 4,5 5,1 Strong cash flow in YTD

Cash Balance 24,2 24,7 Repayment of MUSD 6 loan during YTD

Accounts Receivable 32,5 33,0

Inventory 18,8 28,2 Improved inventory management

Higher margin product mix / cost efficiencies

offset large investments in R&D

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Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

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Group Revenues

Segment revenue by quarter, 2009 – Q2 2012 (MUSD)

Mobile devices

Home electronics devices

PC accessories Other Sensor networks

ASIC / Consulting

Sequential improvement from Q1 2012

Growth in all product segments outside of PC Accessories

• Q2 2012 Revenue of MUSD 38.7 (1% growth from prior year) – PC accessories segment continues to lag (3% decline from prior year), but is expected

to improve with PC market following Windows 8 release – Other non-PC market segments grow by 11% from prior year

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PC Accessories Wireless mouse, keyboard, presentation tools

Q2 Revenue: MUSD 27.3 (MUSD 28.2)

• Weaker PC market has impacted sales of accessories.

Consulting services Custom electronics design

Q2 Revenue: MUSD 0.2 (MUSD 0.1)

• Supporting existing ASIC customers only, not a focus area for growth

Mobile devices Sports / medical monitors, mobile accessories, wireless payments

Q2 Revenue: MUSD 4.5 (MUSD 4.1)

• Strong growth in Sports category, offset by lower sales of RF-SIM

Home electronics devices TV / media remotes, audio streaming, game controls, toys

Q2 Revenue: MUSD 1.3 (MUSD 1.1)

• Several new designs drive growth across multiple categories

ASICs (application specific IC’s) Wide sector span

Q2 Revenue: MUSD 4.1 (MUSD 3.8)

• Growth spread across diverse products with custom electronics designed by Nordic

* Reflects Q2 2012 revenue (Q2 2011 in parenthesis)

Other Sensor networks Industrial automation, building sensors, RFID systems, automotive

Q2 Revenue: MUSD 1.3 (MUSD 1.1)

• Growth in RFID and automotive product categories

Segment performance – Q2 2012

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Revenue mix

• 82% of revenues are to Asian distributors in Q2 2012 – Many component units are sold through distribution to Asian OEM’s for

manufacture and export of devices to North America / Europe

Revenue breakdown by region: Q2 2012

San Jose

Trondheim

Oslo

Seoul Tokyo

Hong Kong Taiwan

Amcor, Philippines

North America 6%

Europe 12%

Asia / Pacific 82%

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Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

Order inflow / order backlog

Order Inflow and Backlog 2009 – Q2 2012 (MUSD)

Backlog

Order Inflow

Order backlog is abnormally high in 2010 due to supply shortages

Order cycle shortens in Q2 2012, causing decline in order inflow and backlog

• Order inflow of MUSD 21.7 in Q2 2012 – Slowdown in order inflows primarily driven by temporary factors, including a

changeover of PC accessories product lines in advance of Windows 8 OS launch

• Order backlog of MUSD 20.4 at quarter-end, as order cycle shortens

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30%

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60%

Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

Gross Margin

• Gross margin increases to 52 % in Q2 2012 – High margin product / segment mix in Q2 2012, with volumes weighted toward

smaller customers – Manufacturing process improvements contribute to higher margins

Gross Margin % of revenue 2009 – Q2 2012

Falling GM% from 2010 – Q2 2011, with increasing proportion of sales to largest customers

GM% improves from 2H 2011, with volume shift to smaller customers and production efficiencies

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Q1/09 Q2/09 Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12

Operating Profit by quarter 2009 – Q2 2012 (MUSD)

Strong sequential increase as revenue grows and gross margins improve

• Operating profit (EBIT) in Q2 2012 of MUSD 9.4 (24 % EBIT margin) – 28% growth from prior year – Improved gross margin offsets higher operating expenses

Operating Profit

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Cash Flow Breakdown Q2 2012 (MUSD)

• Free Cash Flow of MUSD 4.5, with continued reduction in inventory balance

• Net Cash Flow of MUSD 1.5 after repayment in MUSD 3 of short-term debt

0 2 4 6 8 10

Cash Flow

Profit before tax

Add: Depreciation

Cash Flow from Operations

Less: CapEx, Cap R&D

Less: Debt repayment

9.4

+0.7

-3.3

5.1

4.5

-3.0

1.5

Less: Change in Work Cap

-1.7

Free Cash Flow

Net Cash Flow

-0.6

Less: Income tax payment (2011)

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Strong growth in operating profit as gross margins improve

Q2 2012 Financial summary

Revenue growth

Profitability

Cash Flow

• Group revenue of MUSD 38.7 (MUSD 38.4) – PC accessories revenue falls by 3% from prior year – All other segments grow by 11%

• Order inflow of MUSD 21.7 (MUSD 44.9) – Shortening order cycle, as PC accessories

market transitions to new Windows OS – Order backlog of MUSD 20.4

• EBIT of MUSD 9.4 (MUSD 7.3) – Operating profits increase as gross margins

improve, driven by revenue mix and production cost efficiencies

• Free Cash Flow of MUSD 4.5 (MUSD 5.1) – Repayment of MUSD 3 credit line balance – Ending cash balance of MUSD 24.2

BUSINESS OVERVIEW Svenn-Tore Larsen, CEO

wireless living ....

Short-term Outlook

• Recovery in PC market in 2H 2012 and new wireless product releases are expected to drive revenue growth in 2012

– Global demand for PC’s is expected to recover during 2H 2012, due to:

• Release of MS Windows 8 operating system • Growth of Ultrabook category within notebook PC’s • Restock of inventory levels within sales channels

– Wireless PC mice / keyboards continue to grow in popularity, replacing wired solutions

– Other categories (Home Electronics, Mobile devices, etc.) grow with new product releases and increased consumer adoption of wireless accessories

Longer-term market opportunity

• New Bluetooth Smart products will generate next wave of market growth, as standard will enable wireless sensors to connect with billions of mobile handsets, PC’s and media devices.

– Very strong support from major industry players, with many new products implementing Bluetooth / Bluetooth Smart Ready technologies

– Nordic has leading technology position within Bluetooth Smart for peripheral devices, shipping in volumes from late-2012

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Business Outlook

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New market opportunities with Bluetooth Smart

Many new ULP product categories will emerge, as Bluetooth Smart (low energy) will enable wireless sensors to connect directly with mobile handsets, PC’s and home media devices.

• ABI Research estimates that the Bluetooth Smart market will exceed 700M units in 2015*

• Mice

• Keyboards

• Game controllers

• Presentation remotes

• Security solutions

Personal computers desktops, notebooks, tablets

• Fitness sensors

• Medical monitors

• RFID / keys

• Watches

• Mobile payments

• Other local sensors

Mobile devices Handsets, MP3 players, other portables

• Remote controls

• 3D glasses

• Game controllers

• Audio solutions

• Toys

• Home automation

Home electronic devices TV’s, set top boxes

• Remote controls

• Environment sensors

• RFID / Security

• Operations monitors

• Smart energy

Other sensor networks Autos, buildings, appliances, infrastructure

* Source: ABI research, March 2012. Includes peripheral units only (BT 4.0 single mode)

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2009 2010 2011 1H 2012

Unit sales of development kits

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1984 • Strong interest in development kits from new customer segments (non-PC peripherals)

Target applications include:

– RFID / Proximity applications

– Mobile security tags

– Fitness / health monitors

– Home media remotes and peripherals

– Temperature sensors

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Strong growth in demand for development kits

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• 2087 development kits distributed in 1H 2012, an increase of 35% from 1H 2011

– Growth in demand driven by Bluetooth Smart development kits

– New reference designs for Bluetooth Smart are expected to further drive interest in Nordic’s development kits

Second Half

First Half

Bluetooth Smart technology drives growth in demand for Nordic’s development kits, a positive leading indicator of new product releases

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Nordic sets the benchmark in ultra-low power wireless … 17

Nordic Semiconductor has been the market leader in ultra-low power wireless solutions (2.4 GHz RF) since the launch of its breakthrough first generation 2401 IC platform in 2002.

Undisputed market leader

– Over 600M IC units sold to date

– Proprietary 2.4 GHz, ANT+, Bluetooth low energy protocol (Bluetooth Smart)

– Competition is still trying to catch up with performance of 2nd generation IC’s

Nordic has just moved the wireless benchmark, again … 18

Breakthrough new specifications

Slashes current consumption by up to 50%

Up to 10x more on-chip processing power

Greatly improved radio performance

Low bill of materials cost

New SoC software architecture greatly simplifies product design

Introducing the next generation wireless product platform from Nordic

Nordic sets the new industry benchmark for ultra-low power wireless solutions with breakthrough specifications in performance, power consumption, and ease-of-use

Series of ICs and Software for Bluetooth® low energy, 2.4GHz RF and ANT™ applications

What is the nRF51 series product platform?

nRF 51 - New system-on-chip platform for ultra-low power wireless applications

THE BASICS:

• IC architecture

– Multi-protocol 2.4GHz radio

– ARM® Cortex™-M0 processor

– Ultra low power and high performance

• Software architecture

– Supports proprietary 2.4 GHz, ANT+, and Bluetooth low energy protocols

– Designed for simple application code-development

• Common platforms

– Shared IC and software architecture

– Code and Pin compatibility

– Easy to migrate and reuse across designs

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nRF 51

Breakthrough new specifications 20

Improved hardware performance

Up to 10X more processing power 100X faster start-up Up to 9.5 dB better link budget

Longer battery lifetime

Up to 50% lower average current consumption Peak current reduced to sub-10 mA Greater efficiency enables less time spent in active mode,

maximal time spent in sleep mode

System-on-chip availability

Complete Bluetooth low energy and ANT SoC’s Reduces development requirements and risk Lower cost bill-of materials than purchasing and integrating

components separately

Ease of software development

Unique software architecture eases product design Clean separation of protocol stack and application code Simple application development model

Maximum reuse and simple migration

Multi-protocol radio Common IC and software architecture Code and Pin compatibility ARM Cortex ecosystem

Higher performance, lower power consumption, ease of system-on-chip development

nRF51 advantages: Improved hardware performance 21

Complete hardware redesign – based on more than 10 years of experience

• Processor: ARM® Cortex™-M0

– Up to 10X more processing power

– 100X faster start-up

– Improved code density

• Radio: Ultra-low power 2.4 GHz

– Up to 9.5 dB better link budget (Improved range and robustness)

– Multi-protocol: Enables flexible switching between Bluetooth low energy, ANT and proprietary 2.4 GHz modes

• Fast and flexible interface between radio and processor

• And many other enhancements...

nRF51 advantages: Longer battery lifetimes 22

New system design results in up to 50% lower average current consumption

• Radio upgrade reduces peak current (RX and TX) to less than 10 mA

• System spends much less time active, more time in sleep mode

– ARM Cortex M0 enables faster start up and processing of application and protocols – Advanced new power management scheme. Only blocks which are active are

consuming power. – PPI controller enables peripherals to operate without using the CPU

More efficient management of each transmission cycle

• Start-up

• Application and protocol pre-processing

• Transmit and receive

• Protocol post-processing

• Sleep mode

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Transceivers Connectivity-on-Chip (Connectivity only)

System-on-Chip (Connectivity + applications)

Application Specific

Application Generic

2.4GHz PHY

Baseband

Nordic Transceiver chip

Protocol

Application

3’rd party MCU

2.4GHz PHY

Baseband

Nordic Connectivity chip

Protocol

Application

3’rd party MCU

2.4GHz PHY

Baseband

Nordic System-on-Chip

Protocol

Application

Low

High

Syst

em B

OM

nRF51 advantages: System-on-chip availability

Current Nordic ANT and Bluetooth low energy IC’s

Nordic nRF 51 ANT and Bluetooth low energy IC’s

High performance SoC’s for Bluetooth low energy / ANT reduce development time and cost

• Reduces total BOM and manufacturing cost compared with integrating external components

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nRF51 advantages: Ease of software development

Key benefits

• Clean separation of code for application and protocol stack

– Two different compiles

– No link time dependencies

• No proprietary application framework

– Application developer sees a standard Cortex-M

– No scheduler or RTOS dependencies

– Full control over the choice of operating environment

• Transparent and run-time protected stack

• Independent development

• Independent testing and verification

• Easy code porting, migration and reuse

A new paradigm in SoC software architecture - greatly simplifies application development

ARM Cortex ecosystem

Common IC and software

architecture

Code and Pin compatibility

Multi-protocol ULP radio

nRF51 advantages: Maximum reuse and simple migration

Common architecture supporting multiple protocols and based on ARM Cortex M0

• Accelerates development of new products, while reducing risk

Proprietary 2.4 GHz

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• Noridic sales engineers hit the road to teach application developers worldwide about the great new features and real-world benefits of developing with Nordic’s nRF51-series SoCs

• Free development tools to participants – estimated 2000 units

• 16 destinations worldwide:

Boston – Chicago – San Jose – Seattle – Paris – Amsterdam – Munich – Copenhagen – Bangalore – Singapore – Shenchen – Taiwan – Shanghai – Beijing – Seoul – Tokyo

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Spreading the word on the nRF51

Announcing the Nordic Global Tech Tour – September / October 2012

Strengthening Nordic’s position in a growing market

Growth of Bluetooth Smart Greatly expands the market opportunity Enables connection to phones, etc.

New wireless applications Connected TV remotes, medical devices, many more accessories

Market forces

Nordic’s competitive advantages

Adoption of wireless technology Eliminate wires between devices Growth of sensor networks

Ultra-low power wireless pioneer and market leader

• Clear market leader - over 600M IC’s sold • Key contributor to BT low energy standard

• Board member of Bluetooth SIG • Pioneer in ANT connectivity IC’s

Best-in-class technology platforms • High performance connectivity

• Lowest power consumption • SoC’s, protocol stacks, application

software and reference designs

Key account relations • Leader in major segments

• Strong entry position in new segments • Application / market knowhow

Competitive cost structure • High volumes on product platforms

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