NORDIC SEMICONDUCTOR ASA

“Gender disparities in Tier 1 factories Based on industry assessments and supplier engagement data, semiconductor manufacturing facilities show gender distribution patterns where female workers predominantly hold operator positions, while engineering and management positions tend to be maledominated. This gender disparity, combined with unequal training and development opportunities, increases the risk of discrimination and unequal treatment in these work environments, potentially affecting worker well-being and retention. l l l Unsafe working conditions for transport workers Workers involved in the transportation of materials face occupational risks common to the logistics industry.”

Annual report 2024A · The company itself

“However, we recognize that our past growth and ongoing transformation have created an increased demand for a broader range of structured learning opportunities for all. Not meeting this demand would particularly affect our R&D engineers requiring advanced technical training, support-function employees needing cross-functional skills, first-time managers transitioning to leadership roles, and employees in smaller locations with limited local training resources.”

Annual report 2024A · The company itself

“This global structure is integral to our business model and innovation strategy. While this diversity is instrumental in leveraging our innovation potential and long-term organizational success, we recognize some challenges in some areas and locations where we're working to increase representation of certain groups, including women, who currently represent a minority in our workforce, particularly in technical roles (R&D and engineering) and leadership positions with differences across regions.”

Annual report 2024A · The company itself

“As a fabless semiconductor company, Nordic relies on a global network of specialized partners for manufacturing across Asia and Europe. We recognize that fair and respectful treatment of workers within this complex supply chain strengthens our business resilience and reputation while meeting customer and regulatory expectations.”

Annual report 2024A · The company itself

“In these upstream operations, workers may be exposed to hazardous conditions, including heavy machinery operation, chemical handling, toxic dust exposure, and underground work. At these levels of the supply chain, there are increased risks of insecure employment, extended working hours, and inadequate wages.”

Annual report 2024A · The company itself

“Building a strong corporate culture In the highly competitive semiconductor industry, where technical innovation is critical, our corporate culture presents a strategic opportunity to differentiate Nordic by nurturing our key intangible resource—our employees' specialized expertise. By fostering an environment that attracts and retains specialized talent, particularly in emerging IoT technologies, we can accelerate our cuttingedge IoT solutions while maintaining competitive advantage through reduced recruitment costs and increased innovation capacity.”

Annual report 2024A · The company itself

“Opportunity l l l S2 Workers in the value chain Material impacts, risks, and opportunities Location in the value chain Upstream Downstream Short-term Medium-term Long-term Workers in the furthest upstream segments of our supply chain, particularly in raw material extraction and early-stage processing, face risks to their rights and safety. In raw material production, several tiers removed from our direct suppliers, workers might be exposed to hazardous conditions, including heavy machinery, chemicals, toxic dust, and underground work. At these levels of the supply chain, workers face increased risks of insecure employment, long working hours, and inadequate wages, particularly in regions with developing regulatory frameworks. Child labor and forced labor are significant industry-wide concerns in raw material extraction and processing, especially affecting vulnerable groups like migrant workers in the mining and processing of materials like copper, tin, gold, plastics, and tungsten.”

Annual report 2024A · The company itself

“Nordic is a dynamic and global business with employees, offices, customers, and suppliers spanning multiple regions. We prioritize diversity, equity, and inclusion across the entire employee journey, recognizing its critical role in attracting and retaining top talent in a competitive landscape.”

Annual report 2024A · The company itself

“Support for affected employees For employees impacted by the downsizing, we provided severance packages covering 100% of affected roles. These packages included outplacement services to aid the transition into new employment.”

Annual report 2024A · The company itself

“As a global organization with a geographically dispersed workforce, providing equal access to learning opportunities is critical, regardless of location. To support this, we have introduced several e-learning tools, expanding our capacity for centralized, company-wide training.”

Annual report 2024A · The company itself

“As part of our commitment to equal opportunities, we aim to actively unlock potential that may be overlooked due to unconscious bias to ensure that all employees feel included and have equitable access to opportunities.”

Annual report 2024A · The company itself

“To enhance general awareness of unconscious bias and develop skills that promote an inclusive culture with equal opportunities for all, we plan to implement awareness training for both employees and people leaders. We also strive to undertake a comprehensive analysis to understand the state of equal opportunities across other demographic groups.”

Annual report 2024A · The company itself

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

Annual report 2024A · The company itself

“Identification of climate hazards: Short-, medium- and long-term climate-related hazards, including extreme weather events, water scarcity, and supply chain disruptions, are evaluated based on regional data and exposure levels specific to key supplier locations, considering scenarios aligned with limiting global warming to 1.5°C. This can especially affect our manufacturing suppliers located in Southeast Asia. These locations are susceptible to events like droughts and floods.”

Annual report 2024A · The company itself

“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.”

Annual report 2024A · The company itself

“Chronic risks (long-term shifts in climate patterns) 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’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.”

Annual report 2024A · The company itself

“Opportunities in climate-resilient products: Nordic has the opportunity to develop and market products and services that support customers' efforts to adapt to climate change impacts. This could include climate-resilient technologies, such as smart sensors, cellular IoT and energy harvesting, and infrastructure designed to withstand extreme weather or changing environmental conditions. Such innovation helps businesses prepare for climate risks, strengthen customer relationships, and open new revenue streams.”

Annual report 2024A · The company itself

“Identification of transition events: Our assessment identifies regulatory changes, customer expectations, and technological advancements as primary transition drivers. The demands from customers for our products being produced with renewable energy are increasing. Engagement and close relationships with manufacturing suppliers are of high priority to meet customer expectations.”

Annual report 2024A · The company itself

“A significant part of Nordic’s outsourced production is in Taiwan, where renewable energy is limited and involves significant costs. An increased focus and demand for Nordic’s products to be produced with renewable energy causes a risk of not meeting customers’ expectations for upstream operations and their use of renewable energy.”

Annual report 2024A · The company itself

“Financial risks from customer GHG expectations: Nordic faces financial risks related to customer expectations and regulatory requirements concerning GHG reductions. If Nordic’s products and supply chain fail to meet customer demands for reduced GHG emissions or renewable energy sourcing, the company may face loss of business or strained relationships with key customers.”

Annual report 2024A · The company itself

“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.”

Annual report 2024A · The company itself

“In 2024, Nordic's science-based GHG emission targets were approved by the Science Based Targets initiative (SBTi). As part of Nordic's longterm strategy and to minimize the risk of losing market share, the SBTi targets aim to achieve net-zero emissions by 2050.”

Annual report 2024A · The company itself

“Due to the advanced, capital-intensive technologies required for semiconductor fabrication that only a few suppliers, like TSMC and Global Foundries, can provide, Nordic is limited in its choice of wafer suppliers. Additionally, Nordic’s strict performance and reliability standards for critical applications further narrow the pool of qualified suppliers. As such, the key action for reducing emissions from purchased goods and services (approximately 80% of total emissions) is to engage with our outsourced manufacturing suppliers, who have the largest impact on our GHG emissions.”

Annual report 2024A · The company itself

“As Nordic´s first product to be fabricated using a 22-nanometer wafer process node, the nRF54 Series represent a significant advancement bringing key advantages such as improved performance and even lower power consumption. This manufacturing process also allows Nordic to source wafers from two fabricators, TSMC and Global Foundries, positioning the company for additional supply chain resilience moving forward.”

Annual report 2024A · The company itself

“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.”

Annual report 2024A · The company itself

“Our nRF54 Series SoCs (Systems-on-Chip) define a new era in terms of performance, offering a giant leap forward in our offering and outclassing the competition. Compared to the nRF52 Series which currently dominates our revenue, the nRF54L Series offers more than twice the processing power with less than half the power consumption, while the even more advanced nRF54H Series is five times as powerful and around six times as energy efficient. These numbers outperform the best general-purpose MCUs or SoCs on the market today.”

Annual report 2024A · The company itself

“The nRF54 Series was launched with the well-known nRF54L15 SoC to the broad market in November, accompanied by two new additions, the nRF54L10 and nRF54L05, allowing the company to support a wider range of Bluetooth LE and IoT applications with greater flexibility. By the end of the year, the multi-award winning nRF54H Series also saw its first volume shipments to early adopters. These fourthgeneration ultra-low power wireless SoCs represent a significant leap forward, bringing enhanced efficiency and exceptional processing power, while lowering power consumption, outstanding radio performance, and extending performance and flexibility across the widest range of IoT applications.”

Annual report 2024A · The company itself

“One of the most notable launches was the award-winning nRF9151 SiP, the smallest and lowest-power System-in- Package (SiP) for LTE-M/NB-IoT and DECT NR+. This fully integrated, pre-certified SiP is designed to simplify development across massive IoT markets, such as industrial automation, asset tracking, smart metering, and smart agriculture.”

Annual report 2024A · The company itself

“Nordic products are electronic components that are assembled by our customers as part of their end products. Nordic has several hundred customers, and there are large differences in our customers' production processes (their production line size, efficiency, location, end product design, other components and materials in design, and potential end product programming and testing).”

Annual report 2024A · The company itself

“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.”

Annual report 2024A · The company itself

“The Short-Range business unit remains the most mature and established, featuring market-leading solutions, longstanding relationships with global customers, and worldclass customer support.”

Annual report 2024A · The company itself

“The Long-Range business unit is scaling up, aiming to expand market penetration in asset tracking, metering, and industrial IoT. A key milestone in this strategy was the successful launch of the nRF9151 SiP in August, the lowestpower cellular IoT solution with industry-leading battery life.”

Annual report 2024A · The company itself

“Nordic strives to make its products more intelligent and efficient while continuously targeting to reduce the power consumption of products. Through low-power Internet of Things (IoT) solutions, Nordic has an opportunity to contribute to solutions for energy efficiency and energy management, attract new customers and increase demand for its products.”

Annual report 2024A · The company itself

“We are actively pursuing opportunities to expand our market presence by leveraging our expertise in ultra-lowpower IoT connectivity solutions. Our actions include continuous investment in R&D to enhance power efficiency and support critical sectors' evolving needs.”

Annual report 2024A · The company itself

“In addition to expanding into next-generation Wi-Fi technology, the Nordic has further diversified its portfolio by entering the Power Management Integrated Circuit (PMIC) market.”

Annual report 2024A · The company itself

“Nordic’s PMICs deliver ultra-low power consumption through highly integrated power management solutions that simplify wireless system design, minimize BOM, and reduce board space. As a leader in power efficiency, Nordic’s PMIC solutions optimize performance from the battery all the way to the antenna, ensuring seamless energy management. With its advanced features and compact design, the latest, multi-award winning nPM1300 PMIC sets a new standard in the industry.”

Annual report 2024A · The company itself

“Enhancing sustainability for customers with low-energy products Nordic’s products and applications for ultra-low and low-energy connectivity and computing enable sustainable applications in various sectors, including agriculture, health, and resource management. By offering better tracking and measuring systems, these solutions improve access to data, reduce costs, and enhance resource efficiency. This benefits end-users and customers in both environmental and operational ways. The global scalability of these applications not only helps drive customer satisfaction and sustainability efforts but also presents significant market opportunities as demand for energy-efficient IoT solutions continues to grow, aligning with our strategic focus on sustainable innovation.”

Annual report 2024A · The company itself

“Our business model of developing ultra-low-power connectivity solutions directly influences how we create both positive impacts and manage risks for consumers and end-users. By integrating sustainability into our strategy through our four focus areas, particularly ultra-low power connectivity and sustainable IoT solutions, we contribute to applications that enhance resource management, healthcare monitoring, and agricultural efficiency.”

Annual report 2024A · The company itself

“Nordic´s ultra-low-power wireless connectivity solutions play a crucial role in enabling AI-driven and connected devices. While much of the AI focus is on highperformance computing or generative AI, there is an ongoing silent revolution when it comes to compute power in the edge node. Here, Nordic is a key player, enabling faster decision-making and lower power consumption at the same time.”

Annual report 2024A · The company itself

“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.”

Annual report 2024A · The company itself

“Enhancing sustainability for customers with low-energy products Nordic’s products and applications for ultra-low and low-energy connectivity and computing enable sustainable applications in various sectors, including agriculture, health, and resource management. By offering better tracking and measuring systems, these solutions improve access to data, reduce costs, and enhance resource efficiency. This benefits end-users and customers in both environmental and operational ways. The global scalability of these applications not only helps drive customer satisfaction and sustainability efforts but also presents significant market opportunities as demand for energy-efficient IoT solutions continues to grow, aligning with our strategic focus on sustainable innovation.”

Annual report 2024A · The company itself

“8.1 Data processing, hosting, and related activities The identified activity "8.1 Data processing, hosting, and related activities" is eligible for taxonomy reporting as it encompasses Nordic's cloud service, nRF Cloud, which provides data hosting and processing. This platform is integral to supporting IoT applications through efficient connection, management, and monitoring of devices across our products' entire lifecycle.”

Annual report 2024A · The company itself

“By the end of 2024, the share of device containers made from recycled plastic was 46%. The total weight of plastic used for device containers in 2024 was 39,019 kg, of which 16,444 kg (42%) was recycled plastic.”

Annual report 2024A · The company itself

“Moreover, incorporating recycled materials into production is difficult due to the strict purity standards required for semiconductor manufacturing, which further deepens the reliance on virgin resources and accelerates the depletion of finite materials, such as rare metals. l l l l Packaging materials contribute to resource depletion In Nordic’s own operations and value chain, plastic and cardboard are the primary materials used for packaging and shipping products. Although a large portion of the packaging material is made from recycled or recyclable resources, the overall demand still contributes to the depletion of natural resources. A considerable amount of these materials is sourced globally, including regions like Asia, where resource extraction and production are more resource-intensive.”

Annual report 2024A · The company itself

“Packing materials contribute to resource depletion In Nordic’s own operations and value chain, plastic and cardboard are the primary materials used for packing and shipping products. This impact connects directly to our distribution model and operational practices.”

Annual report 2024A · The company itself

“Recycled plastic material for Nordic products packaging In collaboration with assembly suppliers in our upstream value chain, Nordic initiated a plastic reduction program in 2021, aiming to conserve natural resources and reduce the use of virgin plastic material in device packing, thereby preventing waste generation by decreasing the reliance on virgin plastic resources. Within this program, assembly suppliers have gradually shifted to using recycled plastic component reels for packing Nordic's devices.”

Annual report 2024A · The company itself

“Our business model of developing ultra-low-power connectivity solutions directly influences how we create both positive impacts and manage risks for consumers and end-users. By integrating sustainability into our strategy through our four focus areas, particularly ultra-low power connectivity and sustainable IoT solutions, we contribute to applications that enhance resource management, healthcare monitoring, and agricultural efficiency.”

Annual report 2024A · The company itself

“Enhancing sustainability for customers with low-energy products Our core business model of designing ultra-low-power IoT connectivity solutions creates downstream positive impacts concentrated in sectors including agriculture, healthcare, and resource management. Through our value chain, we partner with product builders (many of whom serve consumer markets) to integrate our solutions into end products that directly benefit users through improved data access and resource efficiency.”

Annual report 2024A · The company itself

“Recycled plastic material for Nordic products packaging In collaboration with assembly suppliers in our upstream value chain, Nordic initiated a plastic reduction program in 2021, aiming to conserve natural resources and reduce the use of virgin plastic material in device packing, thereby preventing waste generation by decreasing the reliance on virgin plastic resources. Within this program, assembly suppliers have gradually shifted to using recycled plastic component reels for packing Nordic's devices.”

Annual report 2024A · The company itself

“The average recyclable content of Nordic's products is 52% for QFN components and 23% for CSP components, based on the metal's weight relative to the total material weight as specified in the product material composition reports. Nordic's products are designed with an emphasis on reliability (durability and long-lasting performance), with a minimum expected operational lifespan of 9 years.”

Annual report 2024A · The company itself

“Our business model of developing ultra-low-power connectivity solutions directly influences how we create both positive impacts and manage risks for consumers and end-users. By integrating sustainability into our strategy through our four focus areas, particularly ultra-low power connectivity and sustainable IoT solutions, we contribute to applications that enhance resource management, healthcare monitoring, and agricultural efficiency.”

Annual report 2024A · The company itself

“Enhancing sustainability for customers with low-energy products Our core business model of designing ultra-low-power IoT connectivity solutions creates downstream positive impacts concentrated in sectors including agriculture, healthcare, and resource management. Through our value chain, we partner with product builders (many of whom serve consumer markets) to integrate our solutions into end products that directly benefit users through improved data access and resource efficiency.”

Annual report 2024A · The company itself

“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.”

Annual report 2024A · The company itself

“As a leader in low-power dual-band Wi-Fi 6 IoT solutions, Nordic differentiates itself by supporting both 2.4GHz and 5GHz bands, unlike many competitors who offer singleband solutions. This enables optimized throughput and seamless Bluetooth coexistence while empowering efficient, battery-operated Wi-Fi applications.”

Annual report 2024A · The company itself

“Nordic’s solutions power next-generation wireless peripherals, advanced audio devices, and smart wearables that enhance productivity while enabling high-quality exercise and entertainment experiences. With the rise of remote and hybrid work models, low-latency, high-efficiency connectivity solutions are critical for everything from wireless keyboards and headsets to VR/AR applications.”

Annual report 2024A · The company itself

“8.1 Data processing, hosting, and related activities The identified activity "8.1 Data processing, hosting, and related activities" is eligible for taxonomy reporting as it encompasses Nordic's cloud service, nRF Cloud, which provides data hosting and processing. This platform is integral to supporting IoT applications through efficient connection, management, and monitoring of devices across our products' entire lifecycle.”

Annual report 2024A · The company itself

“Healthcare is undergoing a digital transformation with remote patient monitoring and wearable health devices. This disruptive market segment is mainly driven by the large and growing markets for continuous glucose monitoring and drug delivery systems such as insulin injections.”

Annual report 2024A · The company itself

“Healthcare is undergoing a digital transformation with remote patient monitoring and wearable health devices. This disruptive market segment is mainly driven by the large and growing markets for continuous glucose monitoring and drug delivery systems such as insulin injections.”

Annual report 2024A · The company itself

“Nordic is very well positioned, enabling scalable and reliable connectivity for asset tracking, smart metering, and industrial IoT in general. The need for smart manufacturing, predictive maintenance, and connected logistics, Nordic’s low power Bluetooth LE, cellular IoT, DECT NR+, and Wi-Fi solutions offer scalable and reliable connectivity.”

Annual report 2024A · The company itself

“Last August, we launched the world’s smallest and most energy-efficient cellular module – the nRF9151.”

Annual report 2024A · The company itself

“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 (which 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 cyberattacks in end products.”

Annual report 2024A · The company itself

“Product security and end-user data protection risks This risk is concentrated in our downstream value chain, where our IoT solutions are integrated into devices processing sensitive user data. Our business model of providing connectivity solutions for applications like health monitoring, smart homes, and industrial control systems makes product security and data protection a systemic risk across our global markets.”

Annual report 2024A · The company itself

“The current financial effects of this material risk include continued investments in security certifications and vulnerability management systems. In the short term (within 12 months), we anticipate additional expenditure for implementing a new vulnerability tracking system and security training modules.”

Annual report 2024A · The company itself

“Material impacts and associated risks Cybersecurity risks across the value chain Nordic’s position as a semiconductor design company handling sensitive intellectual property creates inherent cybersecurity vulnerabilities that directly affect our business model and stakeholders.”

Annual report 2024A · The company itself

“Given our position as a semiconductor design company handling sensitive intellectual property, information security is critical to our business conduct. Our Information Security Policy, ISMS Secure Development Policy, and Quality Policy protect confidential information and technical data exchanged with manufacturing partners and customers.”

Annual report 2024A · The company itself

“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.”

Annual report 2024A · The company itself

“Operating in countries identified as high-risk on the Transparency International Corruption Perception Index exposes Nordic to potential corruption incidents through our business activities and partnerships. A corruption incident could result in significant fines and project delays, potentially compromising our ability to maintain crucial manufacturing relationships.”

Annual report 2024A · The company itself

“These activities, several tiers removed from our direct suppliers, include mineral extraction (copper, tin, gold, tungsten) and initial processing. These activities carry heightened risks of child and forced labor, particularly in conflict-affected regions like the Democratic Republic of the Congo (DRC) and surrounding countries for tin, tantalum, tungsten, and gold (3TG) minerals, and in parts of Asia for processing operations.”

Annual report 2024A · The company itself

“The policy scope covers our entire upstream supply chain involved in sourcing and processing of 3TG, with a particular focus on conflictaffected and high-risk areas, including the DRC and adjoining countries. The policy applies to all relevant suppliers who must adopt similar policies and due diligence measures throughout their own supply chains.”

Annual report 2024A · The company itself

“E5 Resource use & circular economy Material impacts, risks, and opportunities Location in the value chain Upstream Downstream Short-term Medium-term Long-term Integrated circuits are manufactured using raw materials such as metals, silicon, and rare minerals. These materials are often extracted through global mining operations, which contributes to resource depletion and environmental degradation. Moreover, incorporating recycled materials into production is difficult due to the strict purity standards required for semiconductor manufacturing, which further deepens the reliance on virgin resources and accelerates the depletion of finite materials, such as rare metals. l l l l Packaging materials contribute to resource depletion In Nordic’s own operations and value chain, plastic and cardboard are the primary materials used for packaging and shipping products.”

Annual report 2024A · The company itself

“These activities, several tiers removed from our direct suppliers, include mineral extraction (copper, tin, gold, tungsten) and initial processing. These activities carry heightened risks of child and forced labor, particularly in conflict-affected regions like the Democratic Republic of the Congo (DRC) and surrounding countries for tin, tantalum, tungsten, and gold (3TG) minerals, and in parts of Asia for processing operations.”

Annual report 2024A · The company itself

“The policy scope covers our entire upstream supply chain involved in sourcing and processing of 3TG, with a particular focus on conflictaffected and high-risk areas, including the DRC and adjoining countries. The policy applies to all relevant suppliers who must adopt similar policies and due diligence measures throughout their own supply chains.”

Annual report 2024A · The company itself

“Chronic risks (long-term shifts in climate patterns) 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’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.”

Annual report 2024A · The company itself

“The transportation of Nordic products downstream is done by the distributors and Nordic customers, and Nordic does not have the means to control that. l l l l E3 Water & marine resources Material impacts, risks, and opportunities Location in the value chain Upstream Downstream Short-term Medium-term Long-term High water consumption in semiconductor production Nordic’s suppliers use significant amounts of fresh water for cooling and cleaning during the semiconductor manufacturing process. This high level of water consumption contributes to the depletion of freshwater resources, particularly in regions with water stress. While suppliers have implemented water treatment and recycling mechanisms, the overall demand for water remains substantial. The semiconductor industry consumes approximately 1 liter of water per chip produced, leading to significant water usage, especially in areas that rely on groundwater sources.”

Annual report 2024A · The company itself

“As a fabless semiconductor producer, it is important to recognize the negative impact our outsourced manufacturing has on water resources. This impact is inherent to our fabless business model and value chain structure.”

Annual report 2024A · The company itself

“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.”

Annual report 2024A · The company itself

“From a financial perspective, Nordic has set clear priorities and is committed to achieving its long-term ambitions, targeting an average annual revenue growth above 20% throughout the decade and progressing toward an operating model profitability of approximately 25% EBITDA within five years.”

Annual report 2024A · The company itself

“In the semiconductor manufacturing process, the primary raw materials used include silicon and a range of essential metals, such as aluminum, copper, tin, and silver. These raw materials are integral to the creation and functionality of semiconductor devices.”

Annual report 2024A · The company itself

“These activities, several tiers removed from our direct suppliers, include mineral extraction (copper, tin, gold, tungsten) and initial processing. These activities carry heightened risks of child and forced labor, particularly in conflict-affected regions like the Democratic Republic of the Congo (DRC) and surrounding countries for tin, tantalum, tungsten, and gold (3TG) minerals, and in parts of Asia for processing operations.”

Annual report 2024A · The company itself

“Semiconductor manufacturing consumes a significant amount of energy. The markets indicate the increased cost of energy alongside growing demand for products with a low carbon footprint.”

Annual report 2024A · The company itself

“The semiconductor manufacturing process is energyintensive, particularly through electricity consumption, and contributes to significant emissions. This impact is inherent to our fabless business model, which relies on external manufacturing partners.”

Annual report 2024A · The company itself

“Given our position as a semiconductor design company handling sensitive intellectual property, information security is critical to our business conduct. Our Information Security Policy, ISMS Secure Development Policy, and Quality Policy protect confidential information and technical data exchanged with manufacturing partners and customers.”

Annual report 2024A · The company itself

“The current financial implications include our ongoing security infrastructure investment, representing approximately 20% of our IT budget.”

Annual report 2024A · The company itself

“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 40% and 20% of its operating expenses were denominated in NOK and EUR, respectively, in 2024. Fluctuations in the exchange rates between the USD, NOK or EUR currencies may have an adverse effect on the Group.”

Annual report 2024A · The company itself

“10% change in USD/NOK exchange rates impact around USD 0.8 million in monthly cost.”

Annual report 2024A · The company itself

“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.”

Annual report 2024A · The company itself

“Through our double materiality assessment, we have identified the following material impacts, risks, and opportunities related to pollution: In the semiconductor manufacturing process, air pollution is generated, particularly through the emission of volatile organic compounds (VOCs) during wafer processing. This impact is connected to our fabless business model and manufacturing value chain.”

Annual report 2024A · The company itself

“Certain hazardous substances, such as NMP, PFAS, boron oxide, and lead oxide, are used in manufacturing processes and present in Nordic products. This impact is directly linked to our product design decisions and manufacturing processes. Toxic characteristics of the substances pose potential risks to health and the environment, including pollution and harm to living organisms.”

Annual report 2024A · The company itself

“Moreover, incorporating recycled materials into production is difficult due to the strict purity standards required for semiconductor manufacturing, which further deepens the reliance on virgin resources and accelerates the depletion of finite materials, such as rare metals. l l l l Packaging materials contribute to resource depletion In Nordic’s own operations and value chain, plastic and cardboard are the primary materials used for packaging and shipping products. Although a large portion of the packaging material is made from recycled or recyclable resources, the overall demand still contributes to the depletion of natural resources. A considerable amount of these materials is sourced globally, including regions like Asia, where resource extraction and production are more resource-intensive.”

Annual report 2024A · The company itself

“Packing materials contribute to resource depletion In Nordic’s own operations and value chain, plastic and cardboard are the primary materials used for packing and shipping products. This impact connects directly to our distribution model and operational practices.”

Annual report 2024A · The company itself

“The use of fossil fuels in the downstream transportation of Nordic products generates harmful pollutants, including NOx, SO2, ozone, and particulate matter. While the company's products are lightweight and primarily transported by air, this still contributes to air pollution. The emissions are limited due to the lightweight nature of the products, but transportation remains a significant source of pollution in the value chain, both in the short and long term, due to the ongoing reliance on fossil fuels.”

Annual report 2024A · The company itself

“In the semiconductor manufacturing process, the primary raw materials used include silicon and a range of essential metals, such as aluminum, copper, tin, and silver. These raw materials are integral to the creation and functionality of semiconductor devices.”

Annual report 2024A · The company itself

“Semiconductor manufacturing consumes a significant amount of energy. The markets indicate the increased cost of energy alongside growing demand for products with a low carbon footprint.”

Annual report 2024A · The company itself

“These risks may affect our business model through potential supply chain disruptions and increased sourcing costs.”

Annual report 2024A · The company itself

“These risks may influence business operations through production disruptions, quality issues, and reputational damage.”

Annual report 2024A · The company itself

“The policy requires manufacturing suppliers to sign adherence to the RBA Code of Conduct, with an obligation to cascade these requirements to their next tier of suppliers.”

Annual report 2024A · The company itself

“These safety risks pose challenges to our business model through potential delivery delays and increased logistics costs.”

Annual report 2024A · The company itself

“During fiscal year 2024, the percentage of Nordic's revenue associated with end customers in China was around 10%.”

Annual report 2024A · The company itself

“Waste from packaging material Handling waste from packaging equipment by Nordic’s direct customers and distributors can have environmental impacts. Improper waste management, such as related to incineration, landfilling, or recycling, may lead to the release of pollutants. While some recycling efforts are in place, effective waste management and continued use of plastic packaging materials remain challenges. l l l l Waste is generated during the semiconductor manufacturing process from the use of materials and components.”

Annual report 2024A · The company itself