Traditional businesses are growing rapidly

Nordic reported revenue of $127.1 million in the fourth quarter of 2020, an increase of 53% compared to the fourth quarter of last year. Total revenue for the year was $405.2 million, up 41% from 2019, with 2.4g proprietary agreements up 27% and low-power Bluetooth chips up 43%. Through the end of last year, the order backlog rose nearly fivefold to a record $492 million, with strong demand from Cat 1 customers as well as the broad mass market. Due to supply chain constraints, Major Chip suppliers in Taiwan have informed Nordic of chip shortages in 2021, and Nordic has booked enough chip orders. Current chip delivery forecasts indicate Nordic will have room to increase production by at least 25% from 2020 to 2021. Wafer shortages are expected to peak in the second quarter of 2021, with improvements in the second half allowing shipments to increase.

Q4 Revenue: By product application

From the perspective of product application, all markets are in a growing trend, among which, the demand for home office and home entertainment drives household consumption. 2.4g and BLE have a significant increase in consumer shipments, and health detection products have the fastest growth. Growth in the wearable industry has slowed due to the epidemic and the replacement of smart wristbands to watches. It is worth mentioning that the proportion of smart home and smart retail shipments has exceeded that of wearable shipments. The picture

Annual revenue: by product technology

Bluetooth's annual revenue growth of 43% in 2020 is well above the prescribed growth rate of 20% to 30%, with a compound growth rate of 19% to 29% over the past 5-6 years. Revenue from 2.4g proprietary agreements grew 27% in 2020, with strong demand from key customers significantly better than expected. In addition, LTE has started production and will reach $6.5 million in revenue by 2020.

Diversified wireless product coverage

We can summarize Nordic's product form in the past five years in 12 words: blue dot breakthrough, multi-point networking, near and far.

Dot breakthrough

Consolidate the market share of low power Bluetooth, 2.4g proprietary protocol; Provide different types of low power Bluetooth chips to cover the ever-changing needs of the mass market; Develop LE AUDIO products, cooperate with T2 Software, purchase LC3 Codec license and bet on LE AUDIO market.

The crossover SoC 5340 is officially mass-produced, with dual-core M33 main frequency, DSP kernel, floating point operation unit, Trust Zone, which is sufficient to handle audio codec, AI algorithm, security encryption and other application requirements. The product can cover a variety of new application scenarios.

Multi-point network

Expand the support and coverage of 2.4g multi-mesh protocol, support Zigbee, SIG Mesh and Thread Mesh networking wireless technology, and support multi-protocol functions in a single chip through time-sharing multiplexing technology, which solves the problem that traditional Zigbee and Thread networking protocol cannot communicate with mobile phones, computers, And user interaction without Wifi coverage.

Add Wi-Fi line

In addition to low-power data transmission applications, there is also a big market for wireless applications of the Internet of things: graph application. The low-power video graph application market emerged in 19th, and the data throughput of graph transmission is usually 5Mbit/ps-10Mbit/ps, or even higher, which is a market lacking in other low-power wireless technologies except for Wi-Fi. The acquisition of Imagination'S Wi-Fi IP business, including its intellectual property and 81 engineers, enables Nordic to expand its Wi-Fi product line to cover Wi-Fi 4 to Wifi 6 products and market applications. As Nordic is a company mainly engaged in the IoT market, its Wi-Fi products are most likely to appear in the form of SoC or SiP, Wifi 6 should be the best entry point. Wifi 4 has already attracted many players, such as Realtek, Broadcom, Cypress, Espressif, Hisilicon, TI, Siliconlab, Dialog, etc., among them, not many companies can launch Wi-Fi 6 products, and even fewer can launch low-power Wi-Fi 6 soCs. Most oF the original manufacturers of the Internet of Things are fighting on the battlefield of Wi-Fi 4.

Add LTE - M/NB IoT

In 2018 (2017), Nordic began to expand the Internet of Things (iot) long-distance communication while achieving good results in 2.4G. The revenue increased from $1 million in 2019 to $6.5 million in 2020. This market may become one of the growth points of Nordic company in the future.

Nordic's main business starts from 2.4g gamepad, expands to 2.4g keyboard and mouse, 2.4g PC peripheral accessories, wearable application bracelet watch BLE, tracker BLE, shared bike BLE, smart lock BLE, smart home BLE&Zigbee, etc. The 20-year performance and market revenue from 2000 to 2020 are shown below.

There is no wireless technology that can cover all the current applications of the Internet of Things. Bluetooth, Wifi, LTE, NB IoT, 4G, LoRa and so on all have limitations. Each technology has its own application scope and scenarios. Generally speaking, traditional Bluetooth is suitable for audio and point-to-point data transmission, Wifi is suitable for picture transmission, LTE and NB IoT are suitable for long-distance small data transmission, LoRa is suitable for building automation control and wireless meter reading application coverage, Zigbee and SIG Mesh are suitable for small-scale networking, and smart home linkage. Single chip; Low power consumption; Multiprotocol time-sharing multiplexing; A variety of choices permutation and combination, aiming at the target market.

Market horizontal benchmarking

Silicon Lab

Silicon Lab's traditional wireless is in the field of 433M Sub 1G. Later, it acquired Bluetooth product line through the acquisition of Bluegiga, and then Ember Zigbee product line. After fusion, it launched BLE+Zigbee SoC, and finally acquired Redpine Wifi product line.

TI

Chipcon acquired Chipcon with Sub 1G, Zigbee, and BLE product lines, whose Wi-Fi SOC product line was derived from the replacement of its own Wi-Fi BT 2-in-1 chip.

Dialog

BLE, which has traditionally cultivated the wearable market, acquired Silicon Motion's ultra-low-power Wi-Fi line in 2019.

Cypress

Traditional MCU, BLE manufacturer, through the acquisition of Broadcom IoT Business Division in 2016, complete wi-fi, BT, BLE product lines.

Semiconductor companies in the field of IoT are moving towards a diversified, multi-protocol, low-power SoC in the hardware layout, but this is not enough. From an engineering point of view, a set of SDK, if suitable for all the wireless product development of the company, will save a lot of research and development time cost. But the integration of product lines and software platforms is a more difficult challenge for semiconductor manufacturers than acquisition.