Nordic Semiconductor (Buy, TP: NOK160.00) - Not too bad given tail-end of 55nm
While implied guidance for H1 revenues is ~1–4% below our forecast and consensus, the underlying sequential performance is directionally in line with the broader set of peers to have reported to date. We find this growth and gross margin profile solid, given we are at the tail-end of the life of Nordic’s 10-year-old 55nm technology platform. Combined with the arguably unprecedented level of uncertainty for the company’s customers, we find it achieving a ~50% gross margin and accelerated Cellular IoT momentum while competing with companies manufacturing on process nodes with materially better cost structures impressive. While we have cut our 2025e estimates, and our target price to NOK160 (174), we reiterate our BUY ahead of the ramp-up of the new 22nm 54-series, likely in the next 12–18 months.Nordic Semiconductor is a fabless semiconductor company which designs, sells and delivers integrated circuits and related intellectual property for use in short-range wireless applications. Co. is engaged in ultra-low power wireless solutions, based on its proprietary 2.4 Gigahertz Radio Frequency and Bluetooth Smart technology. Co.'s components are manufactured by subcontractors and sold through electronics distributors to manufacturers of branded electronics across a range of product categories. These categories include personal computer and tablet accessories, sports/health monitors, mobile phone accessories, media remote controls, home and industrial automation, and other applications.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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