1. Rapid Growth of Traditional Business
Nordic Semiconductor (Nordic or the Group) reported total revenue of USD 127.1 million in Q4 2020. This was an increase of 53% from USD 83.1 million in Q4 2019. For the full-year 2020, revenue amounted to USD 405.2 million, which was an increase of 41% from USD 288.4 million in 2019. Bluetooth revenue increased by 43% to USD 316.0 million, and proprietary revenue increased by 27% to USD 76.1 million. Order backlog increased almost fivefold to a record high USD 492 million at the end of the year, reflecting strong demand across all end-user markets both from large tier-1 customers and the broad market. Given constraints in the supply chain, the company has been informed by its main wafer supplier in Taiwan of limitations in wafer allocation for 2021. Based on the high demand, Nordic placed early orders for wafer volumes that would allow for a significant production increase also in 2021. Current forecasts for wafer deliveries indicate that Nordic will have room to increase production by a minimum of 25% from 2020 to 2021. The wafer shortage is expected to have the largest impact in Q2 2021, with higher volumes expected in the second half of the year.
• Quarterly Revenues: Divided by End-Product Markets
From the perspective of end-product markets, all markets are in a growth trend. The demand for home office and home entertainment drives family consumption. 2.4G and BLE have a substantial growth in consumer shipments, and health testing products have the fastest growth. The growth of the wearable industry has slowed down due to the epidemic and the upgrading of smart bracelets to watches. At present, the proportion of smart home and smart retail shipments has surpassed that of wearable shipments.
• Annual Revenue: Divided by product technology
The Bluetooth revenue growth of 43% in 2020 exceeded the medium-term 20%-30% annual growth rate previously indicated for this technology. In the past 5 ~ 6 years, the compound growth rate has been as high as 19% ~ 29%. 2.4G Proprietary revenue increased by 27% in 2020, and the strong demand from major customers is significantly better than expected. In addition, LTE has started its volume, with revenue reaching USD 6.5 million in 2020.
2. Diversified Wireless Product Coverage
There are some points to summarize Nordic product form in the past five years: make a breakthrough in BLE, create multi-point networking, cover far and near networks.
• Make a Breakthrough in BLE
Nordic consolidates the market share of Bluetooth low energy and 2.4G proprietary. It also provides different types of BLE chips for high, middle and low end to cover the ever-changing mass-market needs. Nordic cooperated with T2 software, purchased LC3 Codec licenses, and bet on the LE Audio market.
The SoC nRF5340 is officially mass-produced. It integrates 128 MHz / 64 MHz Arm Cortex-M33 with FPU, DSP instructions, and Arm TrustZone. It can meet the application requirements of audio codec, AI algorithm, security encryption and others. Its products can cover a variety of new applications.
• Create Multi-Point Networking
The coverage of the 2.4G multi-Mesh protocol has been expanded to support Zigbee, SIG Mesh, and Thread Mesh networking wireless technologies. And through the time-sharing multiplexing technology, the single-chip can support multiple protocol functions at the same time, which solves the problem of user interaction that the traditional ZigBee and thread networking protocols cannot interact with mobile phones, PC, even in the scene without Wi-Fi.
• Expanding into Wi-Fi
In addition to the IoT low-power data transmission applications, image transmission applications also occupy a larger market share. The low-power video image transmission market has emerged in 2019. The data throughput of image transmission is usually 5 Mbit/ps ~ 10 Mbit/ps, or even higher. At present, it is a market lacking in low-power wireless technologies other than Wi-Fi. With the acquisition of imagination Wi-Fi IP business, including its intellectual property rights and 81 engineers, Nordic has been able to expand its Wi-Fi product line, covering a variety of Wi-Fi products and market applications from Wi-Fi 4 to Wi-Fi 6. Nordic focused on the IoT market, so its Wi-Fi product form may appear in the form of SoC or SiP. Wi-Fi 6 should be the best entry point. There are many players in Wi-Fi 4 currently, such as Realtek, Broadcom, Cypress, Espressif, Hisilicon, TI, Silicon Labs, Dialog, etc. Among them, there are not many companies that can launch Wi-Fi 6 products, and even fewer can launch low-power Wi-Fi 6 SoCs. Most of the original IoT manufacturers are fighting on the Wi-Fi 4 field.
• Expand into LTE-M / NB IoT
While achieving good grades in 2.4G, Nordic began to expand the IoT long-range communication in 2018 (2017). Its revenue has grown from USD 1 million in 2019 to USD 6.5 million in 2020. And the market may become one of the growth points for subsequent Nordic in the future.
3. Nordic Industry Vane
Nordic main business starts with 2.4G gamepads, expands to 2.4G keyboards and mice, 2.4G PC peripheral accessories, and then wearable applications such as BLE bracelet, BLE watch, BLE tracker, BLE shared bicycle, BLE smart lock, BLE & Zigbee smart home, etc. The performance and market revenue from 2000 to 2020 are as follows.
There is no wireless technology that can cover all the applications of the current IoT. Bluetooth, Wi-Fi, LTE, NB-IoT, 4G, LoRa all have limitations. And each technology has its scope of application. In general terms, traditional Bluetooth is mostly used for audio and point-to-point data transmission. Wi-Fi is mostly used for image transmission. LTE and NB-IoT are mostly used for long-distance and small data transmission. LoRa is for building automation control and wireless meter reading applications. ZigBee and SIG Mesh are used for small-scale networking as well as smart home linkage. According to different market needs to choose a solution, maybe only need a single chip or a low power consumption function, maybe need the multi-protocol time-sharing multiplexing, and multiple options permutation and combination
4. Market horizontal comparison
• Silicon Labs
Silicon Labs started in the field of Sub-1G, and got the Bluetooth product line through the acquisition of Bluegiga. Then Silicon Labs purchased Ember ZigBee product line and launched BLE + ZigBee SoC after integration. After that, they acquired the Redpine Wi-Fi product line.
TI acquires Chipcon and gets the Sub-1G, ZigBee, and BLE product lines. Its Wi-Fi SoC product line comes from the upgrade of Wi-Fi BT combo chip.
• Dialog
Dialog traditional BLE is concentrated in the wearable market. And Dialog acquired Silicon Motion ultra-low power Wi-Fi product line in 2019.
• Cypress
Cypress is a traditional MCU and BLE manufacturer. In 2016, it completed the Wi-Fi, BT, and BLE product lines through the acquisition of Broadcom IoT business unit.
Semiconductor companies in the IoT field are becoming more and more diversified in hardware, such as multi-protocol and low-power SoC. For engineering design, it is not enough. If one set of SDK can be suitable for all the company wireless product development, it will save a lot of time and cost in the IoT research and development. However, the integration of product lines and the integration of software platforms are more difficult and challenging for semiconductor manufacturers than acquisitions.
Written by RF-star senior advisor XCODER (a We-Media essayist).
