Nordic's Uncertainty Remains High in 2025 Due to Low Visibility and Global Trade Tensions

Nordic Semiconductor designs Bluetooth Low Energy chips, the main source of its narrow-moat and with 40% market share. Nordic Semiconductor has made a handful of good decisions in the last decade. The first was to bet early in the BLE market around 2009, which is the standard for short-range communications in battery-powered devices thanks to good data throughput and easy installation. Second, Nordic switched from selling application-specific integrated circuit chips, or ASICs, where each chip is designed for a specific customer and application, to selling application-specific standard products, or ASSPs, which can be used by a wide range of customers and applications. These caused Nordic’s revenue to multiply by 4 times from 2015 until 2022. After the pandemic boom in consumer digital products, Nordic is going through a prolonged cyclical trough that has lasted more than two years. Nordic uses distributors as its main sales channel, whereas larger competitors like Qualcomm or Broadcom are less interested given distributors only represent 25% of global chip sales and serve many small and midsize customers.