Nordic semiconductor - remaining a market leader by overcoming macroeconomic and industry specific risks

Abstract

The semiconductor industry has been a dynamic and growing market in an increasingly digital economy where the Internet of Things is indispensable to most individuals. With the pandemic, semiconductors established themselves as a critical industry, with many smaller companies, as the one at the core of this paper, growing exponentially. Such thriving of the industry led a shortage of the raw materials underlying each semiconductor chip, creating an imbalance between supply and demand, thus hindering the industry’s growth. This research paper focuses on the Equity Research of Nordic Semiconductor, a Norwegian fabless semiconductor company specializing in wireless communication technologies powering the Internet of Things and a global market leader of short-range wireless solutions employing the Bluetooth technology. Throughout this paper, one finds a company overview, an explanation of the forecasts performed to value the company, a target price for Nordic Semiconductor’s stock as of the year-end of 2023 through the discounted cash flow, multiples, and precedent transactions valuation methods, as well as the analysts’ final remarks and recommendations to investors considering the expected outlook for the company.