NORDIC VLSI ASA

Q2 - 2003 PRESENTATION

Svenn-Tore LarsenCEO

17. July, 2003

- 2 -Investor Presentation 17-07-2003

AGENDA

Financial Update

Sales Update

Product Division Status

- 3 -Investor Presentation 17-07-2003

MAIN SHAREHOLDERS

Odin-fondene 9%

Delphi-fondene (1) 8%

Nordea-fondene 8%

Inak AS 8%

Ferd Invest 7%

Firstnordic-fondene 5%

Nordea Securities (market making) 5%

Arne Græe 5%

Velox 4%

Employees 5%

Board members 9%

Stock options to employees 11%

(1): Still reporting Delphi and Storebrand separately

- 4 -Investor Presentation 17-07-2003

PROFIT AND LOSS ACCOUNT

MNOK

Sales Standard componentsSales System on Chip

• Projects • Components

Sales Data Converter IPOther operating revenue

Total operating revenue

Cost of goods soldDirect project costsPersonnel expensesDepreciationOther operating expenses

Operating profit/loss

Net financial items

Profit before taxes

Q2, 2003

5,0

7,83,73,7

0,0

20,2

5,92,1

10,81.27.7

-7,5

0,5

-7,0

Q2, 2002

4,0

15,6 3,81,30.0

24,7

4,56,4

12,00,89,1

-8,1

0,2

-7,9

2002

6.9

56.6 28.413.2

0.1

105.2

25.313.852.3

7,028.9

-22.1

6,7

-15.4

Change Q2-Q2

25%

-50%-3%

185%-

-18%

31%-67%-10%50%

-15%

7%

150%

11%

16.2

41.524.5

9.00.1

91,3

22.517.652,4

5,928.0

-35.1

2,1

-33,0

2001

- 5 -Investor Presentation 17-07-2003

BALANCE SHEET

Fixed and long term assets

Inventories

Accounts receivables

Other receivables

Cash and cash equivalents

Total assets

Equity

Long term liabilities

Current liabilities

Sum equity and liabilities

MNOK Q2, 2003

33,9

12,0

14,4

5,6

36,0

101,9

82,3

2,0

17,6

101,9

2002

32.8

11.6

13.2

4.8

53.6

116.0

91.6

2.0

22.4

116.0

2001

21.5

7.7

16.5

32.1

80.2

133.8

115.8

2.0

16.0

133.8

- 6 -Investor Presentation 17-07-2003

-20

-10

0

10

20

30

40

Q1-01 Q2-01 Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 Q2-03

QUARTERLY OPERATING INCOME AND EARNINGS

MNOK

Operating income

Earnings before taxes

- 7 -Investor Presentation 17-07-2003

AGENDA

Financial Update

Sales Update

Product Division Status

- 8 -Investor Presentation 17-07-2003

10.0 10.010.8 11.1 11.4 11.4 11.7 11.9 12.3

12.8 12.5 12.3 11.8 12.1 12.3 12.512.5

0

5

10

15

20

Jan

Feb Mar Apr

May Ju

nJu

lAug

Sep OktNov

DesJa

nFeb M

arApril

May

SEMICONDUCTOR MARKET SLOW GROWTH

Source: World Semiconductor Trade Statistics

Monthly WW Semiconductor Sales(BUSD)

- 9 -Investor Presentation 17-07-2003

0

10

20

30

40

50

60

Q1-01 Q2-01 Q3-01 Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 Q2-03

Revenue Booking Backlog

STRONG INCREASE IN BACKLOGQuarterly Operating Income, Booking And Backlog

MNOK

- 10 -Investor Presentation 17-07-2003

18 %24 %14 %

10 %

19 %29 %

27 %

20 %

68 %45 %

37 %

6 %0 %

20 %

40 %

60 %

80 %

100 %

120 %

2001 2002 2003-1H

SoC Projects

SoC Components

IP-Data Con

Standard Components

INCREASING SHARE OF STANDARD PRODUCTSRevenue Split 2001-2003

(1) SoC Projects excluding components sold

(1)

- 11 -Investor Presentation 17-07-2003

BACKLOG INCREASED SIGNIFICANTLY LAST QUARTERSummary of Financial Status

Backlog increase by 14% over Q1

• Backlog increase across business units

• Book/Bill: 1.31

Operating loss increase due to accelerated R&D effort

• Operating expenses reduced

Direct Development expenses increase due to aggressive product launches

• Product in backlog before release

Sales of standard component lower than expected

• Slow Chinese market in the beginning of the quarter - SARS?

• Lower than expected shipment to top customers compared to Q1

- 12 -Investor Presentation 17-07-2003

AGENDA

Financial Update

Sales Update

Product Division Status

- 13 -Investor Presentation 17-07-2003

STRONG BOOKING OF NEW STANDARD PRODUCTS Standard Components Status

Slower than expected sales of standard components

Backlog increase by ~ 50%

• nRF24XX family accounts for 25% of backlog

Shipped ~350 nRF2401 and nRF24E1 Evkits to targeted customer base

• Significantly more than with previous product launches

Full production of nRF2401, nRF24E1 and nRF24E2. nRF2402 Production in July

• Large volumes of Evaluation Kits shipped

• Initial prototype series shipments supported

New extensive product family for other market segments will be launched this fall

• Unprecedented feature set, performance, integration and solution cost

• Development work ended and wafer production started

• Working under NDA with 5 major customers for early design wins

- 14 -Investor Presentation 17-07-2003

nRF24XX PICKUP EXCEEDING EXPECTATIONS IN ALL MAJOR REGIONS

Shipments of Eval Kits

Successful distribution of nRF24XX Evalutions Kits in all Regions

Easy access to key target customers through established Nordic distributors..

..but also specially strong pickup in the US market (22 %) relative to the short presence (January)

Global acceptance of our new productsGlobal acceptance of our new products

Europe46%

Asia-Pacific30%

North America22%

- 15 -Investor Presentation 17-07-2003

SUCCESSFUL DESIGN WINS IN ALL TARGET SEGMENTFocus on Key Market Segments

Applications

Mouse/keyboard

Joystick/gamepad

Intelligent sports equipment

Headset

Audio

Industrial

Payback from solid market research and targeted sales strategy

Payback from solid market research and targeted sales strategy

Product Fit Customer Access Design Wins

- 16 -Investor Presentation 17-07-2003

CUSTOMERS ARE GETTING INTO THE MOOD FOR PRODUCTION

The nRF24XX devices are very easy for the customer to work with

• Customer RF experience is no longer needed

• Faster development cycles

Customers are replacing existing solutions with our new devices which ensures design wins in mature products

Product volumes are significantly higher in new design wins than with previous devices

The new product family has opened up new customer account including major global players

- 17 -Investor Presentation 17-07-2003

HIGHER ACTIVTY OF CUSTOMER PROJECTS SoC Project Status

Several new major projects initiated

• 3 large projects

Large increase in backlog

All resources utilized

Signed new large project with Nera Satcom (July)

- 18 -Investor Presentation 17-07-2003

SLOW QUARTER FOR SOC COMPONENTSSoC Components Status

Slow customer demand during quarter

Large shipments delayed to Q3 from Q2

Backlog shows higher revenues for Q3 and Q4

Existing portfolio of customers are indicating increased runrate

- 19 -Investor Presentation 17-07-2003

GOOD QUARTER FOR DATA CONVERTERS IP Data Converter Status

2 new contracts signed this quarter

Launched new 0.13µm products

Working with good opportunities for Q3 and Q4

- 20 -Investor Presentation 17-07-2003

SUMMARY

High activity on new products sales

• New nRF24XX family accounts for 25% of standard products backlog

New products completed and will launch this fall Will start development of next generation devices early august “MegaZig”

• Planned launch Q1- 2004

Backlog of SoC projects will cover most of Q3 and Q4

• Nera Satcom project high priority

Will increase shipments of SoC Components

Products portfolio for AD IP is very strong and attracting new leading customers

Continue to keep close attention to cost