Christoffer Wang Bjørnsen: All right. I think we're all good. Thank you, everyone, for joining this call with Nordic Semi, and thanks to management for taking the time and being available. I think there's a lot to talk about, both on the near-term picture and the long-term stuff. Maybe, Vegard, if you want to start, just give a brief intro to what's new, and then we can rapidly jump into Q&A and take it from there, I guess.
Vegard Wollan: Yeah, absolutely. Thanks, Christoffer. Thanks, everyone, for joining the call. Financially, we achieved record quarter for Q3, came in at $235 million, up 32% from the same quarter last year and 8% sequentially. Overall, I think we are summing it up as a market which is strong and demand is healthy, which we are pleased about. At the same time, what matters the most to us is truly to be delivering on the plan for profitable growth. The key thing in our plan is also then to do what we have said we're going to do, renewing our portfolio, expanding our portfolio. I think the team is doing an excellent job on that such that we are seeing that we have very competitive products at the moment. I believe we are taking market share in all markets we are participating.
Vegard Wollan: We are expanding our addressable markets systemically in all segments, which we appreciate. Finally, we are increasing the value we deliver in each end node we are participating in, both by leveling up the SoCs by our software solutions, Edge AI solutions, and compute solutions, memory sizes increasing, and also, of course, cross-selling with PMIC multi-connectivity products, as well as our cloud lifecycle services. I think all in all, we are on track to reach our long-term ambitions, which is important to us. Yeah, I think that we'll hand it over for questions.
Pål Elstad: You hear this, Christoffer?
Christoffer Wang Bjørnsen: Sorry, I will just kick it off quickly with a quick housekeeping question, and then can people just raise their hands and we are not too many people, so we will probably get through it all. I think getting a lot of questions today on your comments with regards to this increase in provisions for ship and debit and the sequential increase in all the current liabilities. Then people are trying to square how much of that balance sheet movement was ship and debit, and was the ship and debit basically, how much of that is driven by price increases versus you guys pushing volume into the channel? You catch where I am asking?
Vegard Wollan: Yeah. I will just comment on that before Pål will answer it in more detail. On the outbound pricing, we are not commenting specifically on what we do, what we have done, what we are doing, and what we will do. Clearly, I think as a generic comment to that, we do see some inbound cost increases. We have seen some, we are seeing some, and we will see some in the coming time. We have obviously also some dynamics in our pricing schemes for various products, various customers, various segments, various markets, which we have managed in a 2026 and are continuing to manage throughout 2026 and into 2027.
Vegard Wollan: I think the key thing for us is that we feel we are in a good shape in managing our overall balance in that space, keeping our growth plan at the same time as keeping our gross margins at healthy levels.
Pål Elstad: It relates to this distribution. We have commented for the last quarters that inventories have been on the low lean side, on the low side. Given the fact that we are ramping a lot of products, it was actually too low. So during the quarter, we have slightly increased inventory. So we would say they are now balanced. So at the right levels, and it is mainly sending some more of the new products where we are releasing both the cellular products but also the nRF54, et cetera. At the same time, we have done some price adjustments, and when you do a price adjustment, you also increase the price book.
Pål Elstad: It does not really mean that the customers will pay a lot more, but what this does is pay is at a higher level. So the price book for this goes up. At the same time, you will see that in the accounts receivable that went up. So these two items net each other. The result, we haven't taken it as revenue. We've deferred revenue because the prices have gone up for the distributors.
Christoffer Wang Bjørnsen: Yeah.
Pål Elstad: Then if the customers pay more or less, it really depends on the success of the distributors to sell at a higher price.
Christoffer Wang Bjørnsen: Yeah. Then finally on the pricing dynamics, you talked about again, the input cost going on, and I think it's widely expected that there will be foundry price hikes from the beginning of next year. When you talk about these price changes now, would that be matched without saying what the number is, will that be matched both in terms of driving net revenue and gross margin in Q1 timeframe, or will there be a Q4 where you've seen prices up, and if this is pushed out through to customers, you'll get some temporary margin benefits in Q4? Just how does that work without putting a number on it, I guess?
Vegard Wollan: Yeah, no, there are dynamics to how that's implemented on the headphones side or from Nordic, Christoffer, as you can imagine, because we have so many customers, so many different product segments where some of it may land on a gravitation on certain dates. There are always individual cases around this, as you can imagine.
Christoffer Wang Bjørnsen: Yeah.
Vegard Wollan: We, as an example, negotiate a situation where a customer increases volumes substantially on us and get a longer runway before they see the price increases, which is the balance we manage and have discussions on.
Christoffer Wang Bjørnsen: Yep. Clear. Again, if you have that question, just click the right-hand function. Yeah, I think, Mit, I think you were half a second ahead of Bolu, so just unmute and go.
[Analyst 1]: Okay. Thank you. Thank you for doing the call. Vegard, clearly the short-range business has been doing extremely well. This quarter, we are now sort of at the revenue run rate, which I think you had predicted for 2028, based on the 17% growth CAGR through then. I guess if you look back, if you can help us understand sort of the forces that have brought us here now versus in 2028, how much of this is restocking or price, how much of this is market growth, how much of this is share gains for you, that would be super helpful.
Vegard Wollan: Yeah. That is a great question, Mit, and it is a very complex answer to that, as I think you can appreciate. I think it is a mix of all of that. I think, first of all, the market is strong and has been strong for us, probably stronger than we expected if you go a couple of years back in time, which is a positive on the healthy market side. I think clearly, on the other hand, also the nRF54 Series, it is extremely competitive from products, and we now have the rest of that portfolio, which we have been looking forward to having, where we have the tools in our toolbox to win, both in the low end and in the higher end. On the potential restocking of certain customers or particularly then probably the smaller customer is our anticipation.
Vegard Wollan: We have to assume that there is an element of that obviously ongoing as there is such a tight situation on supply and semiconductor at the moment, and smaller customer with less buying leverage are potentially concerned. Having said that, I think it's also important to balance it a bit with other constraints and potential headwinds in that picture that we also have.
Vegard Wollan: If you look, I think we talked about it this morning, that we are now seeing more than 50 different product variants, which is now ramping in production on the nRF54 Series. A lot of that is going extremely well. On the other hand, this is also demand which we planned six to nine months ago, that manufacturing. On some of the different variants, we are also short in our delivery. We could have shipped more in Q3, and that is slipping over to Q4. Again, some of that will slip over from Q4 to Q1 next year. There is also a picture where we, to some small degree, are already seeing delinquencies. I'm not saying that that's problematic for us, and we are not losing these customers, but it is challenging for us.
Vegard Wollan: That is part of the other part of that picture. Finally, we also see some selected cases where we are not able to ship to customers because they are short of a different component in their systems, whether it's an antenna or a battery or a PCB, which is delayed. That is happening out there at the moment, and we have to believe that there is an element of pull-ins. While we don't think it's large, we think it's also a breadth of a much higher number of customers we are currently seeing, and we are obviously measuring that. We are not quantifying these various elements, Mit. That's as well as I think I can answer it in a limited timeframe.
[Analyst 1]: That is very helpful. Thank you.
Vegard Wollan: Sure.
Christoffer Wang Bjørnsen: Olu, do you want to go?
[Analyst 2]: Yeah. Thank you. I just had a question about the share gain comment that you made. Could you maybe talk about which of the product is really driving the share gains, and is it more on the nRF54 Series, kind of where the design wins are starting to ramp more strongly, or is it more on nRF53 and 52? You report designs every quarter, but I am just curious, what are you seeing an acceleration in share gains, and what specifically is driving customers to choose you maybe over Silicon Labs or some other peers?
Vegard Wollan: Yeah, Olu, I think overall, the 22 nanometer tech nodes, which we use as our baseline platforms here, are extremely modern and powerful in its combination of the performance and functionality they bring at the sizes of the products in size constraint type applications, as well as power consumption and cost. These are all in all the combinations that makes us confident in all the markets where we participate. I think it is also clear that in maybe 2023, 2024, where the nRF52 series had been running for about seven, eight years, in some certain areas, it was a bit running out of steam.
Vegard Wollan: While we still have repeat wins on the nRF54 still happening on a good and solid basis, so it is kind of a fantastic testimony to that product line at that point in time, how well it is performing at the moment. It is in certain areas running out of steam. Now, of course, with the nRF54 Series, I think we are similarly ahead of the curve vis-à-vis all of our competition. That is where we are seeing that effectiveness, I would say, pretty much in all the segments we participate at the moment. Whether it is being vis-à-vis Silicon Labs or Ambiq or others.
Vegard Wollan: In low range, I think the numbers by themselves talks about we are taking market share. Phoenix, we are coming from zero, obviously taking market share. So that is why I am using that expression, Olu, on our sense of taking market share wherever we participate at the moment.
[Analyst 2]: Yeah. Maybe just a quick follow-up to clarify that point. So if we look back over the last five years plus with the nRF54 Series platform on 22 nanometer, this is maybe the time that there is a clear platform tech gap versus the competition. Is that sort of the way to think about it, where you sort of, you had nRF53 and 52 being out for several years, and now you have just head-to-head clear PPA performance efficiency advantages on this new platform for the first time in a few years. Is that fair way to explain it?
Vegard Wollan: That is fair way of explaining it, and I think it is still relatively mildly contributing to our numbers. It is starting to contribute. And it does take quite a lot of time, long time on the design-in side with our customers, which I think in quite a few cases is underestimated. So that is why, if you look at the certifications and the revenue contribution on 64, still, I think we have that transitioning ahead of us.
[Analyst 2]: Got it. Thank you.
Vegard Wollan: Sure.
Christoffer Wang Bjørnsen: Mit again.
[Analyst 1]: Thank you. I think I have two questions, both on Edge AI. First, I guess I was a little bit surprised not to see a mention of what I think is a design win for you on the Amazon V. If I am not mistaken, you have the nRF54 designed into that product. I was just curious for, in general, how you believe you are positioned for that class of Edge AI products, and then I had a separate question.
Vegard Wollan: Mit, I think we do not generally comment specifically on specific customers and products. That is probably why you did not hear us say that. I think that segment is a segment I am very confident in the way we compete at the moment, and there are lots of very nice designs happening. Edge AI, likewise, I think with our Axon NPUs, for quite a lot of the use cases in that segment that have been. It is a matter there to fit the right compute points, the right memory points, and the right cost and size points. Because obviously you can overdo all of them, and you can underdo all of them, because these are variables where you need to fit the application. I think we have done a good job there in the first generation of our Edge AI.
Vegard Wollan: If we are not the absolute leader there, we are definitely very much up there. It is competing well for us. For the lighter Edge AI usage, we also have the Neuton software modeling tools, which is increasing very solidly in uptick for us on the usage base. Very pleased about that, and yes. I think that was the question, Mit, wasn't it?
[Analyst 1]: Yeah, it was. The second question I had is, one of Google's partners has announced an NPU with sort of HBM class external DRAM, whereas my understanding is, your NPU currently only uses embedded memory. The question is, should Nordic be expanding into that class of processors?
Vegard Wollan: Yeah, great question. I think we have. Well, you have seen now a fairly solid, wide breadth and rollout of products in the nRF54 Series. We did this recent launch today, or in this quarter, previous quarter on the nRF54LC10A, which is a fairly low-end type device, but we also have high-end devices in the family now. We can obviously not talk about what we haven't launched, but I think we are also looking and working quite a lot upwards, because that's definitely a very interesting market for us.
Christoffer Wang Bjørnsen: Ryan.
[Analyst 3]: Hey, guys. Congrats on the record results. It's great to see. I'd be curious on the long-range products, what color can you share as far as, are these standalone wins? Are these adjacent with your short-range products? Just trying to understand what's really driving the success there.
Vegard Wollan: Yeah. It's a multitude of everything there also, Ryan. Thank you. I think what has happened now, without, again, commenting on specific customers or specific designs, is that we also see that some consumer applications are starting to utilize our technology as the size and cost is becoming competitive. We have the leadership, I think we have enabled on the satellite technology there, which is making it extremely attractive and applicable for certain applications there. That's something we are looking forward to in the coming time. Other than that, it is varying a lot, and we also have these designs and multiple of those in the long range scheme where we have three or four chips on the board, so they kind of use the full breadth and everything we have in our portfolio. Also standalone designs.
Vegard Wollan: It is a variation, and pleased about the progress there, and at least as far as we model it now, we are quite confident that we will build this step by step in the coming time.
[Analyst 3]: Okay. Thank you. I will be respectful, but you said consumer. Can you give any color? You said it is more consumer related or anything you can share?
Vegard Wollan: Yeah. Previously, or up until relatively recently, I would say, all our customers have been categorized more on the industrial side, on the long range side, but we also now see both consumer and healthcare design wins in long range, which is a very good and interesting traction.
[Analyst 3]: Excellent. Thank you so much. Congrats again.
Vegard Wollan: Thank you. Thank you, Ryan.
Christoffer Wang Bjørnsen: Thanks. Samir?
[Analyst 4]: Hello. Hi. A few questions. One is, if I think about the durability of new certifications you have on the nRF52 series that is still continuing at a, what I would argue, is a higher rate than I expected. Do you sense that the customers that are designing on the nRF52 series today are evaluating the nRF54 Series, and they are just saying, "This is what we need," or they have historically been on the 52, so let us stick with it and wait for new model? What is your sense of kind of the rationale of the nRF52 series customers sticking with the 52 versus moving over to 54?
Vegard Wollan: Yeah. It is an interesting question. We do have quite a few customers using both and kind of sticking to the 52, also in cases where they are deriving from a previous design, using a previous certification or even, as we say, recertifying with the 52. But if you have the software base, it delivers what you need. We do not necessarily incentivize customers the hard way to move across. The key thing for us is for them to be happy and pleased and stay with Nordic. While in other cases where we are truly contributing to making our customers' competitive edge different and visible, they are, of course, in a much more aggressive way, positive, aggressive way, incentivized to move to the 54, where really the power consumption difference matters, the higher performance and the compute memory sizes and all of that.
Vegard Wollan: I think, we also see the stickiness of 52 being maybe a bit surprisingly strong and positive because we still have a very strong nRF54 Series pipeline ahead of us, and that is something we are looking forward to.
[Analyst 4]: I guess then separately, a lot is talked about at an industry level about AI helping design time cycles, AI coding, et cetera. Are you actually seeing development timeline cycles shorten, whether it is related to you or whether it is related to other things there? Are you actually seeing that happen and the pace of development and launch quickening, or is that still a theoretical exercise right now?
Vegard Wollan: I think it still remains to be seen, but I think because it is relatively recent. We launched this, I think, as an industry for us, when we launched this system in May. The uptake and usage of our AI-assisted development platform and flow has just been tremendous since that. We just launched our second generation, and I am happy that we have actually been able to have those 5 months of learning before others are releasing their solutions, because I think that is very valuable time in this transformational time. I do think we will see the benefits of this in the coming years. But whether it is truly today translating into these 20 months coming down to 15 and 10, I do not think we can say we see that truly today.
Vegard Wollan: But I am quite optimistic that we will see it, because in our benchmarking and when we develop and continue to invest in this now, we can see quite large effectivity improvements in quite a few areas here, and even allowing agents to participate here. That is a very interesting area, and we are trying to double down and just invest more in it. So this is something we have to expect is becoming more of a table stake. I think at the moment, we have been early here, and it is interesting times.
[Analyst 4]: Maybe one last quick one, if I can. If I just think about supply and availability and ability to supply your customers over the next, let us say, year or so, do you think the bigger risk for you is Nordic's ability to supply customers, or inability to supply customers for antennas, or your ability to supply customers, but the customers cannot get some other part that does not end up shipping a product? Do you think it is kind of your parts or things related to your parts or the customer that you have no control over that is the bigger potential issue for you?
Vegard Wollan: Yeah. It is an interesting question, Samir. I think clearly, as you have seen, we have strategically been sourcing wafers, planning for more variants and volume growth ahead of us. That is something we, I think on the wafer side, we have been seeing the effects of. I think for 2027, unless the demand grows a lot higher than what we currently plan for 2027, we should be okay for 2027 manufacturing, as far as we see it. We are still working 2028, 2029 capacity, because we are expecting to have quite a bit more for those years. We have very close and good, strong, positive discussions with our foundry partners in that regard. I am optimistic that we resolve that too, but it is kind of a, you resolve one year at a time type discussion we have now.
Vegard Wollan: So maybe if I had to choose among the two, we may be a bit more concerned about others not supplying, but I think that is just because we have been planning strategically ahead here.
[Analyst 4]: That is helpful. Thank you.
Vegard Wollan: Yeah.
Christoffer Wang Bjørnsen: Great. Thank you. I just wanted to, just while we wait for more questions, just double-check that we understood your, or at least I understood your commentary here correctly. So on the kind of some customers probably pulling in, especially the small ones, but then you are also kind of seeing delinquencies and other customers struggling because they are not getting the other golden screw or whatever. You are kind of saying that your current sense is either kind of canceling each other out a bit, and hence you are kind of not worried that we are in an inflated period.
Christoffer Wang Bjørnsen: Did I get you right there? Without quantifying how big each one is, just like your sense based on your kind of modeling or understanding of the customers is that it is fairly balanced, that some are pulling in, but others are not able to ship. It's kind of a fair assessment of your commentary or?
Vegard Wollan: Yeah. The hard part there, Christoffer, I think while these customers typically if you're a small manufacturer and you typically buffer, let's say you had a buffer for your manufacturing of five weeks, and you take that to seven or eight weeks just because the times are what they are. The challenge we have also on that side is that these customers don't mark their orders with for the two, three weeks additional buffer. So it's hard for us to really have a cap on the size of the impact there. Our sense is that small, it is small because we also have so many discussions right now where it is tight and borderline with our customer base in their manufacturing. We are more focused on keeping that part going, supply to those that really need it.
Vegard Wollan: Absolutely most concerned and most focused on those SKUs where we are slightly short at the moment, of course.
Christoffer Wang Bjørnsen: Yeah.
Vegard Wollan: Whether they balance each other out or not, it's difficult to comment on.
Christoffer Wang Bjørnsen: Yeah. It is just you have gotten the opportunity now on the earnings call today to kind of be a bit more, give a bit of a warning that it could be a problem into next year and so on. The fact that you are not doing that is kind of an indication to me that you are not worried that we are in kind of an inflated period. At some point, we will kind of just lose some of that inflation, in the quarters ahead.
Vegard Wollan: Yeah. No, I think we try to be as transparent as we can on this area, and we do see some of all of it. It is important to have that said.
Christoffer Wang Bjørnsen: Yeah.
Vegard Wollan: How that develops, I guess, only time will show.
Christoffer Wang Bjørnsen: Yeah. Then just another question on the, you commented made now and earlier about some SKUs being tighter than others. Could you maybe help us a bit in understanding what, maybe not the part number, but what categories or nodes are tight and hence why? Is it kind of looking at the channel and where prices are and stuff, it seems like PMIC is probably on the tight side and some of the new products, while it is kind of looser, in lack of a better term, on all the 52 parts. How should we think about that, where the tightness is?
Vegard Wollan: Yeah.
Christoffer Wang Bjørnsen: For your ability to ship, I guess.
Vegard Wollan: Yeah. I think on the PMIC side, which is growing very nicely for us, and the attachment rate is coming up. It is also so that the power management circuitry is using manufacturing technology, which is similar to the power managed circuitry, which is being utilized in data center and other applications.
Christoffer Wang Bjørnsen: Yeah.
Vegard Wollan: That is why tightness there is particularly constrained manufacturing-wise at the moment. Fortunately, we have been, I would say, fairly upfront planning on this as well, such that we did start to enable additional foundry manufacturers more than a year ago and have that capacity starting to come online right now. It is something we are working, in addition to our main foundry partners. But on the other hand, also the demand on the PMIC side is growing slightly higher than we anticipated a year ago. That is why that is a tight area we are working a lot on.
Christoffer Wang Bjørnsen: Yeah.
Vegard Wollan: I think we could say that if there are other areas, and there are some selected other areas, it is on the new products.
Christoffer Wang Bjørnsen: Yep.
Vegard Wollan: Because the planning there is more challenging, obviously. There are a lot more in the manufacturing of that needs to come together to make everything run seamlessly. I think the team is doing a good job there. I do not want to state that and say that again. Nordic is generally regarded as a high-performance supplier on the supply security side. But it is also a massive operation to manage, straight up.
Christoffer Wang Bjørnsen: Yeah. That is clear. Is it fair to assume that, I do not know about you guys, if you were disappointed or not, but in the long-term kind of thesis we have on the dollar content story, it was a bit on the disappointing side when it comes to this other category where you have PMIC. Is it fair to assume that the sequential drop there was your ability to supply and sell dynamic? Or is there more like there was a particularly big move in Q2 on the PMIC side? There was a dev kit. So just like that sequential drop in other was a setback, I guess, for the dollar content story with PMIC. You kind of order and some now, just like the last 12 months is around $12 million. I think you have said PMIC alone is probably crossing $50 million by 2028.
Christoffer Wang Bjørnsen: Just at least start with the sequential drop would be helpful for me, at least.
Pål Elstad: The points of drop is maybe just rounding. It is not big. I agree, PMIC is slower than the numbers you indicated, and I think Vegard has mentioned that is where we potentially have tight supplies. The design activity is very good. So it is still a good ambitions for the PMIC business.
Christoffer Wang Bjørnsen: All right. Then again, just raise your hands if you have any more questions. On the long range of cellular satellite side, I think it was already mentioned a bit here, but you have publicly stated that you expect multiple, call them key or lead or tier 1 customers to launch products in the market based on that product, the long-range products in H2. Thus far, we have only seen one in Garmin, which has been widely covered publicly now. Does that mean that you still expect at least one more tier 1 player to launch product? Or was more the comment you made that you expect a customer to launch multiple products, which we have seen with Garmin, just to clarify that. This is an important nuance, I guess.
Vegard Wollan: That is a very specific question about a customer, Christoffer. I do not recall exactly the wording of what I said either. So I am going to be cautious about that. The only thing I can say is that Garmin is a great customer, and it is great to see that they are launching these products utilizing long range and satellite technology.
Pål Elstad: It is great that you are commenting on it, too.
Vegard Wollan: And I guess that is more than one design also now in the public, isn't it, Christoffer? I am asking back.
Christoffer Wang Bjørnsen: In Garmin?
Vegard Wollan: Yeah. Is it one?
Christoffer Wang Bjørnsen: There is two?
Vegard Wollan: All right. Okay. That's good.
Christoffer Wang Bjørnsen: I am asking, I can bring up the transcript, but it is like you said, multiple customers.
Vegard Wollan: Okay
Christoffer Wang Bjørnsen: At the interview you did on TV. I think, did you mean multiple customers or did you mean multiple products?
Vegard Wollan: It depends on the timeline. If you say H2, it is at least quite a few designs.
Christoffer Wang Bjørnsen: Yeah. Okay. I will note cagey. Management was a bit cagey. I will note that in my note. Okay, that is great. Thank you. On the more longer term for cellular, then we can do the other products as well and just try to get through this by the end of the time allotted here. How do you think about cellular longer term with you have heavy investments there, in the product roadmap now with eRedCap at some point in time, and what kind of products that you are not doing today are you thinking to expand into, with all these investments and expanding the portfolio to support more advanced stuff like eRedCap and so on? Do you ultimately think about getting into more complex devices that require low latency and higher bandwidth or those kind of things?
Christoffer Wang Bjørnsen: Are you still sticking to simpler stuff with higher latency and lower throughput, and just the big investments so people, at least they are asking me, what is the strategic focus of the company? Do they think that they will be in all these AI-focused devices? I am not asking about Muse Charm or anything else, but just further out in time, what do you think the role of the company is, and with your investments and what are you positioning yourself for?
Vegard Wollan: No, that is a good question, Christoffer. I think, obviously the long-range journey for Nordic Semi since 2014 up until today has been a challenging journey. I think the good thing as I see it right now is that we are turning this into a growth story, and we are on track to make our current plans happening. So executing to that plan to take this to profitability according to our 2028 plan. That has to be the basis for what we do. So you need to learn to walk before you start to run. I think in that picture, you see us now launching the nRF93 Series to expand our addressable market on towards higher data-intensive applications and throughput.
Vegard Wollan: Of course, the next step, which is important for us, and we have communicated that we are in development for that, is to develop eRedCap 5G technology for the timeline to be in a couple of years' time. I am not 100% sure if we have communicated the timeline there, but something like that, around a couple of years timeline. That is very important for us, and we are investing in that. When we are investing in that, we are, of course, investing in that together with input from key customers and potential key users. That is the longer-term growth journey, if you think about five, six, seven years for us.
Christoffer Wang Bjørnsen: Yeah.
Vegard Wollan: The way to get there, we are going to launch the nRF92 Series next year, which is a substantial uplift from the nRF91 series. All of this journey up in throughput and data rates, which is important that we take, we are doing it that, I would say, the Nordic way, coming to it from the low power connectivity side.
Christoffer Wang Bjørnsen: Yeah.
Vegard Wollan: Which is important for us to do to have an edge in this and to be competing in that space.
Christoffer Wang Bjørnsen: Yeah. Then to leave room for Samir's question, just I hope a simple yes or no question, basically. I am not pushing you, but is it fair to assume that improving the latency orders of magnitude and data rate orders of magnitude, it is not because you envision that the electricity meter in my home needs that. It is because you are hoping to get into a different set of applications that you are currently addressing. Is that a fair assessment or?
Vegard Wollan: Yes.
Christoffer Wang Bjørnsen: Great. Samir?
[Analyst 4]: I will be quick. It is mentioned a bunch about the EU Cyber Resilience Act and the potential enforcement of that. Are you seeing actual behavior changes in your customers in taking that seriously? Is that being factored in their new products and solutions, or is there business as usual, see if it actually gets enforced, we will worry about that a year or two from now? How much is that actually in the customer conversation or assessment?
Vegard Wollan: Oh, it is increasing a lot. That is really becoming a lot of the exchanges with our customers at the moment. We are driving that quite actively. We are our sales distribution at the moment, and you will see even more come from us in that area in the coming time. We want to make EU CRA easy for our customers or those who work with Nordic, such that you get everything easy as you usually do with working with Nordic. That is how we play CRA. Absolutely a big part of conversations at the moment.
[Analyst 4]: Awesome. Thank you.
Christoffer Wang Bjørnsen: Finally, within the 45th minute here, I totally forgot to ask you about Edge AI. On the earnings call, you said you kind of called out that you now think everything will be Edge AI. Can you expand on that and give some examples of what makes you confident to call out Edge AI everywhere and what that means for you guys?
Vegard Wollan: Yeah. I am back to that point. If you think about a smart ring as an example, you could, of course, have all ranges of compute power and memories inside that. You have to have the right amount to spend what your battery can allow. That is really where I think Edge AI and the tech we are providing is fitting very well for that, let us say, this generation, and then I am talking today and in the coming couple of years, generation of products being launched here. Because we are seeing a lot of designs in the pipeline where our Edge AI tech is optimizing the functionalities, optimizing the power consumption for our customers compared to writing linear software or traditional algorithms. So it is very encouraging.
Vegard Wollan: I think we have been hitting the right levels with our first generation, and we now need to take these two technologies also for the generations to launch from 2029 and 2030 onwards to the right levels.
Christoffer Wang Bjørnsen: Yeah. That is great. It is a shame we only had the 45 minutes, but I understood you guys have a next thing to get to, so I will just thank everyone for joining, and thanks for the good questions. Thanks for the good responses and for the time, guys. Yeah, we will see you soon.
Vegard Wollan: Thanks. Take care, everyone.
Pål Elstad: Thank you, everyone.
Vegard Wollan: Take care.
Christoffer Wang Bjørnsen: Bye.
