Why does the BL5340 require use of nRF Connect SDK and not the previous nRF5 SDK?

Nordic Semiconductor needed to adopt a native RTOS for their latest generation of devices such as the nRF53 used in the BL5340. nRFConnect is Nordics first fully RTIOS based SDK and will be their active SDK going forward. Their previous SDK called nRF5 SDK will receive maintenance updates only going forward.

For more information see

nRF Connect SDK and nRF5 SDK statement - Blogs - Nordic Blog - Nordic DevZone (nordicsemi.com)