Ambarella Stock

Ambarella, Inc. (Ambarella) operates as a developer of low-power system-on-a-chip, or SoC, semiconductors and software for edge artificial intelligence, or AI, applications.

The company’s technologies make electronic systems smarter, enabling features, such as person detection, object classification, and analytics, in addition to performing complex data analysis in real time, delivering high quality imagery, and preserving vital system resources, such as power and network bandwidth. The company specializes in the development of deployable, scalable designs for intelligent electronic systems that utilize high-bandwidth sensors offering a proven path to mass production.

The company primarily serves human-viewing applications with video and image processors for enterprise, public infrastructure and home applications, such as internet protocol, or IP, security cameras, sports cameras, wearables, aerial drones, and aftermarket automotive video recorders. The company is now leveraging its human-viewing heritage to pursue the machine sensing market. The company’s recent development efforts have focused on creating advanced AI technology that enables edge devices to visually perceive the environment and make decisions based on the data collected from cameras and other types of sensors, such as 4D radar. This category of AI technology is known as computer vision, or CV, and the company’s CV SoCs integrate the company’s state-of-the-art video processor technology together with the company’s recently developed deep learning neural network processing technology, which the company refers to as CVflow. The CVflow-architecture supports a variety of computer vision algorithms, including object detection, classification and tracking, semantic and instance segmentation, image processing, stereo object detection, terrain mapping, and face recognition. In addition, CVflow can process other sensor modalities, including lidar, radar, time of flight, thermal and near infrared (NIR); and allows customers to differentiate their products by porting their own or third party neural networks and/or classical computer vision algorithms to the company’s CVflow-based SoCs. The company’s CV technology is creating opportunities for the company to address a broader range of markets and applications while also allowing the company to capture more content per electronic system.

The company’s new CV3 AI central domain controller family of SoCs is specifically architected for automated driving applications. In addition to offering the company’s existing advanced camera perception processing, CV3 adds sensor fusion and planning layers that enable a broader set of fully-automated devices.

In November 2021, the company acquired Oculii Corp., a developer of high definition radar technology. Oculii’s adaptive AI software algorithms are designed to enable radar perception using current production radar chips to achieve significantly higher resolution, longer range and greater accuracy. Oculii’s software can be deployed on the company’s existing CVflow SoCs, operating in conjunction with leading radar RF solutions to significantly increase safety and reliability. The company recently introduced a centralized radar architecture that synergistically leverages Oculii’s adaptive AI software algorithms together with the company’s CV3 domain controller family, resulting in improved perception, lower power consumption and reduced bills-of-material for mobility applications compared to the current generation of radar systems utilized in the market today.

Ambarella’s products are now used in a wide variety of human viewing and computer vision applications, including a variety of automotive camera systems, video security cameras, mobile and fixed robots, industrial applications, and consumer devices, such as action, drone and 360° cameras.

Target Markets

The company’s CV SoCs are optimized for the requirements of the end-point market to provide highly accurate results, significant processing power, small form factor and minimal latency while consuming very low amounts of power and simultaneously delivering both human viewing and computer vision functionality, often while supporting multiple cameras and multiple AI applications with a single SoC incorporated in an end-point device.

The company’s first CV SoC was introduced in 2018 and CV3 is the company’s third generation computer vision chip in the company’s SoC family. The company’s development efforts are now focused on SoCs that provide both human viewing and computer vision functionality. With the acquisition of Oculii, the company also now complements its advanced camera perception capabilities with advanced radar perception to enable higher levels of autonomy.

The company is focusing on the automotive and Internet-of-Things (IoT) end markets:

Automotive Applications: Cameras and other sensors, as well as high performance computing processors, are utilized for a variety of applications in the automotive market and the company’s products are designed into both original equipment manufacturer (OEM) and aftermarket applications. The company addresses the following automotive market applications:

Automotive Video Recorders (also known as Data Loggers): These video cameras are pre-installed in vehicles or mounted (aftermarket) to record events for reconciliation, such as for insurance and liability, driver scoring or training, and security purposes. The company offers solutions for both OEM and aftermarket drive recording devices, some of which include advanced driver assistance systems (ADAS) features.

Electronic Mirrors: One or more cameras, in conjunction with an electronic display, are used to augment, or in some cases replace, reflective glass rear view and/or side view mirrors to provide a wider and unobstructed field of view. Smart electronic mirrors that incorporate the company’s CV SoCs may also help with detecting objects in blind spots, overtaking vehicles and alerting for vulnerable road users, such as pedestrians and bicycles.

Front Advanced Driver Assistance System (ADAS) Cameras: These front-facing cameras are often positioned behind the rearview mirror, enabling functions, such as automatic emergency braking, lane departure warning, forward collision warning, intelligent headlight control, and speed assistance functions, many of which are required by an increasing number of regional New Car Assessment Programs, or NCAP. The most advanced front ADAS cameras generally require ultra high-definition (UHD) resolution and advanced CV processing, which can be critical for long-distance object detection with a wide field-of-view, and extremely low power due to their inherently small form factor.

Cabin Monitoring System (CMS) and Driver Monitoring System (DMS) Cameras: These interior mounted cameras track drivers and passengers to help prevent accidents by alerting a drowsy or distracted driver and assisting with the deployment of safety features, such as airbags. These interior cameras may also be utilized by service providers, in particular with autonomous vehicles, to create new business opportunities in which in-cabin information, collected through cameras, may be monetized. The company’s solutions process its customers’ interior-sensing algorithms at high speeds and with low power consumption, and are effective even at night via onboard RGB-infrared processing. The company’s DMS solutions can be integrated with supplementary camera applications, including electronic mirror, front ADAS, and high-resolution driver recording.

Central Domain Controllers for L2+ to L4 Autonomous Vehicles: The company continues to advance its research in critical areas of autonomous vehicle development, such as vehicle detection, obstacle detection, pedestrian detection, lane detection, traffic sign recognition, stereovision processing, and sensor fusion and planning, enabling the company to design strong platforms for applications ranging from Level2+ autopilot to full autonomy. The CV3 family enables centralized, single-chip processing for multi-sensor perception, including high-resolution vision, radar, ultrasonic and lidar, as well as deep fusion for multiple sensor modalities and autonomous vehicle path planning. The central domain controller in autonomous vehicles is connected to the camera, radar and other sensor suites. Using neural network and traditional computer vision processing, the domain controller fuses the sensor data and perceives the vehicle’s surroundings. Based on this multi-sensor surround perception, the domain controller estimates a safe driving path for the vehicle. In addition, the domain controller can simultaneously process in-cabin sensing applications, including driver and occupant monitoring.

Security Cameras: The company is a leader in enterprise and home security camera markets, with solutions that deliver exceptional computer vision performance, industry-leading compression efficiency, low power consumption, and outstanding image quality, including high dynamic range (HDR), low-light processing and fisheye lens dewarping. The company’s CV products enable higher levels of automation than the company’s vision processors through advanced algorithms, such as object detection, classification and tracking, license plate recognition and facial recognition. The company addresses the following security camera applications:

Enterprise and Public Class Security: These cameras are used for video monitoring and security surveillance in enterprise and public infrastructure applications. The company’s solutions enable the streaming of multiple video streams to enable remote monitoring at multiple locations. Embedded computer vision technology supports advanced analytics at the system’s edge, including people counting and tracking, facial recognition and retail behavior analysis.

Home Security: Home security cameras are designed for home or small business use and may be connected to cloud services and applications via home networks using WiFi. These cameras may require very low bitrate operation to support high-definition (HD) resolution over limited bandwidth connections, while their small form factors or battery powered design may require very low power operation. Form factors include smart video door-bells and video-enabled lights. Embedded computer vision technology supports advanced functions, including intruder and pet detection, face recognition and package monitoring.

Emerging Robotic and Industrial Applications: The company’s solutions can add intelligence to a range of partially or fully robotic applications, including access control, industrial/factory automation, sensing cameras, and a variety of industrial and home robotic applications. The company’s advanced CV SoCs handle an array of complex algorithms, from low-level perception functions and neural networks to higher-level autonomous software stacks, while the company’s video processing pipeline enables operation in challenging lighting conditions, such as high-contrast scenes and extremely low-light environments, all with low power consumption. The company addresses the following industrial and robotic market applications:

Identification/Authentication Cameras: The company’s video-based sensing solutions enable contactless access control for home, enterprise and public applications. The company’s CV SoCs are engineered to quickly extract input from the physical environment, fuse data from multiple sensors, analyze the incoming data and deliver the appropriate feedback, with low-latency and low-power responsiveness. Applications include enterprise access control panels, electronic locks and contactless mobile payment terminals.

Robotic Products: The company’s products and technology are well suited for a variety of smart home and enterprise robotic applications. With stereovision capabilities and convolutional neural network (CNN)-based object classification, the company’s solutions are also suited for a variety of industrial machine vision systems, mobile robots for the delivery or factory/warehouse applications, aerial drones, robotic vacuum cleaners, and other emerging robotic applications.

Sensing Cameras: The company’s CV SoCs enable sensing cameras that analyze video using AI-based algorithms running in the camera to provide remote users with updates, warnings or business data based on the analysis. Since no video, audio or image data needs to leave the camera, privacy can be prioritized. Applications for sensing cameras include elderly monitoring, building occupancy monitoring and retail store business analytics.

Other IoT Applications: Cameras for the home, public spaces and consumer leisure applications that provide HD video quality increasingly include embedded connectivity to share and display video. The company’s low power, high-resolution and connected solutions can be found in a variety of cameras, including wearable body cameras, sports action cameras, social media cameras, drones for capturing aerial video or photographs, video conferencing and virtual reality applications.

Products

The company has a wide range of products in its portfolio, including products that have commercially shipped, products for which the company has shipped engineering samples and products that are under development. The company typically introduces two to three new silicon products per year which, when combined with the company’s flexible software development kits, allow the company to offer product families addressing the specific needs of a wide range of end markets. In addition to enabling small device size and low power consumption, the company’s SoC solutions make possible differentiated functionalities, such as computer vision functionality, simultaneous video and image capture, multiple-stream video capture, image stabilization and wireless connectivity.

Central Domain Controller: The company’s new CV3-AD685, the first production version of the CV3 family of automotive AI domain controllers, targets L2+ to L4 autonomous vehicles. Its next-generation CVflow AI engine includes neural network processing that is 20x faster than the previous generation of CV2 SoCs, along with additional general vector processing capabilities to provide the overall performance required for full autonomous driving (AD) stack processing, including computer vision, HD radar, deep fusion and planning. It also integrates advanced image processing, a dense stereo and optical flow engine, Arm Cortex A78AE and R52 CPUs, an automotive GPU for visualizations, and a hardware security module (HSM). The CV3-AD685 is an ‘algorithm first’ architecture that provides support for the entire AD software stack.

CVflow SoCs: The company’s AI architecture, incorporated into its CV family of SoCs, extracts and processes data from video streams, enabling the company’s customers to develop intelligent camera systems. These SoCs combine advanced image processing, high-resolution video encoding and CVflow AI processing in a single, low-power design to enable a new class of smart edge devices for applications, including smart home security, retail monitoring, consumer robotics, and occupancy monitoring. Some of the company’s CVflow SoCs are manufactured to satisfy the functional safety requirements of the automotive market.

Vision Processor SoCs: The company’s video and image processing SoCs, based on its proprietary architecture, integrate an advanced image sensor pipeline (ISP), H.264 and/or H.265 encoders, and a powerful ARM CPU for advanced analytics, flight control, WiFi streaming, and other user applications. The company’s unique architecture and advanced process node technology lower power consumption while maintaining high performance for security camera and consumer applications, such as connected drones, sports cameras, and 360º (VR) cameras.

High Definition Radar: Through the company’s acquisition of Oculii, the company offers adaptive AI software algorithms designed to enable radar perception using current production radar chips to achieve significantly higher resolution, longer range and greater accuracy. These improvements eliminate the need for specialized high-resolution radar chips, which have significantly higher power consumption and cost than conventional radar solutions. Oculii’s software can be deployed on Ambarella’s existing CVflow SoCs, operating in conjunction with leading radar RF solutions to increase safety and reliability. In addition, the company recently introduced a centralized radar architecture that leverages Oculii’s adaptive AI software algorithms together with the company’s CV3 processor family to enable both central processing of raw radar data and deep, low-level fusion with other sensor inputs, including cameras, lidar and ultrasonics.

Serializer/Deserializers: The company’s B6 and B8 SerDes (Serializer/Deserializer) products are mixed-signal (analog and digital) semiconductors used to transport data short distances (up to 10 meters) from a CMOS image sensor, often in a remote camera location, to the company’s video and CV SoCs. The SerDes chips are used to add additional camera(s) to an automotive application, as well as used as a bridge chip for other automotive applications, such as a MIPI combiner, splitter or display driver. The company’s SerDes chips are also used in security applications, such as ATMs that can use a single B8 chip for connecting multiple remote cameras to a single video processor SoC.

Software Modules. In the future, the company may separately license proprietary software modules that can be used in conjunction with a customer’s internally developed software and/or with third-party software. Features that may be licensed include functionality for a variety of automotive applications, including dataloggers, ADAS and autonomous driving systems, eMirrors and in-cabin applications. Additionally, the company’s neural-network image signal processing (NN-ISP) software module improves low light imaging in security camera applications.

Customers

The company sells its solutions to leading original design manufacturers, or ODMs, and original equipment manufacturers, or OEMs, globally. In the automotive OEM market, the company may sell its solutions to Tier-1 suppliers that develop and sell devices incorporating the company’s solutions to automotive OEMs. The company refers to ODMs and Tier-1 suppliers as the company’s customers and OEMs as the company’s end customers, except as otherwise indicated or as the context otherwise requires.

The company works with its end customer OEMs and ODMs throughout their product design cycles that often last nine to eighteen months for many of the company’s target markets, although new products may have longer design cycles, particularly those implementing advanced AI features. The product life cycles in many of the company’s target markets typically range from twelve to 24 months.

In fiscal year 2023, the customers representing 10% or more of revenue were Wintech Microelectronics Co., Ltd., or WT, the company’s Asia-based distributor; and Chicony Electronics Co., Ltd., or Chicony, a direct ODM customer that manufactures products for multiple end-customers, which accounted for approximately 57% and 12% of total revenue, respectively.

Sales and Marketing

The company sells its solutions worldwide using its direct sales force and the company’s distributors. The company has direct sales personnel covering the United States, Asia and Europe. The company operates sales offices in Santa Clara, California and Hong Kong, and business development offices in China, Germany, Japan, South Korea, and Taiwan. In addition, in each of these locations the company employs a staff of field applications engineers to provide direct engineering support locally to the company’s customers.

Manufacturing

Wafer Fabrication

The substantial majority of the company’s SoCs are supplied by Samsung in facilities located in Austin, Texas and South Korea, from whom the company has the option to purchase both fully-assembled and tested products, as well as tested die in wafer form for assembly. The company also has small volumes of some products supplied by GlobalFoundries Inc.

Assembly and Testing

Samsung subcontracts the assembly and initial testing of the assembled chips it supplies to the company to Signetics Corporation and STATS ChipPAC Ltd. In the case of purchases of tested die from Samsung, the company contract the assembly to Advanced Semiconductor Engineering, Inc., or ASE. The company contracts the assembly of products supplied by Global Foundries Inc. to ASE. Final testing of the company’s products is handled primarily by Sigurd Corporation or King Yuan Electronics Co., Ltd. under the supervision of the company’s engineers.

Competition

In the IoT market, the company’s primary competitors include AMLogic Inc., Fuzhou Rockchip Electronics Co., Ltd., HiSilicon Technologies Co., Ltd., or HiSilicon, which is owned by Huawei Technologies Co., Ingenic Semiconductor Co., Ltd., Novatek Microelectronics Corp., or Novatek, NVIDIA Corporation, or NVIDIA, OmniVision Technologies, Inc., Qualcomm Incorporated, or Qualcomm, Sigmastar Technology Ltd., and Socionext Inc.

In the automotive camera market, the company competes against Allwinner Technology Co., Ltd., Horizon Robotics Inc., iCatch Technology, Inc., Mobileye, a subsidiary of Intel Corporation, Novatek, NVIDIA, NXP Semiconductors N.V., Qualcomm, Renesas Electronics Corporation, and Texas Instruments.

Intellectual Property

As of January 31, 2023, the company had 300 issued patents in the United States, 109 of which were continuation or divisional patents, 10 issued patents in Europe, 7 issued patents in China, 7 issued patents in Japan and 86 pending patent applications in the United States. The issued patents in the United States expire beginning in 2024 through 2042.

Seasonality

The company’s business has tended to be seasonal with higher revenue in the company’s second and third fiscal quarters (year ended January 2023) as the company’s customers typically increase their production to meet holiday shopping season or year-end demand for their products.

Governmental Regulation

The company’s business and operations around the world are subject to government regulation at the national, state or local level addressing, among other matters, applicable environmental laws, health and safety laws and regulations, laws relating to export controls and economic sanctions, and the rules of industrial standards bodies, such as the International Standards Organization and governmental agencies, such as the Federal Trade Commission.

Certain of the company’s products are subject to the Export Administration Regulations (EAR), which are administered by the United States Department of Commerce’s Bureau of Industry and Security (BIS).

Research and Development

The company’s research and development expenses were $204.9 million in the year ended January 31, 2023 (fiscal year 2023).

History

Ambarella, Inc. was founded in 2004. The company was incorporated in the Cayman Islands in 2004.