Ambarella CEO Sees Edge AI Growth Across Security, Autos and Wearables

Key Points

• Ambarella sees expanding edge AI demand across security, automotive, consumer video, wearables and infrastructure, driven by customers needing more processing power for transformer and large language models on devices.
• The company’s key differentiator is power efficiency, combining AI inference, video processing and CPU functions in its SoCs. Its portfolio spans roughly 1 to 1,000 TOPS and is supported by a unified software development kit.
• Automotive represents about 30% of revenue and security remains the largest market, while wearables and robotics offer faster but earlier-stage growth. Ambarella is targeting 10%–15% fiscal 2027 revenue growth, though memory availability and pricing remain risks.

Ambarella NASDAQ: AMBA Chief Executive Officer Fermi Wang said the fabless semiconductor company is positioning its system-on-chip portfolio for broader adoption of edge artificial intelligence, with opportunities spanning enterprise security, consumer video, wearables, automotive and edge infrastructure.

Speaking at Citi's TMT Conference, Wang said Ambarella, founded in 2004, initially focused on digital-video applications before spending the past decade developing edge AI processing products. Its SoCs combine AI inference engines with image-processing pipelines, CPUs and peripheral functions, allowing the company to address complete edge-device systems rather than only a single processing function.

Wang said customer engagement has reinforced Ambarella's view that demand for AI performance at the edge is increasing. Customers have progressed from convolutional neural networks to transformer-based models and large language models, he said, and are seeking more processing capability in devices. However, he said the edge AI market does not yet have a single dominant application comparable with the major workloads that drive data-center spending.

Product differentiation and competition

Wang identified power efficiency as Ambarella's primary competitive advantage, describing performance per watt across AI inference, video processing and other functions as central to the company's design-win efforts. He said customers may initially use GPUs because they are broadly available and easy to program, but power consumption becomes a constraint for battery-powered products and systems with limited heat dissipation.

He also pointed to Ambarella's digital-video processing heritage and its Cooper software development kit. The unified SDK supports the company's 15 AI SoCs, Wang said, enabling customers to move applications between different silicon products with limited software modification.

Among competitors, Wang said NVIDIA offers high performance but GPUs can be less suitable for customers requiring energy-efficient solutions. He characterized Qualcomm as Ambarella's largest competitor because of greater overlap in their offerings, while describing Synaptics' edge AI coverage as concentrated more in the roughly 1 TOPS to 10 TOPS range. Ambarella offers products ranging from 1 TOP to 1,000 TOPS, he said.

Security, video and wearable opportunities

Enterprise security remains Ambarella's largest addressed application, according to Wang. He said the role of security cameras is expanding beyond surveillance as retailers and other organizations connect cameras to edge systems that can use large language models to analyze store traffic, customer behavior, purchasing activity and operational conditions.

In consumer video, Wang cited demand for premium video-capture devices, including 360-degree cameras, sports cameras, stabilized handheld products and drone cameras. He estimated that market at roughly 10 million to 20 million units annually and said average selling prices are relatively high because the products require both advanced video processing and AI capability.

Wearables represented about 10% of revenue, based on figures cited by the conference moderator. Wang said wearable cameras have historically been used by law enforcement but are seeing broader interest from retail and service businesses. He said battery life and power consumption are key constraints in that market, which he described as growing faster than more mature enterprise-security applications but from a smaller base.

Wang also described robotics as a high-growth but early-stage market with a small current revenue base. He said Ambarella has a couple of humanoid-related design wins, though he does not expect that business to materially change the company's financial performance in the near term. Wang said humanoid robotics is technologically difficult and likely will require multiple generations of products before broad availability.

Automotive, partnerships and supply-chain considerations

Automotive accounts for about 30% of Ambarella's revenue, Wang said, including commercial-vehicle telematics, electronic mirrors, ADAS digital video recorders and other applications. He said the company recorded record automotive revenue in its second quarter and has announced partnerships involving Aurora, Continental and Bosch. Ambarella continues to seek larger design wins with automotive original equipment manufacturers, particularly for Level 2-plus and Level 3 vehicles.

Wang said a consumer vehicle design win could represent several hundred million dollars of revenue. He said the company's near-term automotive growth is entirely from Western markets, while Chinese OEMs tend to favor domestic suppliers. Ambarella nevertheless remains active in China to monitor AI innovation and support Chinese customers with export-oriented businesses.

Wang discussed Ambarella's long-term agreement with Hanwha Vision, saying Hanwha initiated the arrangement as it sought a unified AI hardware and silicon platform across its group. He said Ambarella's power efficiency, vision processing, AI inference capability and access to advanced process nodes made it one of a limited number of potential partners. Wang expects other large edge AI customers could pursue similar semi-custom chip arrangements.

On manufacturing, Wang said Ambarella works exclusively with Samsung Foundry and expects its first 4-nanometer chip to enter production. He said the company believes its supplier relationships could help it obtain capacity as foundry, packaging and testing supply chains become tighter.

Looking ahead, Wang said Ambarella's fiscal 2027 revenue-growth guidance of 10% to 15% could benefit from broader edge AI adoption. The main uncertainty, he said, is memory availability and pricing, as customers have indicated they lack firm allocation commitments for future periods. Wang said AI-driven increases in processing requirements should lift SoC average selling prices, while gross margin is expected to remain relatively stable.

About Ambarella (NASDAQ:AMBA)

Ambarella, Inc is a fabless semiconductor company that develops low-power system-on-chip (SoC) solutions for video processing and artificial intelligence at the edge. Its technology is designed to help devices capture, process, analyze and transmit high-quality video while reducing the need to send data to cloud-based systems.

The company's product portfolio includes its CVflow family of AI vision processors, video processors and related software. These solutions support computer vision and machine learning applications in security cameras, automotive systems, advanced driver-assistance systems, robotics, industrial equipment and consumer devices.

Founded in 2004 and headquartered in Santa Clara, California, Ambarella serves customers and markets globally through its semiconductor products and technology partnerships.

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