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Ambarella Forges Ahead in SoC Market With New Camera Chip

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Ambarella, Inc. (AMBA - Free Report) recently launched the S6LM camera SoC (System-on-Chip) for professional and home security cameras. Based on 10nm process technology, SoC is ideal for small form factor and battery-powered designs.

The S6LM features Ambarella’s high dynamic range and low light processing technology, cyber security features and other capabilities, which enable very low power operation. It accommodates the company’s SmartHEVC (H.265) and SmartAVC (H.264) algorithms to deliver 4K videos with very low bitrates.

The SDK, ISP and cyber-security features present in the S6LM chip are also there in Ambarella’s existing Computer Vision (CV) SoC’s, namely, CV25, CV22, and CV2, allowing multiple price-performance options.

Fermi Wang, President and CEO of Ambarella, said, “Fully software compatible with our CVflow family of chips, the S6LM completes our product portfolio to address applications that require outstanding image quality, low-power operation, and cyber-security protection, while remaining cost-conscious.”

Ambarella’s Nichè Product: Camera SoCs

Ambarella has a broad portfolio of products that are tailored for meeting the specific needs of various end markets.

The company’s H2 SoC is one of the widely used technologies in the sports camera market, which has features such as flying camera flight control, video analytics and wireless networking. Its S-series solutions are used in majority of the digital IP cameras.

Also, the company provides SoC solutions for drone, automotive dashboard and wearable cameras. In 2018, the company started providing SoCs for virtual-reality cameras.

In further efforts to build relevant products for markets with impressive opportunities, Ambarella launched the CV22AQ automotive camera SoC for Advanced Driver Assistance Systems (ADAS), in December last year.

On the same day, it announced its partnership with intelligent visual perception software developer, HELLA Aglaia, to develop a platform based on the CV22AQ technology. This will add advanced artificial intelligence features in front ADAS cameras.

The company’s expertise in the development of camera SoC’s is so widely trusted that despite a decline in year-over-year revenues in the fourth quarter of fiscal 2019, Ambarella recorded a 10% increase in revenues from the security camera market. This was led by a rise in the use of professional security cameras.

The company expects a ramp up in CV revenues from the professional security camera market in the first half of the fiscal 2020, and return to revenue growth in the second half.

Zacks Rank & Key Picks

Ambarella currently carries a Zacks Rank #3 (Hold).

A few of better-ranked stocks in the same sector are CACI International, Inc. (CACI - Free Report) , Verint Systems Inc. (VRNT - Free Report) and Cadence Design Systems, Inc. (CDNS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for CACI International, Verint and Cadence is projected to be 10%, 11% and 12%, respectively.

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