Ambarella Speaks on Dahua, Hikvision, and Huawei (Q3 2020)

By Isabella Cheng, Published Dec 01, 2020, 10:48am EST

Now a few months out from Huawei HiSilicon's chip disruption, chip rival Ambarella addresses the current state of supply in its most recent investor call.

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In this report, we examine Ambarella's Q3 FY2021 (C2020) investor call, including comments on:

  • Huawei HiSilicon supply
  • Dahua and Hikvision
  • Video surveillance market share dominated by Dahua, Hikvision, and Huawei
  • New cameras using Ambarella SoC
  • Ambarella CV revenue performance
  • Q4 FY20201 outlook
  • Risks and opportunities for Ambarella

Executive *******

***********'* ** ****** (*****) investor ****, *** ******* **** Hikvision *** ***** *** continuing ** *** ***** large ******** *********** ** HiSilicon ***** *** ******* for * ******* ********** of *********'* ******* **** in ******** *****. *****, Ambarella **** **** **** won * ****** ** chip ******* ** ** from ********* **** ******* Controls, *********, ****, *** Honeywell, *** ******* *** business ** **** ** a ****** ** ********** automotive *************.

Key ****** ********* ******** ** **** *********** ********* *********, ******* ********* **** *** ************

*********'* ****** ******, ************* ********** ******** ** September ****** * ****** ** US ****** ********, **** not *******, ********* ** Ambarella. ********* ******** "*****'* still ****** ** ********* out *****", *** **** of *** ********* ***** stays **** "*** **** customers."

***** *****/********* ****** *** "a *** ** ********* of *********", ******* ********* customers *** ******* *** new *********, ***** ********* sees ** ** ***********:

*********, * *******, ** don't **** *** *****, but ** ** ******* Hikvision *** * *** of ********* ** ********* chips, ** **** *** continue ** ****. *** however, *** ***** ******* HiSilicon ********, * ***** they *** ******* *** newer *********. *** ****'* why ** *** ****** opportunities **** ** *** win. *** ** ********* that ** *** * handful ** ******* ************ security ****** ********* ** the **** ***** ******, including *****, *** **** we ******* **** *** going ** ********* **** up *** ********** **** us ** ** ****** to **** ****.

*******, ***** ******* ********* tend ** ** **** price-sensitive, ** **** *** instead *** *** *****-****** offerings **** ******** ***** and ****** **** ******, such ** *******, *******, or *********.

Dahua *** ********* ************ ** ********* ******* ******* ***

***** ***** *** ********* accounted *** ~**% ** Ambarella's ***** ******* * year ***, ******** ** **** * mid ******-***** ******************* ** ********* ** its** ********** *** *** ****** in **** ****** ******* Q3.

********* ******* ***** *** Hikvision ** ******** "******* through" ***** ******** ********* inventory:

** *** ***** ******** calls ** ********* *** professional ******** ****** ********* in *****, *** ******-** roughly $** ******* ** [chips] **** **** ** FY20. ** **** ******** their ***** ********* ********* reduction, ** ****** ***** orders **** ****** ****, offset ** **** ****** by * **** ** computer ****** *** ******. During **, ***** *** customers ******** ******** ** the ***-****** ***** ******* of *** ***** *******, which **** ****** ** the ****** *** *** foreseeable ******.

Dahua ****** ********* ****** *****, ******** ** **

***** *********'* ******* ****** from ***** *** ********* have *** * ****** this ****, ********* ****** that ** *** ******** orders **** ***** *** shipment ********* ** ** for ****** ****. ********* believes * ****** ****** of *****'* ******** "**** help ** ** *** revenue **** [***] *** some ******** ** *** market ****," *** ***** that "** *****'* **** many ****** ***" ** it ** ****** **** "they ******** ** **** through *** [*********] *********."

***** ********* **** *** have *** "****** ****" with ********* *********, ** is ******* *** ************* to **** ******** **** Hikvision ** *** ******:

** *****'* ********* *** design **** **** ********* yet... ** *** ******, we're ***** ** ******** to **** **** ********* to *** ***** **'** have *********** ** **** with ******** ****** ************.

** ***** ** *********, our ******* ******* ******** does *** ******* *** CV ******* ****** **** this *******. ********* ** can ******** **** ** use *** ** ********** in *** ******.

******** ***** **** ********* about *********'* ******* ** provide **** ** ***** and ********* ** * US-based *******, ********* **** in ***** ********** ** *** ********** the ******* ** ***** able ** "**** **** foreign-produced *** ******** ** the ****** ******** ** compliance **** ********** ***."

Ambarella **** *********, *****, ****** **** ******** ** ******** ****** *****

*********'* ***,***** ****, **** ** ********** believes "*********, *****, ****************, [*****] *** ****** the ***** ******* ******** camera ********; ***** ***** will ******** ** **** majority ** *** ****** share." *** ******* ********* to ** **** **** meant *******, *** ******.

**** ****** *** ** response ** ** ******* question ***** *** **** 2 ****** ************* ***** gain **** ****** ***** if ********* ***** ***** a ******* *** ***** China *************. ***** **** 2 ************* *** ********* gain ****** *****, **** sees ** ********* *** them ** ***** * level **** ***** ********* Hikvision, *****, *** ******:

***** ***** **** ******** to **** ******** ** the ****** *****. **** because ** ***** ****, and *** ********, *** their ******* ********* **** already ****. * ***** it's -- *** *** others **** **** * chance ** ******** ***** market ***** *** *** will *** *** ** the ***** ** **** they *** ********* *** market ***** ** *********, Dahua, ********[*******].

***** ******* ** *** 'smallest' ** *** *****, at ~$*** ******* ****** revenue, **** *** ***** 5 ***** ** **** as ***** ** ***** China ***** ************ ************* such ** ******, ********, Tiandy, ***, ******, ***

New ****** ************ **** *********

********* ********* * ****** of *** ******* ******** in ** **** *** Ambarella ****, ********* ******* from ******* ********, *********, FLIR, *********, ** **** as **** ******* *** home ******** *******:

********* **** ********* *** body ******* ************************ ************* *** ****. ******, Ambarella "******* ** *** CV ****** ******** ** the **** ******** ****** market **** *** **** year," ** *********** ** Comcast's *** ** ********* S3LM *** ** *** new******* ** **** ******** camera.

Ambarella ******** ** ******* **** **** ** **% ** ***** ******* ****** **** ****

** ******* ** ***** ~10% ** ***** ******* this ****, *** ********* "*********** ** ******* **** represent ***** **% ** total ******* ** ****** year ****." ***** ********* still ******* ************ ******** cameras ** **** ** the **** ** *** CV ******* **** ****, it *** ******* *** its ****** ** *** home ******** ****** *** automotive ******* ** *** revenue *************.

********* ********* *** *****-**** total ********** ******* ******, totaling $*** ******* **** the **** * *****, at *** ** ******** call. *** **** "*********** programs" **** ******** ********** in **** ** ****. Ambarella's ********** ******** ******* providing **** *** ******** driver ********** ******* (****) and "***** ********** ********* for ********** ******** ** well ** **** ******* and **** *******," ********* active ****** ********** *** video *********.

Ambarella's ******* ********* ** *******

*********'* ** ******* *** $56.1 *******, ***** ******** the **** *** ** Ambarella's ******** ********. ******* grew **% **** ** to **, *** *** still **** **% ******** to ** **** ****. Automotive ******* *** "*****" increased ************ ***** ******** decreased. *******, ********* ********* that *** ** ***********, "the ******** **** ** the ******** ** ****** down **** *******."

Q4 ****** ******* ****** ** ********** *** ******** *******

********* ******* ** ******* to ** ** *** range **$** ******* ** $** million, ****** ** ********** and ******** ******* ******. Automative ******* **** ** up **% **** ****-**-**** and ************, ********* ***********, as "********** ******* ** benefiting **** ** ***** CV **** *** * post ******** *******." ******** revenue ** ******** ** grow *** ****** ****** sequentially.

Supply ***** ***** *** ***** *********** ****** *** *********

*********, ** **** **** companies, *** **** **** supply ***** ****** ** the ************* ******** ** foundries **** ******* ***** to **** ******** *** manufacturing ***** ******* ** increased ************* ****** ********* from ********* ****** *** technology ******** ****** *** pandemic *** *** ** products. ** *** ** guidance, ********* *********:

** *** ************* ******** supply ***** ********, *** operations ***** ****** ******** in ***** ******* ** manage ************* ****-***** *** on-time **********.

Shortages / ****** *** ********?

** **** ***** **** level ** ******* ***** video ************ ******* ********* resulting **** ******* **** supply ********* *** **** of * ***** ********. We **** *** *** seen ****** ******** ** widespread ****** *** ******** to ******* ****.

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