Ceva Reports Breakthrough Year for "Physical AI" Licensing
AI intellectual property licensor Ceva announced a breakthrough year for its "physical AI" business, which involves embedding intelligence directly into silicon. The company signed 10 new licensing agreements for its NeuPro NPU and reported that AI now accounts for over 20% of its annual revenue. The growth reflects an accelerating trend of adopting smart edge devices in the automotive, industrial, and consumer sectors.
- Ceva's "Physical AI" concept refers to systems where AI processes data from sensors to interact with the physical world in real-time, combining connectivity, sensing, and on-device inference. This approach is critical for applications where latency, power efficiency, and privacy are key constraints. - The NeuPro-M NPU architecture is highly scalable, ranging from 2 to 256 TOPs (Tera Operations Per Second) per core, and is designed to handle complex workloads like Vision Transformers (ViT) and generative AI. Its architecture includes multiple MAC (multiply-accumulate) units, a programmable vector unit, and the ability to handle unstructured sparsity, which can make some AI models run up to four times faster. - A key licensing win in 2025 was a strategic agreement with a major global PC manufacturer that will use the NeuPro NPU in its next-generation on-device AI architecture. Another significant deal involved Microchip Technology, which licensed the entire NeuPro NPU portfolio to integrate AI capabilities across its product families. - Ceva estimates that the NPU licensing agreements signed in 2025 hold a potential lifetime royalty value of approximately $125 million. However, the company projects that these royalties will not begin to materially contribute to revenue until around 2027. - The company's strategy involves bundling its AI IP with its extensive portfolio of wireless connectivity IP, including Wi-Fi, Bluetooth, and Ultra-Wideband (UWB). This allows customers to source foundational IP for connecting, sensing, and inferring from a single vendor. - For the full fiscal year of 2025, Ceva reported record device shipments, with customers shipping 2.1 billion Ceva-powered units. The company has forecasted total revenue growth of 8% to 12% for 2026. - The broader edge AI hardware market is projected to grow from approximately $25 billion in 2025 to over $118 billion by 2033. Ceva's focus on IP licensing positions it as a foundational technology provider for this expanding market, competing with other IP and hardware giants like NVIDIA, Intel, and Qualcomm. - One of the licensees for the NeuPro-M NPU is Nextchip, which is using the technology for its next-generation Advanced Driver-Assistance Systems (ADAS) solutions. The NPU's ability to efficiently process multiple video streams and support Vision Transformers is particularly beneficial for complex automotive scenes, like detecting a pedestrian partially obscured by another object.
