Amazon plans to deploy its new XC1 chip in next-gen Echo smart speakers, boosting voice recognition speed by 25% and cutting component costs by 15%. The company’s FT2 SoC for Fire TV sticks integrates Wi-Fi 6 and VP9 decoding to reduce power draw by 30% and lower BOM by $4 per unit.
Amazon’s XC1 chip, designed in-house and manufactured by an external foundry partner, will power next-generation Echo smart speakers with 25% faster voice processing and 15% lower component costs. The custom neural processing unit enhances Alexa’s responsiveness, aiming to differentiate Amazon’s smart home lineup.
The FT2 system-on-chip integrates Wi-Fi 6 and VP9 decoding to lower Fire TV stick power consumption by 30% and reduce the bill of materials by $4 per unit. Amazon plans to ship devices featuring FT2 in time for the 2026 holiday season to boost user experience and margins.
By internalizing chipset design, Amazon reduces reliance on third-party vendors like Qualcomm and MediaTek, with analysts projecting a 2–3 percentage point boost in device segment gross margins over the next year. The strategy supports Amazon’s broader push to enhance hardware profitability in smart home and streaming markets.
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