user31234: I am using an ESP8266 in a project which will be on for at least 18 hours a day. I'm using an Arduino 3.3V power supply to feed the ESP8266. 
The issue I'm facing is a reset issue. It sometimes disconnects from the hotspot automatically.  I have heard this could be because the ESP8266 draws more power than the Arduino's regulator is able to supply.
I want to know what will be the proper circuit to power the ESP8266. 
I know I have to use an AMS1117 regulator, but I also know I have to use capacitors too. How would I configure the AMS1117 with capacitors to properly power an ESP8266?

user4143: You don't "need" an AMS1117 regulator. You need a power source that can supply enough current.  One example is an AMS1117-33, although it's not a great one as far as efficiency goes (though it is simple).
The basic circuit is to have a 10µF capacitor on both the input and output of the regulator - that should be enough for most uses.

simulate this circuit – Schematic created using CircuitLab
Powered from more than around 5V the AMS1117-33 would need some heatsinking.  You can also add some smaller (100nF) capacitors in parallel with the 10µF ones if you want to improve high frequency response.
You can pick modules up with this circuit on from eBay for a dollar.
A better power source would be a "buck" switching regulator. These are far more efficient and generate much less heat.  It's harder to search for these on eBay since all the AMS1117-33 modules seem to be labelled erroneously as "buck" regulators (which they so are not!), so be careful when looking around. A true "buck" regulator will have an inductor on it. Here's one example.

31234: <p>I am using an ESP8266 in a project which will be on for at least 18 hours a day. I'm using an Arduino 3.3V power supply to feed the ESP8266. </p>

<p>The issue I'm facing is a reset issue. It sometimes disconnects from the hotspot automatically.  I have heard this could be because the ESP8266 draws more power than the Arduino's regulator is able to supply.</p>

<p>I want to know what will be the proper circuit to power the ESP8266. </p>

<p>I know I have to use an AMS1117 regulator, but I also know I have to use capacitors too. How would I configure the AMS1117 with capacitors to properly power an ESP8266?</p>
 4143: <p>You don't "need" an AMS1117 regulator. You <em>need a power source that can supply enough current.</em>  One <em>example</em> is an AMS1117-33, although it's not a great one as far as efficiency goes (though it is simple).</p>

<p>The basic circuit is to have a 10µF capacitor on both the input and output of the regulator - that should be enough for most uses.</p>



<p><img src="https://i.stack.imgur.com/CCvhu.png" alt="schematic"></p>



<p><sup><a href="/plugins/schematics?image=http%3a%2f%2fi.stack.imgur.com%2fCCvhu.png">simulate this circuit</a> &ndash; Schematic created using <a href="https://www.circuitlab.com/" rel="nofollow">CircuitLab</a></sup></p>

<p>Powered from more than around 5V the AMS1117-33 would need some heatsinking.  You can also add some smaller (100nF) capacitors in parallel with the 10µF ones if you want to improve high frequency response.</p>

<p><a href="http://www.ebay.co.uk/sch/i.html?_nkw=3.3v+dc-dc+1117" rel="nofollow noreferrer">You can pick modules up with this circuit on from eBay for a dollar.</a></p>

<p>A better power source would be a "buck" switching regulator. These are far more efficient and generate much less heat.  It's harder to search for these on eBay since all the AMS1117-33 modules seem to be labelled erroneously as "buck" regulators (which they so are not!), so be careful when looking around. A true "buck" regulator will have an inductor on it. <a href="http://www.ebay.com/itm/152551807267" rel="nofollow noreferrer">Here's one example</a>.</p>
