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Cypress To Discontinue Participation In Reverse Auctions | Cypress Semiconductor

Cypress To Discontinue Participation In Reverse Auctions

Last Updated: May 03, 2007

Cypress To Discontinue Participation In Reverse Auctions

Procurement Practice Does Not Allow Cypress to Realize Full Value for Its Solutions; Undercuts Development of Long-Term, Strategic Relationships With Customers

SAN JOSE, Calif., May 3, 2007 - Cypress Semiconductor Corp. (NYSE: CY) today announced that it will no longer participate in reverse auctions - the procurement process whereby suppliers bid against one another in real-time over the Internet for procurement contracts. The process is called a "reverse" auction because prices fall over time instead of rising as they do in traditional auctions. Cypress also does not use the practice in awarding contracts for its own vendors. 

The reverse-auction process has numerous drawbacks. It does not allow bidders to realize the full value of their solutions, instead focusing solely on the lowest price as a differentiator. It also devalues collaboration between suppliers and customers that is critical to introducing innovative new products.

"A driving force behind Cypress's new mission to become the leading supplier of programmable solutions is the ability to obtain more value from our intellectual property," said Christopher Seams, executive vice president of Worldwide Sales and Marketing for Cypress.  "In addition, we pride ourselves on the ability to work with the world's leading OEMs to develop long-term, strategic relationships that benefit both parties. The reverse auction process is not conducive to either of these important outcomes. It is not good for Cypress, our customers, or our shareholders."

About Cypress
Cypress delivers high-performance, mixed-signal, programmable solutions that provide customers with rapid time-to-market and exceptional system value. Cypress offerings include the PSoC® Programmable System-on-Chip™, USB controllers, general-purpose programmable clocks and memories. Cypress also offers wired and wireless connectivity solutions ranging from its WirelessUSB™ radio system-on-chip, to West Bridge™ and EZ-USB® FX2LP controllers that enhance connectivity and performance in multimedia handsets. Cypress serves numerous markets including consumer, computation, data communications, automotive, industrial, and solar power. Cypress trades on the NYSE under the ticker symbol CY. Visit Cypress online at

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