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Cypress Reports Fourth-Quarter and Year-End 2010 Results | Cypress Semiconductor

Cypress Reports Fourth-Quarter and Year-End 2010 Results

Last Updated: January 27, 2011



  • TrueTouch™ and PSoC® revenue exceeded expectations and set new records

  • Handset revenue increased 27% sequentially

  • Fiscal 2010 revenue increased 32% year-over-year

  • Cash flow from operations in 2010 totaled $270 million, up 202% from 2009

  • Q1 revenue expected to outperform normal negative seasonality


SAN JOSE, Calif., January 27, 2011 — Cypress Semiconductor Corp. (NASDAQ: CY) today announced that non-GAAP1 revenue for the 2010 fourth quarter was $226.6 million, down 2.3% from $231.9 million for the prior quarter, and up 16.8% from $194.0 million for the year-ago period. GAAP revenue for the 2010 fourth quarter—which included a reduction of $6.3 million due to the accounting treatment for settling a long-standing civil antitrust lawsuit on SRAMs—was $220.3 million.  


Cypress recorded GAAP net income of $9.1 million in the 2010 fourth quarter, or diluted earnings per share of $0.05. This compares with last quarter’s diluted earnings per share of $0.18 and a diluted earnings per share in the year-ago fourth quarter of $0.02.


Non-GAAP1 net income for the 2010 fourth quarter—excluding stock-based compensation, acquisition-related charges, the SRAM legal settlement, restructuring and other special charges and credits—totaled $50.6 million, or diluted earnings per share of $0.25. That compares with non-GAAP1 diluted earnings per share of $0.28 for the prior quarter and diluted net earnings per share of $0.16 for the year-ago fourth quarter.


For the fiscal year 2010, Cypress posted total non-GAAP1 revenue of $883.8 million, an increase of 32.3% from fiscal year 2009 revenue of $667.8 million. On a GAAP basis, Cypress posted total revenue of $877.5 million, an increase of 31.4% from fiscal 2009 revenue of $667.8 million.


On a non-GAAP1 basis, Cypress’s fiscal year 2010 diluted earnings per share was $0.94, compared with diluted earnings per share of $0.10 in 2009.  On a GAAP basis, Cypress’s fiscal year 2010 diluted net earnings per share was $0.40, compared with a diluted net loss per share of $1.03 in 2009.


Cypress President and CEO T.J. Rodgers said, “Cypress’s fourth-quarter revenue decreased 2% sequentially, beating seasonally down trends. The strength came from our CCD division which grew 10% sequentially due to very strong TrueTouch touchscreen revenues, which drove our overall mobile handset revenues up 27%. Gross margins and cash flow remained strong during the quarter and we continued to keep our expenses under tight control.


“It was a very good year for Cypress and its shareholders,” Rodgers said. “Our 2010 revenue grew 32% year-over-year, rebounding strongly from a tough 2009. Diluted earnings per share increased by more than a factor of nine, and our stock price appreciation of 76% exceeded all major indexes by a wide margin. Our flagship PSoC and TrueTouch products achieved record revenue and design wins. Our SRAM revenue, which grew 43% for the year, continues to generate strong profits and cash flow.


“Bookings for our PSoC-powered touchscreen controllers and optical finger navigation businesses extend into Q2,” Rodgers said. “Our Q4 book-to-bill was 1.35, due to strong new design wins and bookings for our touchscreen products. We also expect Q1 revenue to exceed normal negative seasonal trends.”




            Non-GAAP1 consolidated gross margin for the fourth quarter was 59.1%, down 1.1 percentage points from the previous quarter, as expected, due to product mix.


Fourth-quarter net inventory increased $12.9 million quarter-on-quarter, as we increased our die bank profiles to support significant new designs and higher than previously expected revenues. Net inventory increased 11.6% on a year-over-year basis.


            Cash and investments totaled $458.0 million, or $2.69 per basic share and did not include $43.9 million invested in our yield enhancement program which was invested over the end of the quarter and matured in mid-January, returning $47.0 million in cash.


            The company repurchased 1.9 million shares at an average cost of $17.40 per share during Q4. The amount remaining at the end of Q4 on the stock repurchase program is $567 million.


Additional fourth-quarter and annual data and comparisons relevant to Cypress’s business units are presented below:





Our TrueTouch touchscreen solutions—which allow the ability to read 10 touches at once—continued to register robust design wins and set new design win records during the quarter: Samsung Electronics selected TrueTouch to drive its new Wave 2 and Galaxy 5 smartphones. Acer used TrueTouch its dual-screen ICONIA notebook computer, the industry’s first 10-finger touchscreen based on a multichip solution for screens up to 14 inches. Tokyo-based KDDI designed TrueTouch into the popular, new IS03 Android smartphone manufactured by Sharp Communication Systems Group. HTC selected TrueTouch for its HTC 7 Surround and HTC 7 Mozart mobile smartphones, which are based on the Windows® Phone 7 Series recently introduced by Microsoft.

Cypress announced that it will more than triple its manufacturing capacity in 2011 to meet the rapidly expanding demand for its TrueTouch™ touchscreen controllers and next-generation PSoC products. The expansion, which will be complete in the third quarter, is already underway. TrueTouch offers the industry’s fastest, most accurate touchscreen user experience.

Cypress announced production availability of a new, high-performance single-chip TrueTouch solution for large multitouch touchscreens up to 11.6 inches. The solution opens up increased market opportunities for Cypress in the fast-growing tablet PC market and other large touchscreen markets.

The Acer ICONIA, a notebook computer with dual 14-inch touchscreens powered by Cypress’s TrueTouch technology, was named top product at the tenth annual “Last Gadget Standing” competition at this year’s Consumer Electronics Show (CES 2011). The Barnes & Noble Color Nook e-reader, which also features TrueTouch, was the “People’s Choice Award” winner.

Cypress shipped its 750 millionth PSoC programmable system-on-chip in the third quarter, marking one of the fastest-ever embedded product ramps. PSoC began commercial shipments in 2002. Powerful new PSoC 3 and PSoC 5 solutions dramatically improve the analog performance and processing power of PSoC 1, expanding Cypress’s addressed market from $1.6 billion to more than $15 billion.

PSoC played a pivotal role in the recent rescue of 33 Chilean miners. A PSoC-enabled camera, which provided the first images of the trapped miners, was designed by Cypress customer Central California Video Engineering & Manufacturing. A single PSoC chip replaced a two-inch-wide circuit board in the superslim camera, enabling it to be dropped down a borehole to the miners.

Epson selected Cypress’s CapSense® capacitive touch solution to control buttons and LED prompts on four new printer models, including the Artisan 725, Epson Stylus Photo PX720WD, Epson Stylus Photo TX720WD, and Epson Stylus Photo PX660. Cypress is a world-leader in capacitive touch sensing, having replaced more than 3.5 billion mechanical buttons.

Pioneer chose Cypress’s CapSense solution to implement the capacitive touch-sensing controls in its SD8200 family of cordless digital phones. A single CapSense device controls 22 capacitive buttons on the phones and illuminates the buttons when selected.

Cypress announced that Microsoft’s new Arc Touch Mouse has a CapSense-driven touch scroll strip to navigate documents and web pages, rather than a traditional mechanical scroll wheel.

Cypress announced that it has entered into a definitive agreement with ON Semiconductor (Nasdaq:ONNN) under which ON will acquire Cypress’s CMOS image sensor business unit for approximately $31.4 million in cash, pending the completion of various closing conditions and regulatory approvals. The companies expect the transaction to close before the end of the first quarter of 2011.  

Cypress announced that Macy’s is replacing about 117,000 traditional incandescent light bulbs in 86 stores nationwide with Cypress-powered LED lamps from lighting designer MSi that use about 73 percent less energy. 

Cypress introduced the industry’s first radiation-hardened 72-MBit QDR II SRAMs. The new SRAMs employ Cypress’s patented RadStop™ technology, which enables uncompromised functionality in the face of radiation doses of up to 300 kRads. The SRAMs operate at speeds up to 250 MHz with throughput of up to 36 gigabits per second, and are designed for aerospace and military applications.

Cypress announced two new 65 nm Quad Data Rate™ (QDRII™ and QDRII ) and Double Data Rate (DDRII and DDRII ) SRAMs at 36-Mbit and 18-Mbit densities. Cypress offers the industry’s broadest portfolio of 65-nm synchronous SRAMs, which includes densities up to 144 Mbits and speeds up to 550 MHz. 

AgigA Tech announced that its AGIGARAM™ Non-Volatile System (NVS) has been named the Most Innovative New Product of 2010 in the Hardware and General Technology category at the 23rd CONNECT Awards hosted by CONNECT, a San Diego-based nonprofit dedicated to creating and sustaining innovative technology.

               Cypress announced that it has registered more than 20,000 users in its Cypress Developer Community™, an online environment with forums, videos and blogs that enables Cypress customers to share design techniques about PSoC® and other Cypress products. The site is located at




Cypress delivers high-performance, mixed-signal, programmable solutions that provide customers with rapid time-to-market and exceptional system value. Cypress offerings include the flagship PSoC® programmable system-on-chip families and derivatives such as PowerPSoC® solutions for high-voltage and LED lighting applications, CapSense® touch sensing and TrueTouch™ solutions for touchscreens. Cypress is the world leader in USB controllers, including the high-performance West Bridge® solution that enhances connectivity and performance in multimedia handsets. Cypress is also a leader in high-performance memories and programmable timing devices. Cypress serves numerous markets including consumer, mobile handsets, computation, data communications, automotive, industrial and military. Cypress trades on the Nasdaq Global Select Market under the ticker symbol CY. Visit Cypress online at




Statements herein that are not historical facts and that refer to Cypress or its subsidiaries’ plans and expectations for first quarter of fiscal year 2011 and the future are forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. We may use words such as “believe,” “expect,” “future,” “plan,” “intend” and similar expressions to identify such forward-looking statements that include, but are not limited to, statements related to the strong profits and cash flow we expect from our SRAM products, our future revenue expectations based on our touchscreen business, the intent and timing of our manufacturing expansion, the strength and growth of our proprietary and programmable products, including  TrueTouch and  PSoC families, and our expectations regarding product and design wins. Such statements reflect our current expectations, which are based on information and data available to our management as of the date of this release. Our actual results may differ materially due a variety of uncertainties and risk factors, including but not limited to the state of and future of the global economy, business conditions and growth trends in the semiconductor market, our ability to enter into new markets with our portfolio of products, whether our products perform as expected, whether the demand for our proprietary and programmable products, including especially our TrueTouch and PSoC products, is fully realized, whether our product and design wins result in increased sales, customer acceptance of Cypress and its subsidiaries’ products, seasonality in the markets we serve, our ability to achieve lower operating expenses and maintain a solid balance sheet, our ability to manage our factory utilization and expansion, the strength or softness of the markets we serve and whether those markets achieve expected growth,  the financial performance of our subsidiaries and Emerging Technology Division, our ability to outgrow the market in revenue once the economy recovers and other risks described in our filings with the Securities and Exchange Commission. We assume no responsibility to update any such forward-looking statements.


Cypress, the Cypress logo, PSoC, CapSense, PowerPSoC, West Bridge and QDR are registered trademarks of Cypress Semiconductor Corp. Programmable System-on-Chip, TrueTouch, CapSense, RadStop, Cypress Developer Community, QDRII, and Quad Data Rate are trademarks of Cypress Semiconductor Corp. AGIGARAM is a trademark of AgigA Tech Corp. Windows is a registered trademark of Microsoft Corp. All other trademarks or registered trademarks are the property of their respective owners.