Cypress, First-Quarter 2012 Guidance

Cypress Updates First-Quarter 2012 Guidance

News Release from: Cypress Semiconductor
21 March 2012

"We have recently seen some order decreases, mostly in certain wire line and handset customers. In addition we are seeing weaker than expected revenues from our distribution channel, mainly due to lower turns business in Europe and Asia. These factors are resulting in a negative impact to our previously expected Q1 2012 revenue," stated Brad Buss, Executive Vice President of Finance and CFO.

“Customer backlog and bookings stabilized in January and we have seen improvements for the last six weeks. We continue to believe that Q1 will be the bottom for revenue and bookings, and at this point expect Q2 revenue to grow sequentially. However the macro environment and order patterns remain very fluid and lead-times are near historical lows, impacting visibility,” continued Brad Buss.

Cypress’s revised Q1 2012 Non-GAAP guidance is as follows:

• Revenue of $180 million to $190 million. We expect all divisions and most product lines to decrease sequentially, driven mostly by CCD and MPD.

• Gross margin of 53% to 54%, which is down mainly due to lower factory utilization as we reduce wafer starts in order to proactively manage inventory levels for Q1 and Q2.

• Operating expenses of $82 million to $83 million.

• Fully diluted earnings per share of $0.08 to $0.11.

Any estimate in this environment has a high degree of risk and current estimates could differ materially from actual results.

“We continue to remain very optimistic about our competitive positioning, our design-win penetration and our new product offerings, in particular our Gen4 TrueTouch® touch-sensing solutions, PSoC® 3 and 5 programmable-systems-on-chip, USB 3.0 controllers and trackpad solutions,” concluded Brad Buss.