Cypress Receives Favorable Ruling From IRS With Respect to a Potential Tax-Free Distribution...

Cypress Receives Favorable Ruling From IRS With Respect to a Potential Tax-Free Distribution of its SunPower Class B Common Shares

SAN JOSE, Calif.--(Business Wire)--
Cypress Semiconductor Corporation (NYSE:CY) today announced that
on April 16, 2008, it received a favorable ruling from the Internal
Revenue Service (IRS) with respect to certain tax issues arising under
Section 355 of the Internal Revenue Code in connection with the
potential spin-off to its shareholders of its current ownership of
Class B common shares of SunPower Corporation. This ruling removes a
major hurdle that could potentially allow Cypress to spin-off its
holdings in SunPower prior to November 2009. Cypress currently owns
44,533,287 Class B common shares of SunPower.

Cypress is continuing to analyze the additional steps necessary to
effect the distribution of its SunPower shares in numerous areas,
including but not limited to, other taxing jurisdictions, its current
and future capital structure, employee equity plans, outstanding
convertible indebtedness and transactions and relationships with
SunPower.

NO DECISION TO EFFECT A SEPARATION OF CYPRESS AND SUNPOWER HAS
BEEN MADE AT THIS TIME AND NO ASSURANCE CAN BE GIVEN THAT SUCH A
DECISION WILL BE MADE. FURTHER, IF A SEPARATION IS EFFECTED, NO
ASSURANCE CAN BE GIVEN AS TO THE NUMBER OF SHARES TO BE DISTRIBUTED,
THE COSTS OR EFFECTS ON CYPRESS AND/OR SUNPOWER OF EFFECTING THE
SEPARATION OR THE IMPACT OF THE SEPARATION ON TRADING PRICES FOR
CYPRESS AND/OR SUNPOWER COMMON STOCK OR CYPRESS' EMPLOYEE EQUITY PLANS
AND OUTSTANDING CONVERTIBLE DEBT.

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
www.cypress.com.

FORWARD-LOOKING STATEMENTS

Statements herein that are not historical facts and that refer to
Cypress or its subsidiaries' plans and expectations for the future are
forward-looking statements made pursuant to the Private Securities
Litigation Reform Act of 1995. We 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 terms of any potential
distribution of SunPower shares, the costs or effects on Cypress
and/or SunPower of effecting any such separation, the impact of any
such separation on trading prices for Cypress and/or SunPower common
stock or Cypress' employee equity plans and outstanding convertible
debt, or the outcome of our discussions with certain tax agencies.
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 risks described in our
filings, as well as SunPower's filings, with the Securities and
Exchange Commission. We assume no responsibility to update any such
forward-looking statements.

Cypress, the Cypress logo, and PSoC are registered trademarks of
Cypress Semiconductor Corporation. PSoC Express, Programmable
System-on-Chip, EZ-Color, CapSense, West Bridge and Astoria are
trademarks of Cypress Semiconductor Corporation. SunPower is a
registered trademark of SunPower Corporation. All other trademarks or
registered trademarks are the property of their respective owners.

Cypress Semiconductor Corporation
Brad W. Buss, 408-943-2754
EVP Finance & Administration and CFO
Joseph L. McCarthy, 408-943-2902
VP Corporate Communications

Copyright Business Wire 2008