Cypress Reports First-Quarter 2008 Results

-- Cypress achieved consolidated quarterly revenue of $442.1
million, exceeded guidance and grew 29% year-on-year.

-- SunPower achieved record quarterly revenue of $274 million, up
92% year-on-year.

-- Our West Bridge(TM) product family exceeded revenue
expectations, growing 44% sequentially.

-- Our PSoC(R) customer base grew to a record 6,991 customers, up
from 6,301 in Q407.

-- Cypress repurchased 12.6 million shares at an average price of
$21.95.
SAN JOSE, Calif.--(Business Wire)--
Cypress Semiconductor Corp. (NYSE:CY) today announced that revenue
for the 2008 first quarter was $442.1 million, up 2.5% from $431.2
million for the prior quarter, and up 28.9% from $342.9 million for
the year-ago period.

Q108 revenue includes a charge of $20.8 million from the planned
conversion of Asian distributors to a deferred revenue recognition
model. The revenue deferral and associated margin impact is equivalent
to a net loss of $10.8 million or approximately $0.07 per share on
both a GAAP and non-GAAP(1) basis.

Cypress recorded a GAAP net loss of $18.4 million in the 2008
first quarter, or a diluted loss per share of $0.12. That compares
with last quarter's diluted earnings per share of $0.01. GAAP diluted
net loss per share in the year-ago first quarter was $0.01. GAAP
diluted loss per share on a sequential basis was impacted by
semiconductor seasonality and higher expenses related to restructuring
and asset impairments as well as the distributor revenue deferral
described above.

Non-GAAP(1) net income for the 2008 first quarter -- earnings that
exclude stock-based compensation, acquisition-related charges and
other special charges and credits -- totaled $19.9 million, or diluted
earnings per share of $0.12. That compares with non-GAAP(1) diluted
earnings per share of $0.24 for the prior quarter and $0.16 for the
year-ago first quarter.

Cypress's President and CEO T.J. Rodgers said, "Cypress increased
revenue and exceeded guidance in a challenging economic environment.
On the semiconductor side of our business, despite enduring what we
see as the bottom quarter of the current slowdown, we continue to see
strong design win penetration for our expanding portfolio of
proprietary products, including our PSoC devices and West Bridge
family of peripheral controllers. ASPs remained strong across all
divisions. Our semiconductor(2) book-to-bill ratio ended the first
quarter at 1.07, compared with 0.88 in the 2007 fourth quarter. In
addition, SunPower had a great quarter with record quarterly revenue."

Rodgers continued, "We remain cautious about the economy, but
believe that we will achieve strong sequential revenue growth, driven
both by SunPower and our semiconductor business. We expect record
consolidated quarterly revenue both in Q2 and for all of fiscal 2008
-- and we plan to increase profit at a far greater rate than sales."

BUSINESS REVIEW

+ On a GAAP basis, first-quarter consolidated gross margin was
31.0%. Semiconductor(2) gross margin for the first quarter was 47.7%,
up 0.3 percentage points from the previous quarter.

+ Non-GAAP(1) consolidated gross margin for the first quarter was
34.2%, down 2.4 percentage points from the previous quarter, due
mainly to a higher mix of revenue from SunPower.

+ Non-GAAP(1) semiconductor(2) gross margin for the first quarter
was 50.7%, up 1.9 percentage points from 48.8% in the previous
quarter. Semiconductor(2) gross margin improved in Q1 due to revenue
mix, higher factory absorption and inventory-related adjustments.

Additional first-quarter data and comparisons relevant to
Cypress's business units are presented below:

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*T
BUSINESS UNIT SUMMARY FINANCIALS (UNAUDITED)

THREE MONTHS ENDED
March 30, 2008
Total
Semicon- Consoli-
CCD(3) DCD(3) MID(3) Other ductor(2) SPWR dated
---------------------------------------------------------
REVENUE(4)
($M) 63.0 28.3 74.6 2.5 168.4 273.7 442.1
Percentage
of total
revenues 14.3% 6.4% 16.9% 0.5% 38.1% 61.9% 100.0%

GROSS MARGIN
(%)
On a GAAP
basis 47.1% 68.8% 41.4% 14.7% 47.7% 20.7% 31.0%
On a non-
GAAP(1)
basis 50.1% 71.8% 44.4% 11.2% 50.7% 24.0% 34.2%

Total
Semiconductor(2) SPWR Consolidated
-----------------------------------
NET INCOME
(LOSS)(5)
($M)
On a GAAP
basis (25.6) 7.2 (18.4)
On a non-
GAAP(1)
basis 1.6 18.3 19.9

DILUTED NET
INCOME
(LOSS) PER
SHARE (6)
($)
On a GAAP
basis (0.16) 0.04 (0.12)
On a non-
GAAP(1)
basis 0.01 0.11 0.12
*T

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THREE MONTHS ENDED
December 30, 2007
Total
Semicon- Consoli-
CCD(3) DCD(3) MID(3) Other ductor(2) SPWR dated
---------------------------------------------------------
REVENUE ($M) 92.4 28.2 82.6 3.7 206.9 224.3 431.2
Percentage
of total
revenues 21.4% 6.5% 19.2% 0.9% 48.0% 52.0% 100.0%

GROSS MARGIN
(%)
On a GAAP
basis 46.8% 72.2% 41.3% 8.3% 47.4% 23.8% 35.1%
On a non-
GAAP(1)
basis 48.4% 73.0% 43.0% 5.5% 48.8% 25.3% 36.6%

Total
Semiconductor(2) SPWR Consolidated
-----------------------------------
NET INCOME
($M)
On a GAAP
basis 0.4 2.7 3.1
On a non-
GAAP(1)
basis 27.5 18.7 46.2

DILUTED NET
INCOME PER
SHARE ($)
On a GAAP
basis 0.00 0.01 0.01
On a non-
GAAP(1)
basis 0.15 0.09 0.24
*T

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*T
1. Refer to "Reconciliation of GAAP Financial Measures to Non-GAAP
Financial Measures" and "Notes to Non-GAAP Financial Measures"
following this press release for a detailed discussion of
management's use of non-GAAP financial measures, as well as
reconciliations of all non-GAAP financial measures presented in
this press release to the most directly comparable GAAP
financial measures.
2. "Semiconductor" includes all of Cypress's business segments
except for SunPower.
3. CCD - Consumer and Computation Division; DCD - Data
Communications Division; MID - Memory and Imaging Division.
4. Q108 semiconductor revenue was reduced by $20.8 million due to
the conversion of Asian distributors to a deferred revenue
recognition model.
5. Q108 semiconductor net income (loss) was reduced (increased) by
$10.8 million due to the conversion of Asian distributors to a
deferred revenue recognition model.
6. Q108 semiconductor diluted net income (loss) per share was
reduced (increased) by approximately $0.07 per share due to the
conversion of Asian distributors to a deferred revenue
recognition model.
*T

FIRST-QUARTER 2008 HIGHLIGHTS

+ Cypress grew its PSoC customer base to 6,991 for the quarter, up
66.5% year-on-year. Cypress's global PSoC customers include such
well-known companies as HP, JVC and Pioneer.

+ The number of customer engineers that have undergone PSoC
training increased from 7,848 in Q107 to 10,118 in Q108. Internet
seminars, on-demand training and workshops create awareness and
knowledge about Cypress products and solutions and help to accelerate
the sales process.

+ Cypress introduced its CapSense Express(TM) solution, enabling
designers to implement up to 10 capacitive touch-sensing buttons
and/or sliders in as little as five minutes with no coding. Highly
integrated PSoC-based CapSense(TM) devices reduce component count and
cost in customer systems and accelerate time-to-market. Cypress has
replaced more than 2.5 billion buttons and sliders with CapSense
technology.

+ A new college textbook focused on PSoC mixed-signal array
design, "Introduction to Mixed-Signal, Embedded Design," is now
available at www.cypress.com/buyonline.

+ Professional gaming mouse maker, SteelSeries, selected Cypress's
OvationONS(TM) laser navigation sensor to power its new Ikari laser
gaming mouse. The mouse recently received perfect scores from two
industry-leading hardware review websites.

+ Taiwan-based Behavior Tech Computer Corporation selected
Cypress's OvationONS sensor, WirelessUSB(TM) LP 2.4-GHz radio
system-on-chip and enCoRe(R) III microcontroller for a new wireless
keyboard. The design highlights Cypress's unique position as a
provider of complete solutions for wireless human interface devices.

+ Cypress's Board of Directors authorized a $300 million addition
to the company's stock repurchase program, increasing the size of the
program to $600 million. To date under this program, the company spent
$277 million to purchase 12.6 million shares of stock at an average
price of $21.95.

+ SunPower signed two long-term polysilicon supply agreements with
NorSun that will support 2,500 megawatts of solar cell production. The
company also signed a 3,000-megawatt silicon supply agreement with
China's Jupiter, Qingdao DTK Industries Co.

+ SunPower announced plans to build an 8-megawatt solar-electric
power plant in Spain for The Naturener Group, a Spanish-based energy
firm. The plant will use SunPower's high-efficiency solar tracking
systems, which automatically rotate to follow the sun, maximizing
system output. In 2007, SunPower contracted with The Naturener Group
to build three power plants totaling 21 megawatts.

+ GE Energy Financial Services will finance five of SunPower's
recently announced California solar power projects, including
installations at Toyota Motor Sales, HP, Agilent and two county and
regional agencies. Separately, MMA Renewable Ventures announced that
it will finance SunPower solar-electric systems at 14 Macy's stores.
Third-party financing has become a popular option for companies that
want to install solar without having to pay up-front installation
costs.

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 second
quarter of 2008 and 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" and similar
expressions to identify such forward-looking statements that include,
but are not limited to, statements related to the semiconductor
market, the state and future of the economy, our design win
penetration, expected revenue growth, bookings and profitability, and
the success of SunPower's financing arrangements, supply agreements
and solar-electric power plant projects. 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 economic conditions and
growth trends in the semiconductor and solar power industries, the
state of the global economy, the actions of our competitors, whether
the demand for programmable portfolio of products, including
especially, our PSoC and West Bridge products is fully realized, our
ability to convert our PSoC marketing and education initiatives into
product sales, customer acceptance of Cypress and its subsidiaries'
products as evidenced by design wins, factory utilization, the
seasonality in the markets we serve, our ability to maintain and
improve our gross margins and realize our bookings, the success of
SunPower's financing and supply arrangements, SunPower's ability to
execute on its plan for a solar-electric power plant and other 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, PSoC and enCoRe are registered
trademarks of Cypress Semiconductor Corporation. West Bridge, CapSense
Express, CapSense, OvationONS, Programmable System-on-Chip, and
WirelessUSB 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.

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*T

CYPRESS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

-------------------------
March 30, December 30,
2008 2007
------------ ------------

ASSETS

Cash, cash equivalents and short-term
investments (a) $ 956,963 $ 1,426,405
Accounts receivable, net 250,498 236,275
Inventories, net 312,968 247,587
Property, plant and equipment, net 748,098 714,372
Goodwill and other intangible assets 600,891 593,331
Other assets 615,665 507,979
------------ ------------
Total assets $ 3,485,083 $ 3,725,949
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable $ 198,099 $ 171,126
Deferred income 43,034 38,452
Convertible debt (b) 1,025,000 1,025,000
Income tax liabilities 77,423 74,157
Other accrued liabilities 287,704 318,382
------------ ------------
Total liabilities 1,631,260 1,627,117
Minority interest 394,909 378,400
Stockholders' equity 1,458,914 1,720,432
------------ ------------
Total liabilities and stockholders'
equity $ 3,485,083 $ 3,725,949
============-============

(a) Does not include $75.0 million and $67.8 million of auction rate
securities, which were classified as long-term investments in "Other
assets" as of March 30, 2008 and December 30, 2007, respectively.
(b) Convertible debt was long-term as of March 30, 2008, and short-
term as of December 30, 2007.
*T

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*T

CYPRESS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
ON A GAAP BASIS
(In thousands, except per-share data)
(Unaudited)

--------------------------------------
THREE MONTHS ENDED
--------------------------------------
March 30, December 30, April 1,
2008 2007 2007
------------ ------------ ------------

Revenues $ 442,083 $ 431,214 $ 342,852
Cost of revenues 305,215 279,885 210,547
------------ ------------ ------------
Gross margin 136,868 151,329 132,305
Operating expenses (credits):
Research and development 49,138 46,054 52,370
Selling, general and
administrative 91,773 84,350 68,705
Amortization of acquisition-
related intangibles 5,976 8,816 9,220
In-process research and
development charge - - 9,575
Impairment related to
synthetic lease - - 7,006
Gains on divestitures - (529) (10,782)
Restructuring charges 2,412 583 -
------------ ------------ ------------
Total operating
expenses, net 149,299 139,274 136,094
------------ ------------ ------------
Operating income (loss) (12,431) 12,055 (3,789)
Interest and other income
(expense), net 6,912 (6,882) 1,141
------------ ------------ ------------
Income (loss) before income tax
and minority interest (5,519) 5,173 (2,648)
Income tax benefit (provision) (7,283) 103 993
Minority interest, net of tax (5,560) (2,138) (366)
------------ ------------ ------------
Net income (loss) $ (18,362) $ 3,138 $ (2,021)
============ ============ ============

Basic net income (loss) per
share $ (0.12) $ 0.02 $ (0.01)
Diluted net income (loss) per
share $ (0.12) $ 0.01 $ (0.01)

Shares used in per-share
calculation:
Basic 154,960 159,578 155,699
Diluted 154,960 183,364 155,699
--------------------------------------
*T

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CYPRESS SEMICONDUCTOR CORPORATION
CYPRESS' OWNERSHIP INTEREST IN SUNPOWER
(In thousands, except percentages)
(Unaudited)

--------------------------------------
March 30, December 30, April 1,
2008 2007 2007
------------ ------------ ------------

Number of SunPower's class B
common shares held by Cypress 44,533 44,533 52,033
As a percentage of SunPower's
outstanding capital stock 56% 56% 70%
As a percentage of SunPower's
outstanding capital stock on a
fully diluted basis 52% 51% 64%
As a percentage of total
voting rights of SunPower's
outstanding capital stock 90% 90% 94%
Fair value of Cypress'
ownership interest in
SunPower (a) $ 3,278,965 $ 5,836,050 $ 2,367,502

--------------------------------------

(a) Fair value was determined using SunPower's closing stock price as
of the end of each applicable quarter, which was $73.63 for Q1-
FY2008, $131.05 for Q4-FY2007 and $45.50 for Q1-FY2007.
*T

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*T

CYPRESS SEMICONDUCTOR CORPORATION
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL
MEASURES(1)
(In thousands)
(Unaudited)

----------------------------------------
THREE MONTHS ENDED
----------------------------------------
March 30, 2008
----------------------------------------
CCD (a) DCD (a) MID (a) Other
--------- --------- --------- ----------

GAAP gross margin $ 29,620 $ 19,484 $ 30,871 $ 361
Stock-based compensation
expense 1,282 577 1,521 50
Impairment of assets 648 292 769 25
Other acquisition-related
expense 1 - - -
Changes in value of deferred
compensation plan - - - (158)
--------- --------- --------- ----------
Non-GAAP gross margin $ 31,551 $ 20,353 $ 33,161 $ 278
=========-=========-=========-==========

------------------------------------------
THREE MONTHS ENDED
------------------------------------------
March 30, 2008
------------------------------------------
Semiconductor (b) SunPower Consolidated
----------------- --------- ------------

GAAP gross margin $ 80,336 $ 56,532 $ 136,868
Stock-based compensation
expense 3,430 3,714 7,144
Impairment of assets 1,734 5,489 7,223
Other acquisition-related
expense 1 - 1
Changes in value of
deferred compensation plan (158) - (158)
----------------- --------- ------------
Non-GAAP gross margin $ 85,343 $ 65,735 $ 151,078
--=================-=========-============

----------------------------------------
THREE MONTHS ENDED
----------------------------------------
December 30, 2007
----------------------------------------
CCD DCD MID Other
--------- --------- --------- ----------

GAAP gross margin $ 43,220 $ 20,343 $ 34,095 $ 304
Stock-based compensation
expense 1,472 235 1,451 108
Other acquisition-related
expense 1 - - -
Changes in value of deferred
compensation plan - - - (210)
--------- --------- --------- ----------
Non-GAAP gross margin $ 44,693 $ 20,578 $ 35,546 $ 202
=========-=========-=========-==========

------------------------------------------
THREE MONTHS ENDED
------------------------------------------
December 30, 2007
------------------------------------------
Semiconductor SunPower Consolidated
----------------- --------- ------------

GAAP gross margin $ 97,962 $ 53,367 $ 151,329
Stock-based compensation
expense 3,266 3,364 6,630
Other acquisition-related
expense 1 - 1
Changes in value of
deferred compensation plan (210) - (210)
----------------- --------- ------------
Non-GAAP gross margin $ 101,019 $ 56,731 $ 157,750
--=================-=========-============

----------------------------------------
THREE MONTHS ENDED
----------------------------------------
April 1, 2007
----------------------------------------
CCD DCD MID Other
--------- --------- --------- ----------

GAAP gross margin $ 32,454 $ 21,149 $ 34,842 $ 5,366
Stock-based compensation
expense 1,192 306 1,342 31
Fair value adjustment to
deferred revenue - - - -
Other acquisition-related
expense 4 - - -
Changes in value of deferred
compensation plan - - - (7)
--------- --------- --------- ----------
Non-GAAP gross margin $ 33,650 $ 21,455 $ 36,184 $ 5,390
=========-=========-=========-==========

------------------------------------------
THREE MONTHS ENDED
------------------------------------------
April 1, 2007
------------------------------------------
Semiconductor SunPower Consolidated
----------------- --------- ------------

GAAP gross margin $ 93,811 $ 38,494 $ 132,305
Stock-based compensation
expense 2,871 2,250 5,121
Fair value adjustment to
deferred revenue - 833 833
Other acquisition-related
expense 4 - 4
Changes in value of
deferred compensation plan (7) - (7)
----------------- --------- ------------
Non-GAAP gross margin $ 96,679 $ 41,577 $ 138,256
--=================-=========-============

(1) Please refer to the accompanying "Notes to Non-GAAP Financial
Measures" for a detailed discussion of management's use of non-GAAP
financial measures.
(a) CCD - Consumer and Computation Division; DCD - Data Communications
Division; MID - Memory and Imaging Division.
(b) Semiconductor includes all Cypress' business segments except for
SunPower.
*T

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*T

CYPRESS SEMICONDUCTOR CORPORATION
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL
MEASURES(1)
(In thousands, except per-share data)
(Unaudited)

-----------------------------------------
THREE MONTHS ENDED
-----------------------------------------
March 30, 2008
-----------------------------------------
Semiconductor SunPower Consolidated
------------- ------------- -------------
GAAP research and
development expenses $ 44,496 $ 4,642 $ 49,138
Stock-based compensation
expense (5,257) (811) (6,068)
Other acquisition-related
expense (78) - (78)
Changes in value of
deferred compensation plan 182 - 182
------------- ------------- -------------
Non-GAAP research and
development expenses $ 39,343 $ 3,831 $ 43,174
============= ============= =============

GAAP selling, general and
administrative expenses $ 59,019 $ 32,754 $ 91,773
Stock-based compensation
expense (9,556) (9,983) (19,539)
Other acquisition-related
expense (48) - (48)
Changes in value of
deferred compensation plan 139 - 139
Release of allowance for
uncollectible employee
loans 88 - 88
------------- ------------- -------------
Non-GAAP selling, general
and administrative expenses $ 49,642 $ 22,771 $ 72,413
============= ============= =============

GAAP operating income (loss) $ (27,251) $ 14,820 $ (12,431)
Stock-based compensation
expense 18,243 14,508 32,751
Impairment of assets 1,734 5,489 7,223
Acquisition-related
expense:
Fair value adjustment to
deferred revenue - - -
Amortization of
acquisition-related
intangibles 1,659 4,317 5,976
In-process research and
development charge - - -
Other acquisition-related
expense 127 - 127
Changes in value of
deferred compensation plan (479) - (479)
Release of allowance for
uncollectible employee
loans (88) - (88)
Impairment related to
synthetic lease - - -
Gains on divestitures - - -
Restructuring charges 2,412 - 2,412
------------- ------------- -------------
Non-GAAP operating income
(loss) $ (3,643) $ 39,134 $ 35,491
============= ============= =============

GAAP net income (loss) $ (25,560) $ 7,198 $ (18,362)
Stock-based compensation
expense 18,243 14,508 32,751
Impairment of assets 1,734 5,489 7,223
Acquisition-related
expense:
Fair value adjustment to
deferred revenue - - -
Amortization of
acquisition-related
intangibles 1,659 4,317 5,976
In-process research and
development charge - - -
Other acquisition-related
expense 127 - 127
Changes in value of
deferred compensation plan (479) - (479)
Release of allowance for
uncollectible employee
loans (88) - (88)
Impairment related to
synthetic lease - - -
Gains on divestitures - - -
Restructuring charges 2,412 - 2,412
Investment-related
gains/losses (26) - (26)
Write-off of unamortized
bond issuance costs 1,557 972 2,529
Tax effects 2,067 (5,483) (3,416)
Related minority interest
adjustment - (8,699) (8,699)
------------- ------------- -------------
Non-GAAP net income $ 1,646 $ 18,302 $ 19,948
=============-=============-=============

-----------------------------------------
GAAP net income (loss) per
share - diluted $ (0.16) $ 0.04 $ (0.12)
Stock-based compensation
expense 0.12 0.08 0.20
Impairment of assets 0.01 0.03 0.04
Acquisition-related
expense:
Fair value adjustment to
deferred revenue - - -
Amortization of
acquisition-related
intangibles 0.01 0.03 0.04
In-process research and
development charge - - -
Other acquisition-related
expense - - -
Changes in value of
deferred compensation plan - - -
Release of allowance for
uncollectible employee
loans - - -
Impairment related to
synthetic lease - - -
Gains on divestitures - - -
Restructuring charges 0.01 - 0.01
Investment-related
gains/losses - - -
Write-off of unamortized
bond issuance costs 0.01 0.01 0.02
Tax effects 0.01 (0.03) (0.02)
Related minority interest
adjustment - (0.05) (0.05)
------------- ------------- -------------
Non-GAAP net income per
share - diluted $ 0.01 $ 0.11 $ 0.12
=============-=============-=============

-----------------------------------------
THREE MONTHS ENDED
-----------------------------------------
December 30, 2007
-----------------------------------------
Semiconductor SunPower Consolidated
------------- ------------- -------------
GAAP research and
development expenses $ 42,150 $ 3,904 $ 46,054
Stock-based compensation
expense (4,152) (564) (4,716)
Other acquisition-related
expense (79) - (79)
Changes in value of
deferred compensation plan 243 - 243
------------- ------------- -------------
Non-GAAP research and
development expenses $ 38,162 $ 3,340 $ 41,502
============= ============= =============

GAAP selling, general and
administrative expenses $ 53,229 $ 31,121 $ 84,350
Stock-based compensation
expense (11,331) (10,087) (21,418)
Other acquisition-related
expense (48) - (48)
Changes in value of
deferred compensation plan 184 - 184
Release of allowance for
uncollectible employee
loans 615 - 615
------------- ------------- -------------
Non-GAAP selling, general
and administrative expenses $ 42,649 $ 21,034 $ 63,683
============= ============= =============

GAAP operating income (loss) $ 845 $ 11,210 $ 12,055
Stock-based compensation
expense 18,749 14,015 32,764
Impairment of assets - - -
Acquisition-related
expense:
Fair value adjustment to
deferred revenue - - -
Amortization of
acquisition-related
intangibles 1,684 7,132 8,816
In-process research and
development charge - - -
Other acquisition-related
expense 128 - 128
Changes in value of
deferred compensation plan (637) - (637)
Release of allowance for
uncollectible employee
loans (615) - (615)
Impairment related to
synthetic lease - - -
Gains on divestitures (529) - (529)
Restructuring charges 583 - 583
------------- ------------- -------------
Non-GAAP operating income
(loss) $ 20,208 $ 32,357 $ 52,565
============= ============= =============

GAAP net income (loss) $ 409 $ 2,729 $ 3,138
Stock-based compensation
expense 18,749 14,015 32,764
Impairment of assets - - -
Acquisition-related
expense:
Fair value adjustment to
deferred revenue - - -
Amortization of
acquisition-related
intangibles 1,684 7,132 8,816
In-process research and
development charge - - -
Other acquisition-related
expense 128 - 128
Changes in value of
deferred compensation plan (637) - (637)
Release of allowance for
uncollectible employee
loans (615) - (615)
Impairment related to
synthetic lease - - -
Gains on divestitures (529) - (529)
Restructuring charges 583 - 583
Investment-related
gains/losses 5,831 - 5,831
Write-off of unamortized
bond issuance costs 7,009 8,260 15,269
Tax effects (5,133) (993) (6,126)
Related minority interest
adjustment - (12,422) (12,422)
------------- ------------- -------------
Non-GAAP net income $ 27,479 $ 18,721 $ 46,200
=============-=============-=============

-----------------------------------------
GAAP net income (loss) per
share - diluted $ - $ 0.01 $ 0.01
Stock-based compensation
expense 0.10 0.07 0.17
Impairment of assets - - -
Acquisition-related
expense:
Fair value adjustment to
deferred revenue - - -
Amortization of
acquisition-related
intangibles 0.01 0.04 0.05
In-process research and
development charge - - -
Other acquisition-related
expense - - -
Changes in value of
deferred compensation plan - - -
Release of allowance for
uncollectible employee
loans - - -
Impairment related to
synthetic lease - - -
Gains on divestitures - - -
Restructuring charges - - -
Investment-related
gains/losses 0.03 - 0.03
Write-off of unamortized
bond issuance costs 0.04 0.04 0.08
Tax effects (0.03) - (0.03)
Related minority interest
adjustment - (0.07) (0.07)
------------- ------------- -------------
Non-GAAP net income per
share - diluted $ 0.15 $ 0.09 $ 0.24
=============-=============-=============

-----------------------------------------
THREE MONTHS ENDED
-----------------------------------------
April 1, 2007
-----------------------------------------
Semiconductor SunPower Consolidated
------------- ------------- -------------
GAAP research and
development expenses $ 49,434 $ 2,936 $ 52,370
Stock-based compensation
expense (3,658) (501) (4,159)
Other acquisition-related
expense (89) - (89)
Changes in value of
deferred compensation plan 7 - 7
------------- ------------- -------------
Non-GAAP research and
development expenses $ 45,694 $ 2,435 $ 48,129
============= ============= =============

GAAP selling, general and
administrative expenses $ 47,176 $ 21,529 $ 68,705
Stock-based compensation
expense (4,973) (7,852) (12,825)
Other acquisition-related
expense (228) - (228)
Changes in value of
deferred compensation plan 6 - 6
Release of allowance for
uncollectible employee
loans - - -
------------- ------------- -------------
Non-GAAP selling, general
and administrative expenses $ 41,981 $ 13,677 $ 55,658
============= ============= =============

GAAP operating income (loss) $ (1,332) $ (2,457) $ (3,789)
Stock-based compensation
expense 11,502 10,603 22,105
Impairment of assets - - -
Acquisition-related
expense:
Fair value adjustment to
deferred revenue - 833 833
Amortization of
acquisition-related
intangibles 2,309 6,911 9,220
In-process research and
development charge - 9,575 9,575
Other acquisition-related
expense 321 - 321
Changes in value of
deferred compensation plan (20) - (20)
Release of allowance for
uncollectible employee
loans - - -
Impairment related to
synthetic lease 7,006 - 7,006
Gains on divestitures (10,782) - (10,782)
Restructuring charges - - -
------------- ------------- -------------
Non-GAAP operating income
(loss) $ 9,004 $ 25,465 $ 34,469
============= ============= =============

GAAP net income (loss) $ (2,891) $ 870 $ (2,021)
Stock-based compensation
expense 11,502 10,603 22,105
Impairment of assets - - -
Acquisition-related
expense:
Fair value adjustment to
deferred revenue - 833 833
Amortization of
acquisition-related
intangibles 2,309 6,911 9,220
In-process research and
development charge - 9,575 9,575
Other acquisition-related
expense 321 - 321
Changes in value of
deferred compensation plan (20) - (20)
Release of allowance for
uncollectible employee
loans - - -
Impairment related to
synthetic lease 7,006 - 7,006
Gains on divestitures (10,782) - (10,782)
Restructuring charges - - -
Investment-related
gains/losses (762) - (762)
Write-off of unamortized
bond issuance costs 4,651 - 4,651
Tax effects 535 (5,884) (5,349)
Related minority interest
adjustment - (6,620) (6,620)
------------- ------------- -------------
Non-GAAP net income $ 11,869 $ 16,288 $ 28,157
=============-=============-=============

-----------------------------------------
GAAP net income (loss) per
share - diluted $ (0.02) $ 0.01 $ (0.01)
Stock-based compensation
expense 0.07 0.06 0.13
Impairment of assets - - -
Acquisition-related
expense:
Fair value adjustment to
deferred revenue - 0.01 0.01
Amortization of
acquisition-related
intangibles 0.02 0.04 0.06
In-process research and
development charge - 0.06 0.06
Other acquisition-related
expense - - -
Changes in value of
deferred compensation plan - - -
Release of allowance for
uncollectible employee
loans - - -
Impairment related to
synthetic lease 0.04 - 0.04
Gains on divestitures (0.07) - (0.07)
Restructuring charges - - -
Investment-related
gains/losses - - -
Write-off of unamortized
bond issuance costs 0.03 - 0.03
Tax effects - (0.03) (0.03)
Related minority interest
adjustment - (0.06) (0.06)
------------- ------------- -------------
Non-GAAP net income per
share - diluted $ 0.07 $ 0.09 $ 0.16
=============-=============-=============

(1) Please refer to the accompanying "Notes to Non-GAAP Financial
Measures" for a detailed discussion of management's use of non-GAAP
financial measures.
*T

-0-
*T

CYPRESS SEMICONDUCTOR CORPORATION
CONSOLIDATED EPS CALCULATION
(In thousands, except share price and per-share data)
(Unaudited)

------------------- -------------------
THREE MONTHS ENDED THREE MONTHS ENDED
------------------- -------------------
March 30, 2008 December 30, 2007
------------------- -------------------
GAAP Non-GAAP GAAP Non-GAAP
--------- --------- --------- ---------

Quarterly average stock price $ 23.74 $ 23.74 $ 33.73 $ 33.73
Actual common shares
outstanding 150,234 150,234 161,641 161,641

Net income (loss) per share -
BASIC
Net income (loss) $(18,362) $ 19,948 $ 3,138 $ 46,200
Weighted-average common
shares outstanding 154,960 154,960 159,578 159,578
Net income (loss) per share -
BASIC $ (0.12) $ 0.13 $ 0.02 $ 0.29
========= ========= ========= =========

Net income (loss) per share -
DILUTED
Net income (loss) $(18,362) $ 19,948 $ 3,138 $ 46,200
Convertible debt interest
expense - - - -
SunPower adjustment and other
(a) - (969) (829) (1,411)
--------- --------- --------- ---------
Net income (loss) for diluted
computation $(18,362) $ 18,979 $ 2,309 $ 44,789
--------- --------- --------- ---------

Weighted-average common
shares 154,960 154,960 159,578 159,578
Effect of dilutive
securities:
Convertible debt - - 7,316 7,316
Warrants - - 5,009 5,009
Stock options and unvested
RSUs - 9,608 11,461 13,092
--------- --------- --------- ---------
Weighted-average common
shares outstanding for
diluted computation 154,960 164,568 183,364 184,995
--------- --------- --------- ---------

Net income (loss) per share -
DILUTED $ (0.12) $ 0.12 $ 0.01 $ 0.24
========= ========= ========= =========

------------------- -------------------

-------------------
THREE MONTHS ENDED
-------------------
April 1, 2007
-------------------
GAAP Non-GAAP
--------- ---------

Quarterly average stock price $ 18.47 $ 18.47
Actual common shares outstanding 152,684 152,684

Net income (loss) per share - BASIC
Net income (loss) $ (2,021) $ 28,157
Weighted-average common shares outstanding 155,699 155,699
Net income (loss) per share - BASIC $ (0.01) $ 0.18
========= =========

Net income (loss) per share - DILUTED
Net income (loss) $ (2,021) $ 28,157
Convertible debt interest expense - 1,173
SunPower adjustment and other (a) - (980)
--------- ---------
Net income (loss) for diluted computation $ (2,021) $ 28,350
--------- ---------

Weighted-average common shares 155,699 155,699
Effect of dilutive securities:
Convertible debt - 17,818
Warrants - -
Stock options and unvested RSUs - 8,032
--------- ---------
Weighted-average common shares outstanding for
diluted computation 155,699 181,549
--------- ---------

Net income (loss) per share - DILUTED $ (0.01) $ 0.16
========= =========

-------------------

(a) Includes primarily an adjustment to reflect Cypress's ownership
interest in SunPower on a diluted basis in accordance with SFAS No.
128.
*T

-0-
*T

CYPRESS SEMICONDUCTOR CORPORATION
SUPPLEMENTAL FINANCIAL DATA
(In thousands)
(Unaudited)

-----------------------------------------
March 30, 2008
-----------------------------------------
Semiconductor SunPower Consolidated
------------- ------------- -------------
Selected Balance Sheet Data:
----------------------------
Cash, cash equivalents and
short-term investments (a) $ 760,910 $ 196,053 $ 956,963
Accounts receivable, net $ 91,415 $ 159,083 $ 250,498
Inventories, net $ 124,765 $ 188,203 $ 312,968
Property, plant and
equipment, net $ 327,974 $ 420,124 $ 748,098
Goodwill and other
intangible assets $ 355,706 $ 245,185 $ 600,891
Accounts payable $ 45,541 $ 152,558 $ 198,099
Deferred income $ 43,034 $ - $ 43,034
Convertible debt (b) $ 600,000 $ 425,000 $ 1,025,000
Income tax liabilities $ 54,296 $ 23,127 $ 77,423

-----------------------------------------

-----------------------------------------
December 30, 2007
-----------------------------------------
Semiconductor SunPower Consolidated
------------- ------------- -------------
Selected Balance Sheet Data:
----------------------------
Cash, cash equivalents and
short-term investments (a) $ 1,035,739 $ 390,666 $ 1,426,405
Accounts receivable, net $ 97,755 $ 138,520 $ 236,275
Inventories, net $ 107,083 $ 140,504 $ 247,587
Property, plant and
equipment, net $ 336,378 $ 377,994 $ 714,372
Goodwill and other
intangible assets $ 357,701 $ 235,630 $ 593,331
Accounts payable $ 51,257 $ 119,869 $ 171,126
Deferred income $ 38,452 $ - $ 38,452
Convertible debt (b) $ 600,000 $ 425,000 $ 1,025,000
Income tax liabilities $ 52,666 $ 21,491 $ 74,157

-----------------------------------------

----------------------------------------------------------------------

-----------------------------------------
THREE MONTHS ENDED
-----------------------------------------
March 30, 2008
-----------------------------------------
Semiconductor SunPower Consolidated
------------- ------------- -------------
Other Supplemental Data
(Preliminary):
----------------------------
Capital expenditures $ 9,807 $ 50,790 $ 60,597
Depreciation $ 17,984 $ 10,085 $ 28,069

-----------------------------------------

----------------------------------------------------------------------

-----------------------------------------
THREE MONTHS ENDED
-----------------------------------------
December 30, 2007
-----------------------------------------
Semiconductor SunPower Consolidated
------------- ------------- -------------
Other Supplemental Data
(Preliminary):
----------------------------
Capital expenditures $ 10,812 $ 31,004 $ 41,816
Depreciation $ 18,913 $ 9,609 $ 28,522

-----------------------------------------

----------------------------------------------------------------------

-----------------------------------------
THREE MONTHS ENDED
-----------------------------------------
March 30, 2008
-----------------------------------------
Semiconductor SunPower Consolidated
------------- ------------- -------------
Selected Cash Flow Data
(Preliminary):
----------------------------
Net cash provided by (used
in) operating activities $ 10,304 $ (69,950) $ (59,646)
Net cash provided by (used
in) investing activities $ 61,544 $ (92,112) $ (30,568)
Net cash provided by (used
in) financing activities $ (275,293) $ 2,165 $ (273,128)

-----------------------------------------

----------------------------------------------------------------------

-----------------------------------------
THREE MONTHS ENDED
-----------------------------------------
April 1, 2007
-----------------------------------------
Semiconductor SunPower Consolidated
------------- ------------- -------------
Selected Cash Flow Data
(Preliminary):
----------------------------
Net cash provided by (used
in) operating activities $ (8,569) $ (9,766) $ (18,335)
Net cash provided by (used
in) investing activities $ 93,616 $ (138,774) $ (45,158)
Net cash provided by (used
in) financing activities $ (163,561) $ 192,406 $ 28,845

-----------------------------------------

(a) Consolidated balances do not include $75.0 million and $67.8
million of auction rate securities, which were classified as long-
term investments in "Other assets" as of March 30, 2008 and December
30, 2007, respectively.
(b) Convertible debt was long-term as of December 30, 2008 and short-
term as of December 30, 2007.
*T

-0-
*T

CYPRESS SEMICONDUCTOR CORPORATION
SUPPLEMENTAL FINANCIAL DATA
(In thousands, except per-share data)
(Unaudited)

During the first quarter of fiscal 2008, Cypress converted certain
Asian distributors to a deferred revenue recognition model. The
following table presents the impact of this conversion on Cypress'
reported results of operations:

------------------------
THREE MONTHS ENDED
------------------------
March 30, 2008
------------------------
GAAP Non-GAAP
------------ -----------

Revenues $ 442,083 $ 442,083
Impact of distributor conversion 20,802 20,802
------------ -----------
Revenues without the conversion $ 462,885 $ 462,885
============ ===========

Gross margin $ 136,868 $ 151,078
Impact of distributor conversion 12,052 12,052
------------ -----------
Gross margin without the conversion $ 148,920 $ 163,130
============ ===========

Net income (loss) $ (18,362) $ 19,948
Impact of distributor conversion 10,847 10,847
------------ -----------
Net income (loss) without the conversion $ (7,515) $ 30,795
============ ===========

Diluted net income (loss) per share $ (0.12) $ 0.115
Impact of distributor conversion 0.07 0.066
------------ -----------
Diluted net income (loss) per share without
the conversion $ (0.05) $ 0.181
============ ===========
*T

-0-
*T

Notes to Non-GAAP Financial Measures

To supplement its consolidated financial results presented in
accordance with GAAP, Cypress uses non-GAAP financial measures which
are adjusted from the most directly comparable GAAP financial
measures to exclude certain items, as described in details below.
Management believes that these non-GAAP financial measures reflect an
additional and useful way of viewing aspects of Cypress's operations
that, when viewed in conjunction with Cypress's GAAP results, provide
a more comprehensive understanding of the various factors and trends
affecting Cypress's business and operations. Non-GAAP financial
measures used by Cypress include:

-- Gross margin;

-- Research and development expenses;

-- Selling, general and administrative expenses;

-- Operating income (loss);

-- Net income (loss); and

-- Diluted net income (loss) per share.

Cypress uses each of these non-GAAP financial measures for internal
managerial purposes, when providing its financial results and
business outlook to the public, and to facilitate period-to-period
comparisons. Management believes that these non-GAAP measures provide
meaningful supplemental information regarding Cypress's operational
and financial performance of current and historical results.
Management uses these non-GAAP measures for strategic and business
decision making, internal budgeting, forecasting and resource
allocation processes. In addition, these non-GAAP financial measures
facilitate management's internal comparisons to Cypress's historical
operating results and comparisons to competitors' operating results.

Cypress believes that providing these non-GAAP financial measures, in
addition to the GAAP financial results, are useful to investors
because they allow investors to see Cypress's results "through the
eyes" of management as these non-GAAP financial measures reflect
Cypress's internal measurement processes. Management believes that
these non-GAAP financial measures enable investors to better assess
changes in each key element of Cypress's operating results across
different reporting periods on a consistent basis. Thus, management
believes that each of these non-GAAP financial measures provides
investors with another method for assessing Cypress's operating
results in a manner that is focused on the performance of its ongoing
operations.

Cypress presents each non-GAAP financial measure, including the
diluted net income (loss) per share, for the following categories:
"Semiconductor," "SunPower," and "Consolidated." SunPower is a
majority-owned subsidiary of Cypress and for accounting purposes,
Cypress is required to consolidate SunPower's results. Cypress
includes two distinct businesses: Semiconductor and SunPower.
Semiconductor is Cypress's traditional core semiconductor business.
On the other hand, SunPower is a stand-alone, publicly-traded company
specializing in solar power products.

Cypress's investment community often views Cypress as two separate
entities: Cypress and SunPower, and many Cypress investors have
focused on the possibility of a future separation of SunPower and
Cypress in evaluating an investment in Cypress. Based on feedback
provided by Cypress's investment community to management, these non-
GAAP financial measures divided into "Semiconductor" and "SunPower"
are beneficial as they allow Cypress's investment community to better
understand Cypress's financial performance for the two businesses
separately, assess the various methodologies and information used by
management to evaluate and measure such performance, and construct
their valuation models to better align Cypress's and SunPower's
results and projections with their applicable competitors and
industries.

There are limitations in using non-GAAP financial measures because
they are not prepared in accordance with GAAP and may be different
from non-GAAP financial measures used by other companies. In
addition, non-GAAP financial measures may be limited in value because
they exclude certain items that may have a material impact upon
Cypress's reported financial results. Management compensates for
these limitations by providing investors with reconciliations of the
non-GAAP financial measures to the most directly comparable GAAP
financial measures. The presentation of non-GAAP financial
information is not meant to be considered in isolation or as a
substitute for the most directly comparable GAAP financial measures.
The non-GAAP financial measures supplement, and should be viewed in
conjunction with, GAAP financial measures. Investors should review
the reconciliations of the non-GAAP financial measures to their most
directly comparable GAAP financial measures as provided in the
accompanying press release.

As presented in the "Reconciliation of Non-GAAP Financial Measures to
GAAP Financial Measures" tables in the accompanying press release,
each of the non-GAAP financial measures excludes one or more of the
following items:

-- Stock-based compensation expense.
Stock-based compensation expense relates primarily to the
equity awards such as stock options and restricted stock.
Stock-based compensation is a non-cash expense that varies
in amount from period to period and is dependent on market
forces that are often beyond Cypress's control. As a
result, management excludes this item from Cypress's
internal operating forecasts and models. Management
believes that non-GAAP measures adjusted for stock-based
compensation provide investors with a basis to measure
Cypress's core performance against the performance of other
companies without the variability created by stock-based
compensation as a result of the variety of equity awards
used by companies and the varying methodologies and
subjective assumptions used in determining the non-cash
expense.

-- Impairment of assets.
Cypress wrote off the net book values of certain
manufacturing equipment in the first quarter of fiscal
2008, which (1) resulted from the discontinuation of
certain SunPower's product line or (2) was replaced due to
obsolescence / underperformance. Cypress excluded this item
because the non-cash expense is not reflective of its
ongoing operating results. Excluding this data allows
investors to better compare Cypress's period-over-period
performance without such non-cash expense.

-- Acquisition-related expense.
Acquisition-related expense includes: (1) fair value
adjustment to deferred revenue, which is an adjustment that
results in certain revenues never being recognized under
GAAP by either the acquiring company or the company being
acquired, (2) in-process research and development, which
relates to projects in process as of the acquisition date
that have not reached technological feasibility and are
immediately expensed, (3) amortization of intangibles,
which include acquired intangibles such as purchased
technology, patents and trademarks, and (4) earn-out
compensation expense, which include compensation resulting
from the achievement of milestones established in
accordance with the terms of the acquisitions. In most
cases, these acquisition-related charges are not factored
into management's evaluation of potential acquisitions or
Cypress's performance after completion of acquisitions,
because they are not related to Cypress's core operating
performance. In addition, in all cases, the frequency and
amount of such charges can vary significantly based on the
size and timing of acquisitions and the maturities of the
businesses being acquired. Adjustments of these items
provide investors with a basis to compare Cypress against
the performance of other companies without the variability
caused by purchase accounting.

-- Changes in value of Cypress's key employee deferred
compensation plan.
Cypress sponsors a voluntary deferred compensation plan
which provides certain key employees with the option to
defer the receipt of compensation in order to accumulate
funds for retirement. The amounts are held in a trust and
Cypress does not make contributions to the deferred
compensation plan or guarantee returns on the investment.
Changes in the value of the investment in Cypress's common
stock under the plan are excluded from the non-GAAP
measures. Management believes that such non-cash item is
not related to the ongoing core business and operating
performance of Cypress, as the investment contributions are
made by the employees themselves.

-- Release of allowance for uncollectible employee loans.
The allowance for uncollectible employee loans is related to
outstanding employee loans under Cypress's stock purchase
assistance plan. Management released a portion of the
allowance based on a review of the status of the
outstanding loans. Management excludes this non-cash
benefit from the non-GAAP measures because it does not
relate to Cypress's core business or impact its operating
performance. Adjustment of this item allows investors to
better compare Cypress's period-over-period operating
results.

-- Impairment related to the synthetic lease.
Cypress recognized impairment losses related to its
synthetic lease as it determined the fair value of the
properties under the synthetic lease was less than the
carrying value. This item is excluded from non-GAAP
financial measures because it is a non-cash expense that is
not considered a core operating activity. As such,
management believes that it is appropriate to exclude the
impairment from Cypress's non-GAAP financial measures, as
it enhances the ability of investors to compare Cypress's
period-over-period operating results.

-- Gains on divestitures.
Cypress recognizes gains resulting from the exiting of
certain non-strategic businesses that no longer align with
Cypress's long-term operating plan. Cypress excludes these
items from its non-GAAP financial measures primarily
because it is not reflective of the ongoing operating
performance of Cypress's business and can distort the
period-over-period comparison.

-- Restructuring charges.
Restructuring costs primarily relate to activities engaged
by management to make changes related to its infrastructure
in an effort to reduce costs. Restructuring costs are
excluded from non-GAAP financial measures because they are
not considered core operating activities and such costs
have not historically occurred in each year. Although
Cypress has engaged in various restructuring activities in
the past, each has been a discrete event based on a unique
set of business objectives. Cypress does not engage in
restructuring activities on a regular basis. As such,
management believes that it is appropriate to exclude
restructuring charges from Cypress's non-GAAP financial
measures, as it enhances the ability of investors to
compare Cypress's period-over-period operating results from
continuing operations.

-- Investment-related gains/losses.
Cypress recognizes an impairment loss related to its
investment when it determines the decline in fair value is
other-than-temporary in nature. This item is excluded from
non-GAAP financial measures because it is a non-cash
expense that is not considered a core operating activity,
and such losses have not historically occurred in every
quarter. In addition, investment-related gains/losses
include gains/losses related to the sales of its debt and
equity investments and gains/losses related to certain
derivative instruments. Management believes that such
gains/losses are not related to the ongoing business and
operating performance of Cypress. As such, management
believes that it is appropriate to exclude investment-
related gains/losses from Cypress's non-GAAP financial
measures, as it enhances the ability of investors to
compare Cypress's period-over-period operating results.

-- Write-off of unamortized bond issuance costs.
During the fourth quarter of fiscal 2007, the market price
trigger test was met for our convertible debt, giving the
holders of the convertible debt the rights to convert. As a
result, we accelerated the amortization of our remaining
bond issuance costs in the fourth quarter of fiscal 2007
and first quarter of fiscal 2008. In addition, during the
first quarter of fiscal 2007, we redeemed our 1.25%
convertible notes and wrote off the unamortized bond
issuance costs. These costs are excluded from the non-GAAP
financial measures because such non-cash expenses have not
historically occurred in every quarter, which would affect
the ability of investors to compare Cypress's period-over-
period operating results. In addition, management does not
believe that this item is indicative of the ongoing
operating performance of Cypress's business.

-- Related minority interest adjustment and tax effect.
Cypress adjusts for the minority interest impact and the
income tax effect resulting from the non-GAAP adjustments
as described above.
*T

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

Copyright Business Wire 2008