Making chips for the blue-chips
Cypress has long been a leader in the chip making business. It manufactures a wide range of products including SRAM (static RAM used in cellular phones, networks, and computers), memory and data communications chips, timing devices, and PC chips. Its customers are major computer, networking, and telecom companies, including AT&T, IBM, and Motorola. About 10 percent of the company's revenues comes from military contracts.
A loving, just, and merciful CEO?
T. J. Rodgers, Cypress Semiconductor's CEO, thrives on media attention. His memo paper is reportedly distinguished by the header: "From the Desk of God." He has publicly spoken out against corporate welfare and politically correct hiring policies - though he is one of the biggest proponents of a raise in the annual quota for visas enabling foreign engineers to work for American high-tech companies.
Holding on at all costs
Cypress went through some rough times in 1998, leading industry observers to suggest Rodgers should spend less time on the soapbox and return to the hands-on management style that initially made his company a success. Like everyone else in the semiconductor business, the company had suffered as a result of falling chip prices and a saturation of the market. Rodgers refused to quit the SRAM business, despite the fact that Cypress's stock prices had fallen steadily during the preceeding two years. In March 1998, the company went through a reorganization, laying off 100 workers in Texas, consolidating operations in its Minnesota plants, and closing its test facility in Thailand.
Rising out of recession
Cypress switched tactics in 1999, acquiring diverse chip makers (and entering new markets) even as the memory chip industry began to pick up. In January it acquired IC Works, a maker of timing chips, and in May picked up USB-chip maker Anchor Chips for $15 million in cash. The strategy worked well, as Cypress posted the ninth-highest stock price percentage gain (278.95 percent) for the year ending January 20, 2000.
Mergers, Agreements, and Acquisitions
Cypress has gone through a flurry of negotiations, and the end result is a company that is ready to take on several markets. The company is financing Silicon Light Machines, and is also its supplier of wafer processing technology. Rodgers is preparing for the day that digital motion pictures take over our theaters, and is predicting that Silicon Light Machines will be handling the pixels. In January 2000 Cypress purcahsed Galvantech, Inc., an acquisition intended to speed up new product development. May 2000 saw the announcement of a guaranteed wafer supply agreement with QuickLogic Corporation, ensuring that Cypress will be provided with superior technology through 2005. Next came yet another acquisition, this time of a small radio frequency design firm. Cypress is now outfitted with key intellectual property necessary for penetration of the cellular phone market. This company intends to take stake a major claim in the lucrative cell phone market, and has the pieces in place to do so.
