STOCKREPORTS		 Cypress Semiconductor Corporation NYSE Symbol CY
In S&P MidCap 400
19-JUL-97 Industry:
Electronics (Semiconductors)		 Summary: This company manufactures a broad line of high-performance integrated circuits.

Recent Price 14.88
52 Wk Range 15.81 - 10.38		 Yield Nil
12-Mo. P/E NM

Quantitative Evaluation:
Outlook (1 Lowest - 5 Highest)
3-
Fair Value
16.20
Risk
MEDIUM
Earn/Div Rank
B
Technical Evaluation:
BEARISH since 12/96
Rel. Strength Rank (1 Lowest - 99 Highest)
40
Insider Activity
Neutral

Overview 01-MAY-97

Revenues should increase by 5% to 10% in 1997. With the recent inventory correction in the semiconductor industry completed, sequential revenue gains should continue for the remainder of the year, and comparisons in the second half of the year will not be difficult. Sales should rise through all product divisions. In addition, revenue growth will be aided by the favorable market reception that has been given to new products. Gross margins will decline, as average selling prices (ASPs), although stabilizing, remain well below the levels of a year ago. However, gross margins will improve sequentially on the higher volume. The increased sales will enable CY to leverage operating expenses, which will lift results. Overall, we look for the company to earn $0.45 a share in 1996, down from 1996's $0.63. Results for 1996 include a charge of $0.07 a share in the third quarter.

Valuation 01-MAY-97

The shares are likely to remain only market performers in coming periods, despite their sharp decline from highs established in the summer of 1995. Although long-term semiconductor fundamentals remain strong, and investor sentiment has improved, it is doubtful that the shares will have a significant rally in the near future. While we believe results will show moderate improvement going forward, it will be at least another two years before EPS reach 1995 levels. Furthermore, we consider the generous P/E multiple accorded the company's peak earnings in 1995 to be an aberration, and we don't expect the shares to be given such a generous valuation in the future. Therefore, we are advising investors not to add to their positions at this time.

Key Stock Statistics

S&P EPS Est. 1997 0.40
P/E on S&P Est. 1997 37.2
S&P EPS Est. 1998 0.80
Dividend Rate/Share Nil
Shs. outstg. (M) 88.4
Avg. daily vol. (M) 1.145
Tang. Bk. Value/Share 6.82
Beta 1.28
Shareholders 2,700
Market cap. (B) $ 1.3
Inst. holdings 35%
Value of $10,000 invested 5 years ago:$ 18,466

Fiscal Year Ending Dec. 31

Revenue (Million $)
1997 1996 1995 1994 1993 1992
Q1 126.0 170.2 123.4 90.96 69.70 73.80
Q2 138.1 135.5 134.3 100.2 74.75 65.80
Q3 NA 109.7 161.1 104.0 77.04 65.30
Q4 NA 113.1 177.3 111.2 83.01 67.40
Year NA 528.4 596.1 406.4 304.5 272.2

Earning Per Share ($)
1997 1996 1995 1994 1993 1992
Q1 0.06 0.41 0.10 0.12 0.03 0.05
Q2 0.07 0.20 0.29 0.15 0.05 -0.02
Q3 E0.11 0.01 0.35 0.17 0.08 0.00
Q4 E0.16 0.02 0.40 0.19 -0.06 -0.33
Year E0.40 0.63 1.15 0.61 0.10 -0.28

Dividend Data: No cash dividends have been paid. A two-for-one stock split was effected in October 1995.

Business Summary 01-MAY-97

Cypress Semiconductor (CY) designs, develops and manufactures high-performance integrated circuits for a range of markets, including computers, telecommunications, instrumentation and military systems. The company is led by its forceful CEO T. J. Rodgers, who is not afraid to speak his mind on issues which he feels are important to CY and the semiconductor industry.

CY's strategy is to bring its products to market quickly and at reduced costs to gain market acceptance. CY does not seek to increase its market share to very high levels in any particular product area, but seeks instead to offer products in a broad range of categories and to introduce new products in new markets.

CY operates through four divisions: static memory, programmable products, data communications, and computation products.

The static memory division produces static random access memory products (SRAMs) and multichip modules. SRAMs are used for storage and retrieval of data in computers and other electronic systems. Multichip modules combine multiple chips into high-performance standard and custom memory subsystems.

The programmable products division makes EPROMs (Erasable Programmable Read-Only Memories), PLDs (Programmable Logic Devices), field programmable gate arrays (FPGAs) and FCT (Fast CMOS Technology) Logic Devices. EPROMs are used in computers and telecommunications systems to store fixed data that is not altered during machine operation. PLDs perform non-memory functions, such as floating-point mathematics. FCT Logic Devices are used for implementing bus interface and standard logic functions in high-speed systems.

The data communications division produces a range of products from the physical connection layer to system-level solutions.

The computation products division manufactures timing technology devices used in personal computers, including programmable clock oscillators, clock synthesizers and programmable metal can oscillators. This division also provides PC-compatible systems logic through a recent acquisition. The company's goal is to provide all the silicon on a PC motherboard, except the CPU and DRAM.

The company's recent financial results have been hurt by price weakness for its SRAM products. CY is seeking to diversify its product line to become less dependent on SRAMs, and recently introduced a general purpose microcontroller serving the Universal Serial Bus (UBS) peripherals market, which is less prone to commodity pricing pressures.

Capitalization

Long Term Debt: $3,706,000 (3/97).

Per Share Data ($)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Tangible Bk. Val. 6.30 5.79 4.54 3.76 3.64 3.95 3.39 2.97 2.54 2.24
Cash Flow 1.80 1.87 1.16 0.60 0.36 0.89 0.84 0.72 0.50 0.31
Earnings 0.63 1.15 0.62 0.10 -0.28 0.43 0.43 0.40 0.28 0.16
Dividends Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
Payout Ratio Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
Prices - High 16 5/8 27 3/4 12 1/8 8 3/8 9 1/4 12 1/4 7 7/8 7 1/4 6 1/4 8 1/8
- Low 9 1/8 10 3/4 6 5/8 4 3/8 3 3/4 5 1/2 4 1/8 4 5/8 3 3/4 3
P/E Ratio - High 26 24 20 80 NM 29 18 18 22 51
- Low 14 9 11 41 NM 13 9 12 13 19

Income Statement Analysis (Million $)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Revs. 528 596 406 305 272 287 225 199 139 77.0
Oper. Inc. 172 242 123 66.1 51.7 82.3 72.8 65.0 43.2 23.9
Depr. 97.6 65.0 45.0 37.5 47.6 37.6 30.5 24.5 16.1 10.7
Int. Exp. 6.9 6.2 4.0 0.3 0.4 1.0 1.1 1.8 2.2 2.5
Pretax Inc. 8.4 161 80.1 12.6 -32.9 51.8 50.3 46.6 32.0 17.4
Eff. Tax Rate 37% 37% 37% 36% NM 34% 34% 34% 35% 34%
Net Inc. 53.0 103 50.5 8.0 -21.0 34.2 33.2 30.7 20.8 11.5

Balance Sheet & Other Fin. Data (Million $)
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Cash 93.8 162 193 81.0 82.0 104 92.0 97.0 89.0 108
Curr. Assets 281 352 317 186 184 212 192 179 150 144
Total Assets 794 751 556 341 321 375 309 286 245 216
Curr. Liab. 155 161 91.2 61.2 50.0 61.6 52.8 50.3 39.4 31.2
LT Debt 98.2 95.9 93.7 Nil 1.6 3.3 5.4 9.3 14.3 19.2
Common Eqty. 510 472 353 272 262 299 242 219 185 163
Total Cap. 630 590 461 279 271 313 257 235 205 185
Cap. Exp. 195 195 112 60.1 31.9 79.5 36.6 32.9 39.9 25.3
Cash Flow 151 167 95.5 45.6 26.6 71.7 63.8 55.2 36.9 22.3

Curr. Ratio 1.8 2.2 3.5 3.0 3.7 3.4 3.6 3.6 3.8 4.6
% LT Debt of Cap. 15.6 16.3 20.3 Nil 0.6 1.1 2.1 3.9 6.9 10.4
% Net Inc.of Revs. 10.0 17.2 12.4 2.6 NM 11.9 14.8 15.4 14.9 14.9
% Ret. on Assets 6.9 15.7 11.0 2.4 NM 9.7 11.3 11.5 9.0 6.0
% Ret. on Equity 10.8 24.8 15.6 3.0 NM 12.3 14.6 15.1 11.9 8.1

Data as orig. reptd.; bef. results of disc. opers. and/or spec. items. Per share data adj. for stk. divs. as of ex-div. date. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked.

Office--3901 N. First St., San Jose, CA 95134-1599. Tel--(408) 943-2600. Website--http://www.cypress.com Pres & CEO--T. J. Rodgers. CFO, Secy & Investor Contact--Emmanuel Hernandez. Dirs--P. R. Lamond (Chrmn), E. Benhamou, F. B. Bialek, J. C. Lewis, T. J. Rodgers. Transfer Agent & Registrar--First National Bank of Boston. Incorporated--in California in 1982; reincorporated in Delaware in 1987. Empl-- 2,171. S&P Analyst: Stephen T. Madonna, CFA


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