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Cypress Reports First-Quarter 2015 Results

SAN JOSE, CA -- (Marketwired) -- Apr 30, 2015 -- Cypress Semiconductor Corp. (NASDAQ: CY) today announced its first-quarter 2015 results, which included the remarks below from its president and CEO, T.J. Rodgers. Highlights for the quarter included:

Fellow shareholders:

Our revenue and earnings for the quarter are given below, compared with those of the prior quarter and prior year:

(In thousands, except per-share data)

                       NON-GAAP*                         GAAP               
              Q1 2015    Q4 2014   Q1 2014   Q1 2015     Q4 2014   Q1 2014  
             --------   --------  --------  ---------   --------  --------  
Revenue      $209,137   $184,097  $170,283   $209,137   $184,097  $170,283  
                                                                            
Gross margin     (1.3%)     52.4%     50.3%     (19.9%)     50.9%     45.6% 
                                                                            
Pretax margin   (42.0%)     12.6%      7.3%    (120.2%)      2.7%     (7.5%)
Net income                                                                  
 (loss)      $(87,857)   $22,056   $11,975  $(229,788)    $3,503   $(7,934) 
                                                                            
Diluted EPS                                                                 
 (loss)        $(0.45)     $0.13     $0.07     $(1.17)     $0.02    $(0.05) 

* For a reconciliation of GAAP to non-GAAP results, see accompanying tables "Reconciliation of U.S. GAAP to Non-GAAP Financial Measures."

We are pleased to have closed our merger with Spansion earlier than expected, and we are encouraged by the strategic opportunities ahead of us. Our post-merger company, which we internally refer to as New Cypress, is the No. 1 provider of SRAMs and the No. 1 provider of NOR Flash memories. This has helped to position us as the No. 3 provider of automotive MCUs and memories with $500 million in revenue and preferred supplier status to the Top 25 global automotive manufacturers. We are making excellent progress on integration -- for example, we have completed more than half of the headcount reductions we planned for the year and we have already achieved $8.4 million in annualized synergies in the first quarter.

We remain committed to expanding gross and operating margins as the embedded memory leader and through our continued focus on automotive and industrial markets.

BUSINESS REVIEW

+ Our consolidated non-GAAP financials include 18 days of Spansion results due to the merger closing on March 12, 2015. On a standalone basis, Cypress's first-quarter non-GAAP results would have been 50.8% gross margin (53.1% excluding the Emerging Technologies Division) and $0.10 earnings per share.

+ Net inventory at the end of the first quarter was $389.0 million, up 341% from the fourth quarter. The increase is primarily related to inventories acquired from Spansion, which totaled approximately $305 million, including the fair value adjustment mandated by purchase accounting.

+ Cypress announced that its Board of Directors approved a quarterly cash dividend of $0.11 per share, payable to holders of record of the company's common stock as of the close of business on March 26, 2015. This dividend was paid on April 16, 2015.

                              NET SALES SUMMARY                             
                     (In thousands, except percentages)                     
                                 (Unaudited)                                
                                                                            
                        THREE MONTHS ENDED                                  
                ---------------------------------                           
                                                                   Year-    
                                                                   over-    
                 Mar. 29,    Dec. 28,    Mar. 30,  Sequential      Year     
 Business Unit     2015        2014        2014      Change       Change    
--------------- ---------  -----------  ---------  ----------   ----------  
PSD(1)            $56,717      $70,433    $69,347         (19%)        (18%)
MPD(1)            $91,533      $88,803    $81,323           3%          13% 
DCD(1)            $18,565      $17,709    $15,590           5%          19% 
ETD(2)             $7,077       $7,152     $4,023          (1%)         76% 
Legacy                                                                      
 Spansion(3)      $35,245            -          -           -            -  
                ---------  -----------  ---------  ----------   ----------  
Total            $209,137     $184,097   $170,283          14%          23% 
                ---------  -----------  ---------  ----------   ----------  
                                                                            
Geographic                                                                  
---------------                                                             
China and ROW          49%          60%        62%        (18%)        (21%)
Americas               19%          16%        15%         19%          27% 
Europe                 16%          14%        14%         14%          14% 
Japan                  16%          10%         9%         60%          78% 
                ---------  -----------  ---------  ----------   ----------  
Total                 100%         100%       100%          0%           0% 
                ---------  -----------  ---------  ----------   ----------  
                                                                            
Channel                                                                     
---------------                                                             
Distribution           74%          71%        68%          4%           9% 
Direct                 26%          29%        32%        (10%)        (19%)
                ---------  -----------  ---------  ----------   ----------  
Total                 100%         100%       100%          0%           0% 
                ---------  -----------  ---------  ----------   ----------  
                                                                            

(1) PSD, Programmable Systems Division; DCD, Data Communications Division; MPD, Memory Products Division.

(2) ETD, Emerging Technologies Division includes businesses outside our core semiconductor businesses outlined in Footnote 1. Includes subsidiaries AgigA Tech Inc., Deca Technologies Inc., and our foundry business unit.

(3) Our net sales includes the results of legacy Spansion operations for March 12, 2015 through March 29, 2015.

FIRST-QUARTER 2015 HIGHLIGHTS

+ Cypress and Spansion closed their merger in an all-stock, tax-free transaction valued at approximately $5 billion. In a special meeting, Cypress shareholders approved the issuance of 2.457 shares of Cypress stock to Spansion shareholders for each Spansion share they owned. The merger is expected to achieve more than $135 million in cost synergies on an annualized basis within three years and to be accretive to non-GAAP earnings within the first full year after the transaction closes. The combined company plans to continue to pay $0.11 per share in quarterly dividends, considerably enhancing shareholder returns.

+ Cypress expanded its Traveo™ microcontroller family with a cost-effective line of MCUs that enables 2-D and 3-D graphics in the dashboards, heads-up displays and HVAC systems of compact cars. The new family builds on the Traveo MCU family that Spansion announced in the fourth quarter of 2014 for midsize cars. Traveo enables the first 3-D-capable ARM® Cortex®-R5 MCU automotive cluster (dashboard) displays.

+ Cypress introduced a fingerprint reader solution designed to bring reliable, easy-to-use authentication to smartphones, tablets, wearables and other mobile devices. The TrueTouch® Fingerprint Reader provides access to one of the fastest-growing markets in semiconductors.

+ Cypress introduced the PSoC® 4 M-Series, designed to upgrade designs with legacy 8- and 16-bit applications with the 32-bit ARM-Cortex-M0 core. The PSoC 4 M-Series brings the design flexibility of the PSoC architecture to a wide range of sensor-based systems in home appliance, automotive and system management control applications.

+ Spansion expanded its portfolio of human-machine interface ICs for industrial, consumer and home appliance applications with two new ARM Cortex-M4-based microcontrollers. The new products enable the integration of advanced graphics, video and voice-command capabilities in the consumer and Internet of Things (IoT) markets.

+ Cypress and Arrow Electronics announced a design contest that challenges engineers to design solutions for the IoT using Cypress's PSoC 4 Bluetooth® Low Energy (BLE) solution, the industry's most-integrated programmable one-chip solution.

+ Kyocera selected Cypress's TrueTouch TMA445 capacitive touchscreen controller for its ruggedized DuraForce smartphone. The Cypress-enabled, 4.5-inch touchscreen display allows users to make calls, check messages, send email and take pictures even if they are wearing thick gloves or the screen is wet.

+ The premium Chinese smartphone brand, vivo, selected Cypress's TrueTouch TMA545 capacitive touchscreen controller for its next-generation vivo Y29 smartphone. TrueTouch allows users to "wake up" their phone from sleep mode by drawing a letter on the screen with their finger.

+ Cypress sampled the industry's first programmable USB Type-C port controller solution: EZ-PD™ CCG1. The new super-slim 2.4-mm USB Type-C connector standard -- which transmits multiple data protocols and delivers up to 100 W of power -- is the sole data and power connector on the newest Apple® MacBook® computer.

+ Cypress also sampled its second-generation USB Type-C controller solution. Available in a Wafer Level Chip Scale Package, the EZ-PD CCG2 controller is optimized for Type-C cable connectors. In order to transmit and receive USB, DisplayPort and HDMI protocols, along with power, every Type-C cable must have an embedded Type-C chip, which greatly expands the USB market.

+ Cypress introduced the small-form-factor, fully certified EZ-BLE™ PRoC™ module, which significantly accelerates time-to-market for Bluetooth Smart products such as remote controls, toys, health and fitness equipment and home appliances. The new Bluetooth Low Energy (BLE) standard has become the overwhelming choice for short-range, wireless connectivity. Customers prefer integrated BLE modules because they reduce manufacturing costs and eliminate the need for costly, time-consuming certification by the FCC and equivalent bodies worldwide. Bluetooth Smart device shipments will grow from 165 million in 2014 to 1.2 billion in 2018 for a 64% CAGR, according to market analysis firm IHS.

+ Networking equipment maker Exablaze selected Cypress's QDR®-IV SRAMs for its ExaLINK Fusion networking switch. QDR-IV offers the industry's highest-performance SRAM solutions with a random transaction rate (RTR) of up to 2.132 billion transactions per second. RTR, the number of fully random memory accesses per second, is the critical memory performance metric for increased line card and switching rates.

+ Ikegami Tsushinki Corp., the world's leading manufacturer of advanced HD cameras and production equipment, selected Cypress's high-density First-In, First-Out (FIFO) memory for its 3G-ready fiber transmission camera control unit and base station.

+ Spansion launched its HyperRAM™ memory, the industry's first Pseudo SRAM (PSRAM) device with HyperBus™ -- a simple 12-pin interface for fast, random and continuous read throughput up to 333 megabytes per second (MBps). HyperBus devices enable external RAM expansion, fast boot times and high-resolution graphics displays for applications such as automotive instrument clusters. HyperRAM joins HyperFlash™, the world's fastest NOR flash memory, in Cypress's growing portfolio of memories supporting the HyperBus standard.

+ Spansion introduced a 512Mb, 1.8-V Serial Peripheral Interface (SPI) NOR flash memory in 65nm MirrorBit® technology with the industry's fastest read time. The new chip targets automotive infotainment systems, telematics, road-tolling systems and wireless base stations. With an 80-MHz Quad DDR (Double Data Rate) SPI interface and 80-MBps bandwidth, the chip is 50% faster than competing high-density 1.8-V SPI NOR flash devices.

+ In February, Spansion announced that it will jointly develop and manufacture 3-D NAND flash memories with XMC, China's fastest-growing 300-mm semiconductor foundry company. The new, post-merger Cypress will combine its innovative charge-trap and 3-D technologies with XMC's high-volume, state-of-the art manufacturing capabilities.

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ABOUT CYPRESS

Cypress (NASDAQ: CY) delivers high-performance, high-quality solutions at the heart of today's most advanced embedded systems, from automotive, industrial and networking platforms to highly interactive consumer and mobile devices. With a broad, differentiated product portfolio that includes NOR flash memories, F-RAM and SRAM, Traveo microcontrollers, the industry's only PSoC programmable system-on-chip solutions, analog and PMIC Power Management ICs, CapSense® capacitive touch-sensing controllers, and Wireless BLE Bluetooth Low-Energy and USB connectivity solutions, Cypress is committed to providing its customers worldwide with consistent innovation, best-in-class support and exceptional system value. To learn more, go to 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 Q2 2015 and the remainder of fiscal year 2015 and beyond are forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. We may 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 expected timing and costs related to the integration of the Company with Spansion as a result of our recent merger; our ability to execute on planned synergies related to the merger with Spansion; our expectations regarding dividends; the semiconductor market; the strength and growth of our proprietary and programmable products; our expectations regarding our revenue growth and earnings leverage; our expectation that our ETD division will significantly contribute to our 2015 revenue growth; as well as our expectations regarding the demand for our products and how our products are expected to perform. 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 to a variety of uncertainties and risk factors, including, but not limited to, the state of and future of the global economy, business conditions and growth trends in the semiconductor market, our ability to effectively integrate our company with Spansion in a timely manner; our ability to attract and retain key personnel; whether our products perform as expected, whether the demand for our proprietary and programmable products is fully realized, our ability to manage our business to have strong earnings and significant revenue growth, reduce operating expenses, our ability to effectively implement third party wafer processes, the strength or softness of the markets we serve, our ability to maintain and improve our gross margins and realize our bookings, the seasonality of the markets we serve, the financial performance of our subsidiaries and Emerging Technologies Division, and other risks described in our filings with the Securities and Exchange Commission. We assume no responsibility to update any such forward-looking statements.

Cypress, the Cypress logo, Spansion, the Spansion logo, and combinations thereof, TrueTouch, PSoC, CapSense and MirrorBit are registered trademarks and EZ-PD, EZ-BLE, PRoC, F-RAM, HyperRAM, HyperBus, HyperFlash and Traveo are trademarks of Cypress Semiconductor Corp. All other trademarks or registered trademarks are the property of their respective owners.

                     CYPRESS SEMICONDUCTOR CORPORATION                      
  RECONCILIATION OF KEY NON-GAAP CONSOLIDATED FINANCIAL METRICS TO LEGACY   
                               CYPRESS METRICS                              
                               (In Thousands)                               
                                (Unaudited)                                 
                                                                            
Reconciliation of key non-GAAP consolidated financial                       
 metrics to Legacy Cypress metrics                                          
                                                                            
                                   Three months ended March 29, 2015        
                            ----------------------------------------------- 
                                             Impact of                      
                                             the merger                     
                                                and                         
                                              Spansion            Legacy    
                             Consolidated    operations          Cypress    
                            -------------  -------------      ------------- 
                                                                            
Revenue                     $     209,137  $    35,245.0      $     173,892 
Non-GAAP gross margin       $      (2,669) $     (91,093) (1) $      88,424 
Non-GAAP gross margin %              -1.3%         -52.1%              50.8%
Non-GAAP net loss           $     (87,857)      (105,277)            17,420 
Non-GAAP diluted earnings                                                   
 per share                  $       (0.45)                    $        0.10 
Shares used in non-GAAP                                                     
 earnings per share                                                         
 calculation                      196,471                           175,130 
                                                                            
(1) Non-GAAP gross margin for Spansion operations included $107 million of  
 one-time, merger-related inventory adjustment.                             
                                                                            
                                                                            
                                                                            
                     CYPRESS SEMICONDUCTOR CORPORATION                      
                   CONDENSED CONSOLIDATED BALANCE SHEETS                    
                               (In thousands)                               
                                (Unaudited)                                 
                                                                            
                                               -------------- --------------
                                                 March 29,     December 28, 
                                                    2015           2014     
                                               -------------- --------------
                                                                            
ASSETS                                                                      
                                                                            
  Cash, cash equivalents and short-term                                     
   investments                                 $     157,167  $     118,812 
  Accounts receivable, net                           192,136         75,984 
  Inventories, net (a)                               389,022         88,227 
  Property, plant and equipment, net                 561,296        237,763 
  Goodwill and other intangible assets, net        2,707,698         99,615 
  Other assets                                       230,189        122,880 
                                               -------------  ------------- 
    Total assets                               $   4,237,508  $     743,281 
                                               =============  ============= 
                                                                            
LIABILITIES AND EQUITY                                                      
                                                                            
  Accounts payable                             $     195,017  $      42,678 
  Deferred margin on sales to distributors           128,464         95,187 
  Income tax liabilities                              60,417         21,494 
  Other liabilities                                  575,495        155,057 
  Long-term revolving credit facility                350,000        227,000 
                                               -------------  ------------- 
    Total liabilities                              1,309,393        541,416 
                                               -------------  ------------- 
  Total Cypress stockholders' equity               2,934,649        207,757 
  Noncontrolling interest                             (6,534)        (5,892)
                                               -------------  ------------- 
    Total equity                                   2,928,115        201,865 
                                               -------------  ------------- 
      Total liabilities and equity             $   4,237,508  $     743,281 
                                               =============- =============-
                                                                            
(a) Net inventories include $1.7 million and $2.0 million of capitalized    
 inventories related to stock compensation expense, as of March 29, 2015    
 and December 28, 2014, respectively.                                       
                                                                            
                                                                            
                                                                            
                                                                            
                     CYPRESS SEMICONDUCTOR CORPORATION                      
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS               
                              ON A GAAP BASIS                               
                   (In thousands, except per-share data)                    
                                (Unaudited)                                 
                                                                            
                               ---------------------------------------------
                                             Three Months Ended             
                               ---------------------------------------------
                                  March 29,     December 28,    March 30,   
                                     2015           2014           2014     
                               --------------  -------------  --------------
                                                                            
Revenues                        $     209,137  $     184,097  $     170,283 
Cost of revenues                      250,839         90,395         92,561 
                               --------------  -------------  --------------
Gross margin                          (41,702)        93,702         77,722 
Operating expenses:                                                         
  Research and development             50,474         39,677         45,330 
  Selling, general and                                                      
   administrative                      51,074         37,746         42,609 
  Acquisition costs and                                                     
   amortization of acquisition-                                             
   related intangibles                 26,833          8,558          1,833 
  Restructuring charges                75,715             72         (1,014)
                               --------------  -------------  --------------
    Total operating expenses,                                               
     net                              204,096         86,053         88,758 
                               --------------  -------------  --------------
Operating income (loss)              (245,798)         7,649        (11,036)
Interest and other income                                                   
 (loss), net                           (5,597)        (2,759)        (1,750)
                               --------------  -------------  --------------
Income (loss) before income                                                 
 taxes                               (251,395)         4,890        (12,786)
Income tax provision (benefit)        (20,965)         1,813         (4,517)
                               --------------  -------------  --------------
Income (loss), net of taxes          (230,430)         3,077         (8,269)
Adjust for net loss                                                         
 attributable to noncontrolling                                             
 interest                                 642            426            335 
                               --------------  -------------  --------------
Net income (loss) attributable                                              
 to Cypress                     $    (229,788) $       3,503  $      (7,934)
                               ==============  =============  ==============
                                                                            
Net income (loss) per share                                                 
 attributable to Cypress:                                                   
  Basic                         $       (1.17) $        0.02  $       (0.05)
  Diluted                       $       (1.17) $        0.02  $       (0.05)
Shares used in net income                                                   
 (loss) per share calculation:                                              
  Basic                               196,471        161,864        154,572 
  Diluted                             196,471        169,148        154,572 
                               ---------------------------------------------
                                                                            
                                                                            
                                                                            
                     CYPRESS SEMICONDUCTOR CORPORATION                      
  RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES  
                                     (a)                                    
                   (In thousands, except per-share data)                    
                                (Unaudited)                                 
                                                                            
                   ---------------------------------------------------------
                                      Three Months Ended                    
                   ---------------------------------------------------------
                                       December             March           
                   March 29,    % of      28,      % of      30,      % of  
                      2015    Revenue    2014    Revenue    2014    Revenue 
                   ---------  -------  --------  -------  --------  ------- 
                                                                            
GAAP gross margin                                                           
 (loss)            $ (41,702)   -19.9% $ 93,702     50.9% $ 77,722     45.6%
  Stock-based                                                               
   compensation                                                             
   expense             4,219      2.0%    2,759      1.5%    2,251      1.3%
  Ramtron                                                                   
   acquisition                                                              
   costs and                                                                
   related                                                                  
   amortization            -      0.0%       22      0.0%    2,967      1.7%
  Changes in value                                                          
   of deferred                                                              
   compensation                                                             
   plan                  189      0.1%      (44)     0.0%      218      0.1%
  Impairment of                                                             
   assets,                                                                  
   restructuring                                                            
   and other             120      0.1%        -      0.0%    2,564      1.5%
  Impact of                                                                 
   purchase                                                                 
   accounting         34,505     16.5%        -        -         -        - 
                   ---------  -------  --------  -------  --------  ------- 
Non-GAAP gross                                                              
 margin (loss)     $  (2,669)    -1.3% $ 96,439     52.4% $ 85,722     50.3%
                   =========  =======  ========  =======  ========  ======= 
                                                                            
GAAP research and                                                           
 development                                                                
 expenses          $  50,474           $ 39,677           $ 45,330          
  Stock-based                                                               
   compensation                                                             
   expense            (5,750)            (2,553)            (7,183)         
  Ramtron                                                                   
   acquisition                                                              
   costs and                                                                
   related                                                                  
   amortization            -                  -                  -          
  Changes in value                                                          
   of deferred                                                              
   compensation                                                             
   plan                 (617)               128               (424)         
  Impairment of                                                             
   assets,                                                                  
   restructuring                                                            
   and other             (62)              (252)                 -          
  Impact of                                                                 
   purchase                                                                 
   accounting           (130)                 -                  -          
                   ---------  -------  --------  -------  --------  ------- 
Non-GAAP research                                                           
 and development                                                            
 expenses          $  43,915           $ 37,000           $ 37,723          
                   =========  =======  ========  =======  ========  ======= 
                                                                            
GAAP selling,                                                               
 general and                                                                
 administrative                                                             
 expenses          $  51,074           $ 46,376           $ 42,609          
  Stock-based                                                               
   compensation                                                             
   expense            (8,827)            (1,436)            (7,388)         
  Ramtron                                                                   
   acquisition                                                              
   costs and                                                                
   related                                                                  
   amortization            -             (8,602)              (473)         
  Changes in value                                                          
   of deferred                                                              
   compensation                                                             
   plan               (1,110)               229               (964)         
  Impairment of                                                             
   assets,                                                                  
   restructuring                                                            
   and other               -                (72)                 -          
  Legal and other       (654)            (1,330)                 -          
  Impact of                                                                 
   purchase                                                                 
   accounting           (103)                 -                  -          
                   ---------  -------  --------  -------  --------  ------- 
Non-GAAP selling,                                                           
 general and                                                                
 administrative                                                             
 expenses          $  40,380           $ 35,165           $ 33,784          
                   =========  =======  ========  =======  ========  ======= 
                                                                            
GAAP operating                                                              
 income (loss)     $(245,798)          $  7,649           $(11,036)         
  Stock-based                                                               
   compensation                                                             
   expense            18,796              6,748             16,822          
  Ramtron                                                                   
   acquisition                                                              
   costs and                                                                
   related                                                                  
   amortization        1,305              8,622              5,274          
  Changes in value                                                          
   of deferred                                                              
   compensation                                                             
   plan                1,916               (402)             1,606          
  Impairment of                                                             
   assets,                                                                  
   restructuring                                                            
   and other             182                328              1,550          
  Legal and other        654              1,330                  -          
  Spansion merger                                                           
   related and                                                              
   other items        95,202                  -        -         -        - 
  Impact of                                                                 
   purchase                                                                 
   accounting         40,780                  -        -         -        - 
                   ---------  -------  --------  -------  --------  ------- 
Non-GAAP operating                                                          
 income (loss)     $ (86,963)          $ 24,275           $ 14,216          
                   =========  =======  ========  =======  ========  ======= 
                                                                            
                                                                            
GAAP pretax profit                                                          
 (loss)             (251,395)  -120.2%    4,890      2.7%  (12,786)    -7.5%
  Stock-based                                                               
   compensation                                                             
   expense            18,796      9.0%    6,748      3.7%   16,822      9.9%
  Ramtron                                                                   
   acquisition                                                              
   costs and                                                                
   related                                                                  
   amortization        1,305      0.6%    8,622      4.7%    5,274      3.1%
  Changes in value                                                          
   of deferred                                                              
   compensation                                                             
   plan                1,242      0.6%   (1,048)    -0.6%      747      0.4%
  Impairment of                                                             
   assets,                                                                  
   restructuring                                                            
   and other             455      0.2%      327      0.2%    1,550      0.9%
  Legal and other        654      0.3%    1,330      0.7%        -      0.0%
  Investment                                                                
   related losses                                                           
   (gains)             2,728      1.3%    1,495      0.8%      (30)     0.0%
  Tax related and                                                           
   other items           869      0.4%     (618)    -0.3%        -      0.0%
  Losses from                                                               
   equity method                                                            
   investment          1,559      0.7%    1,403      0.8%      913      0.5%
  Spansion merger                                                           
   related and                                                              
   other items        95,202     45.5%        -      0.0%        -      0.0%
  Impact of                                                                 
   purchase                                                                 
   accounting         40,780     19.5%        -        -         -        - 
                   ---------  -------  --------  -------  --------  ------- 
Non-GAAP pretax                                                             
 profit (loss)     $ (87,805)   -42.0% $ 23,149     12.6% $ 12,490          
                   =========  =======  ========  =======  ========  ======= 
                                                                            
GAAP net income                                                             
 (loss)                                                                     
 attributable to                                                            
 Cypress           $(229,787)          $  3,503           $ (7,934)         
  Stock-based                                                               
   compensation                                                             
   expense            18,796              6,748             16,822          
  Ramtron                                                                   
   acquisition                                                              
   costs and                                                                
   related                                                                  
   amortization        1,305              8,622              5,274          
  Changes in value                                                          
   of deferred                                                              
   compensation                                                             
   plan                1,242             (1,048)               747          
  Impairment of                                                             
   assets,                                                                  
   restructuring                                                            
   and other             455                327              1,550          
  Legal and other        654              1,330                  -          
  Investment                                                                
   related losses                                                           
   (gains)             2,728              1,495                (30)         
  Tax related and                                                           
   other items       (20,791)              (324)            (5,367)         
  Losses from                                                               
   equity method                                                            
   investment          1,559              1,403                913          
  Spansion merger                                                           
   related and                                                              
   other items        95,202                  -                  -          
  Impact of                                                                 
   purchase                                                                 
   accounting         40,780                  -                  -          
                   ---------  -------  --------  -------  --------  ------- 
Non-GAAP net                                                                
 income (loss)                                                              
 attributable to                                                            
 Cypress           $ (87,857)          $ 22,056           $ 11,975          
                   =========  =======  ========  =======  ========  ======= 
                                                                            
GAAP net income                                                             
 (loss) per share                                                           
 attributable to                                                            
 Cypress - diluted $   (1.17)          $   0.02           $  (0.05)         
  Stock-based                                                               
   compensation                                                             
   expense              0.10               0.04               0.10          
  Ramtron                                                                   
   acquisition                                                              
   costs and                                                                
   related                                                                  
   amortization         0.01               0.05               0.03          
  Changes in value                                                          
   of deferred                                                              
   compensation                                                             
   plan                 0.01              (0.01)              0.00          
  Impairment of                                                             
   assets,                                                                  
   restructuring                                                            
   and other               -                  -               0.01          
  Legal and other       0.00               0.01                  -          
  Investment                                                                
   related losses                                                           
   (gains)              0.01               0.01              (0.00)         
  Tax related and                                                           
   other items         (0.11)                 -              (0.03)         
  Losses from                                                               
   equity method                                                            
   investment           0.01               0.01               0.01          
  Spansion merger                                                           
   related and                                                              
   other items          0.48                  -                  -          
  Impact of                                                                 
   purchase                                                                 
   accounting           0.21                  -                  -          
                   ---------  -------  --------  -------  --------  ------- 
Non-GAAP net                                                                
 income (loss) per                                                          
 share                                                                      
 attributable to                                                            
 Cypress - diluted $   (0.45)          $   0.13           $   0.07          
                   ---------------------------------------------------------
                                                                            
                                                                            
(a) Refer to the accompanying "Notes to Non-GAAP Financial Measures" for a  
 detailed discussion of management's use of non-GAAP financial measures.    
                                                                            
                                                                            
                                                                            
                     CYPRESS SEMICONDUCTOR CORPORATION                     
                        SUPPLEMENTAL FINANCIAL DATA                        
                              (In thousands)                               
                                (Unaudited)                                
                                                                           
                               --------------------------------------------
                                            Three Months Ended             
                               --------------------------------------------
                                 March 29,     December 28,    March 30,   
                                    2015           2014           2014     
                               -------------  -------------  --------------
Selected Cash Flow Data                                                    
 (Preliminary):                                                            
------------------------------                                             
  Net cash provided by                                                     
   operating activities        $      12,295  $      25,514  $      25,191 
  Net cash provided (used) by                                              
   investing activities        $    (110,663) $     (13,736) $       2,063 
  Net cash used in financing                                               
   activities                  $     142,216  $     (13,126) $      (9,619)
                                                                           
Other Supplemental Data                                                    
 (Preliminary):                                                            
------------------------------                                             
  Capital expenditures         $       6,496  $       3,769  $       5,599 
  Depreciation                 $      13,902  $      10,013  $       9,485 
  Payment of dividend          $      17,931  $      17,728  $      16,850 
  Dividend paid per share      $        0.11  $        0.11  $        0.11 
  Dividend yield per share (a)           3.1%           3.0%           4.4%
                               --------------------------------------------
                                                                           
(a) Dividend yield per share is calculated based on annualized dividend    
 paid per share divided by the common stock share price at the end of the  
 period.                                                                   
                                                                           
                                                                           
                                                                           
                      CYPRESS SEMICONDUCTOR CORPORATION                     
                    CONSOLIDATED DILUTED EPS CALCULATION                    
                    (In thousands, except per-share data)                   
                                 (Unaudited)                                
                                                                            
                  ----------------------------------------------------------
                                       Three Months Ended                   
                  ----------------------------------------------------------
                        March 29,          December 28,        March 30,    
                           2015                2014              2014       
                  --------------------- ----------------- ------------------
                      GAAP    Non-GAAP    GAAP   Non-GAAP   GAAP    Non-GAAP
                  ----------  --------  -------- -------- --------  --------
                                                                            
Net income (loss)                                                           
 attributable to                                                            
 Cypress           $(229,788) $(87,857) $  3,503 $ 22,056 $ (7,934) $ 11,975
                   ---------  --------  -------- -------- --------  --------
                                                                            
Weighted-average                                                            
 common shares                                                              
 outstanding                                                                
 (basic)             196,471   196,471   161,864  161,864  154,572   154,572
Effect of dilutive                                                          
 securities:                                                                
  Stock options,                                                            
   unvested                                                                 
   restricted                                                               
   stock and other         -         -     7,284    8,892        -    11,366
                   ---------  --------  -------- -------- --------  --------
Weighted-average                                                            
 common shares                                                              
 outstanding for                                                            
 diluted                                                                    
 computation         196,471   196,471   169,148  170,756  154,572   165,938
                   ---------  --------  -------- -------- --------  --------
                                                                            
Net income (loss)                                                           
 per share                                                                  
 attributable to                                                            
 Cypress - basic   $   (1.17) $  (0.45) $   0.02 $   0.14 $  (0.05) $   0.08
Net income (loss)                                                           
 per share                                                                  
 attributable to                                                            
 Cypress - diluted $   (1.17) $  (0.45) $   0.02 $   0.13 $  (0.05) $   0.07
                                                                            
                  ----------------------------------------------------------
                                                                            
                                                                            
                  ----------------------------------------------------------
                         March 29,         December 28,        March 30,    
                           2015                2014               2014      
                  --------------------- ----------------- ------------------
                                                                            
Average stock                                                               
 price for the                                                              
 period ended             $14.72              $10.77             $10.13     
                                                                            
Common stock                                                                
 outstanding at                                                             
 period end (in                                                             
 thousands)               331,015             163,013           156,970     
                                                                            
                  ----------------------------------------------------------
                                                                            
                                                                            

NOTES TO NON-GAAP FINANCIAL MEASURES

To supplement its consolidated financial results presented in accordance with GAAP, Cypress uses the following non-GAAP financial measures which are adjusted from the most directly comparable GAAP financial measures:

The non-GAAP measures set forth above exclude charges primarily related to stock-based compensation as well as restructuring charges, acquisition-related expenses and other adjustments. For the three months ended March 29, 2015, there were additional adjustments related to our merger with Spansion. 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. 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. Pursuant to the requirements of Regulation G and to make clear to our investors the adjustments we make to GAAP measures, we have provided a reconciliation of the non-GAAP measures to the most directly comparable GAAP financial measures.

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Contacts:
Thad Trent
EVP Finance & Administration and CFO
(408) 943-2925

Joseph L. McCarthy
Director, Corporate Communications
(408) 943-2902