Cypress Announces Expansion Underway to Triple Manufacturing Capacity for Leading TrueTouch™ Touchscreen Controller Family

Cypress Semiconductor Corp. (Nasdaq: CY) today announced a significant manufacturing capacity expansion for its rapidly growing TrueTouch™ touchscreen controllers. Cypress’s Fab 4 in Bloomington, Minnesota and Grace Semiconductor Manufacturing Company, Cypress’s primary foundry partner, will triple 2011 capacity for the S8™ manufacturing process versus 2010 levels. The expansions are on schedule, with the first additional capacity expected to come on-line in Q1 2011, and full completion expected in Q3 2011.

In addition to TrueTouch products, Cypress also manufactures its PSoC® 3 and PSoC 5, CapSense and NVSRAM products on the S8 process. Cypress's S8 process is based on 0.13-micron SONOS (Silicon Oxide Nitride Oxide Silicon) embedded nonvolatile memory technology. SONOS is highly compatible with standard CMOS technologies and offers numerous advantages including high endurance, low power, and radiation hardness. In addition, SONOS provides a more robust, manufacturable and cost-effective solution compared to other embedded non-volatile memory technologies.

“With a record number of design wins in high-volume mobile phone, tablets and other large screen platforms, we’re moving aggressively to ensure stable, ample and timely supply of our TrueTouch products,” said Norm Taffe, executive vice president of Cypress’s Consumer and Computation Division. “We’re also preparing for our next-generation PSoC and CapSense products to grow this year. This expansion gives our customers confidence that we can handle steep ramps in demand for their hot new products.”

“This is an example of our flexible manufacturing strategy working as planned,” said Shahin Sharifzadeh, executive vice president of worldwide Manufacturing and Operations for Cypress. “We can share the costs of this expansion while ensuring that we have capacity in place to meet rapidly growing demand.”

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 flagship PSoC® programmable system-on-chip families and derivatives such as PowerPSoC® solutions for high-voltage and LED lighting applications, CapSense® touch sensing and TrueTouch™ solutions for touchscreens. Cypress is the world leader in USB controllers, including the high-performance West Bridge® solution that enhances connectivity and performance in multimedia handsets. Cypress is also a leader in high-performance memories and programmable timing devices. Cypress serves numerous markets including consumer, mobile handsets, computation, data communications, automotive, industrial and military. Cypress trades on the Nasdaq Global Select Market under the ticker symbol CY. Visit Cypress online at www.cypress.com.

This release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding Cypress’ intent to expand its manufacturing capacity, its design wins, preparations for, and the expected growth of, its next generation PSoC and CapSense products, and other future events and financial expectations, each of which involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including: the continued operations of our manufacturing partners, the ability of Cypress to successfully execute its flexible manufacturing strategy, business and economic conditions and growth trends in the semiconductor industry and in various geographic regions; variations in customer demand for products and services; the timing of orders and manufacturing lead times; changes in customer order patterns or customer mix; increased competition in the semiconductor industry; dependence on the introduction and market acceptance of new product offerings; rapid technological and market change; manufacturing and sourcing risks; our ability to manage financial risk; and other factors listed in Cypress’s most recent reports on Form 10-K, 10-Q and 8-K. The information above speaks only as of the date of this release.

Cypress, the Cypress logo, PSoC, PowerPSoC, CapSense and West Bridge are registered trademarks and TrueTouch and S8 are trademarks of Cypress Semiconductor Corp. All other trademarks are property of their owners.

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