Strong technology base; and Good market position. Aggressive pricing environment; Weak market conditions; and Moderate financial flexibility. The ratings on San Jose, Calif.-based Cypress Semiconductor Corp. reflect aggressive marketplace conditions, in part offset by the company's improving operating performance in the recent cyclical recovery and the company's adequate financial flexibility. Cypress had about $700 million in debt and capitalized operating leases outstanding at June 30, 2004. The company manufactures specialty memory, timing, and logic semiconductors for the networking, wireless, and computing markets. In June 2004, Cypress agreed to buy FillFactory NV for $100 million cash, which will moderately reduce the company's financial flexibility, but bolster its position in high-end CMOS sensors for professional cameras and medical instruments. Cypress has strengthened
