Strong technology base; and Good market position. Weak profitability Aggressive pricing environment; Weak market conditions; and Moderate financial flexibility. The ratings on San Jose, Calif.-based Cypress Semiconductor Corp. reflect aggressive marketplace conditions and weak profitability. Cypress had about $630 million in debt and capitalized operating leases outstanding at June 30, 2006. The company manufactures specialty memory, timing, and logic semiconductors for the networking, wireless, and computing markets. Cypress has strengthened its product portfolio through internal development and acquisitions, and is shifting its focus toward proprietary devices such as CMOS image sensors, now about 25% of sales, while de-emphasizing commodity products. Still, Cypress' overall prices tend to decline at a challenging rate--about 30% year-over-year, while demand has been volatile. Revenues in
