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 $706 million in debt and capitalized operating leases outstanding at March 31, 2004. 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, now about 25% of sales, while de-emphasizing commodity products. Still, prices tend to decline about 30% year-over-year, while demand has been volatile. Revenues have been trending upward since the beginning of 2003. Sales in the March
