The ratings on San Jose, Calif.-based Cypress Semiconductor Corp. reflect aggressive marketplace conditions, weak profitability and its improved balance sheet strength. Cypress had about $630 million in debt and capitalized operating leases outstanding at Dec. 31, 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 the December quarter were $287 million, up modestly from the prior quarter,
