Capitalizes on connectivity needs in IoT era and automotive applications
Hassane El-Khoury, Cypress president and CEO, said in an interview with EE Times that Cypress enjoyed "stellar growth" during the year, outgrowing the industry as a whole even as the broader chip market enjoyed one of its best years in more than a decade. "I'm very proud and very happy with the execution as a company," El-Khoury said.
Since taking the reins at Cypress from company founder T.J. Rodgers in late 2016, El-Khoury has pushed hard on a strategy known as "Cypress 3.0" to refocus the company around products in the automotive, industrial and consumer markets.
Bolstered by the 2015 acquisition of NOR flash vendor Spansion and the 2016 acquisition of Broadcom's Internet of Things (IoT) business, Cypress has capitalized on the growing importance of connectivity in the IoT era and the growing semiconductor content being designed into cars and trucks.
Sales of wireless connectivity products were particularly strong in 2017. El-Khoury said wireless sales increased by 46 percent last year and have essentially doubled since Cypress bought the business from Broadcom in 2016.
El-Khoury said 2017 brought about a revolution on the smart home front, with products like Amazon's Echo, Google's Google Home and smart speakers from Sonos — all of which feature Cypress chips — providing a glimpse of what is to come. "As these things sell through and more people buy them, we are going to keep that growth going," El-Khoury said.
Cypress reported fourth quarter sales of $597.5 million, a decline of 1 percent from the third quarter but up 13 percent compared to the fourth quarter of 2016. The company reported a loss in accordance with generally accepted accounting principles (GAAP) of $36 million, compared with a net income of $11 million in the previous quarter and a GAAP net loss of $72.4 million in the year-ago quarter.
On a pro-forma basis, excluding charges, Cypress reported a fourth quarter net income of $104.7 million, up from a net income of $99 million in the previous quarter and $53.8 million in the fourth quarter of 2016.
For the year, Cypress reported sales of $2.33 billion, up 21 percent from 2016. The company reported a GAAP net loss of $93.7 million, narrowed from a GAAP net loss of $686.3 million in 2016. Cypress' 2017 pro forma net income was $324.4 million, up 90 percent from $170.5 million in 2016.
For the current quarter, which closes March 31, Cypress expects sales to decline to between $565 million to $595 million. El-Khoury said the sequential dip is much milder than the seasonal norm for Cypress.
"We are starting the year strong and we are going to grow from that," he said.
— Dylan McGrath is the editor-in-chief of EE Times.