EUR 850.00 For Business Accounts Only

Morningstar | Cypress drives automotive growth during impressive second quarter; raising FVE to $14.

Cypress Semiconductor is a provider of advanced embedded systems used in a variety of markets, including mobile handsets, industrial, consumer, automotive, and military. An embedded system contains a microcontroller and memory that essentially makes it a small computer. The firm’s programmable system-on-chip is Cypress' feature-embedded system and allows customers to make modifications at any point during the design cycle. With the proliferation of the Internet of Things, Cypress should be a beneficiary even amid considerable competition.Embedded systems require three particular types of memory, including NOR flash to hold a program, static random access memory to hold intermediate results during computations, and dynamic random access memory for the main memory. Cypress has a 45% share of the SRAM market. SRAM is more expensive and less dense than more commonly used DRAM, but has carved a relatively small niche in industrial subsystems, automotive electronics, modern appliances that implement electronic user interfaces, and digital devices such as cameras. In 2015, Cypress merged with Spansion, the market leader in NOR flash. The deal was considered a “merger of equals” with complementary product lines. Spansion had a solid foothold in the auto and industrial markets, whereas Cypress was stronger in consumer-electronics devices and the Internet of Things. In 2016, Cypress acquired Broadcom’s wireless IoT business, which should further benefit the firm as semiconductor content within cars continues to rise.Additionally, the firm has developed important products in the computation realm, including its Truetouch solutions for smartphones and other touchscreen interfaces, Trackpad solutions for laptops, and USB controllers for PC peripherals, including keyboards, printers, and so on. However, Apple and Samsung have developed in-house solutions for touch microcontrollers. As a result, Cypress sold its Truetouch business, with the exception of its touchscreen endeavors in the automotive space, which we believe will drive solid growth as the firm expands its presence in high-end instrument clusters and infotainment systems.