Cypress Reports Fourth Quarter and Year End 2017 Results

+ Cypress expanded its automotive infotainment solution portfolio with the introduction of two new products. The Company announced production availability of the industry’s first Real Simultaneous Dual Band (RSDB) automotive-grade Wi-Fi^® and Bluetooth^® combo solution, which enables multiple users to connect and stream unique content to their devices simultaneously. In parallel, Cypress introduced a new automotive capacitive touchscreen controller family that delivers the market’s most advanced feature set for next-generation infotainment systems, including the capability to detect a finger up to 35 mm above the screen and provide accurate measurement of the pressure applied by multiple fingers.

+ At the recent Consumer Electronics Show in Las Vegas, Cypress showed products based on its PSoC^® 6 microcontroller (MCU), the industry's lowest power, most flexible dual-core MCU with built-in Bluetooth Low Energy (BLE) wireless connectivity. PSoC 6 is targeted for a variety of smart home, wearables, smart speakers, audio and other IoT applications.

+ Cypress’ single-chip wireless MCU and combo solutions for the IoT are the world’s first to deliver certified Bluetooth mesh connectivity to a consumer product—SYLVANIA SMART⁺ Bluetooth lighting products from LEDVANCE. Cypress announced three of its wireless combo chips and the latest version of its WICED^® software development kit support state-of-the-art Bluetooth connectivity with mesh networking capability. Cypress’ solutions enable a low-cost, low-power mesh network of devices that can communicate with each other—and with smartphones, tablets and voice-controlled home assistants—via simple, secure and ubiquitous Bluetooth connectivity.

+ Cypress paid a cash dividend of $38.7 million, or $0.11 per share, to holders of record of the Company’s common stock as of the close of business on December 28, 2017. The dividend was equivalent to a 2.9% annualized yield as of December 28, 2017. This dividend was paid on January 18, 2018.

REVENUE SUMMARY (In thousands, except percentages) (Unaudited)

	Three Months Ended
	December 31, 2017			October 1, 2017			Sequential Change
Business Unit¹
MCD	$	357,247		$	373,584		(4)	%
MPD	$	240,300		$	230,990		4	%
Total	$	597,547		$	604,574		(1)	%

Geographic
China & ROW	55		%	53		%	4	%
Americas	10		%	12		%	(17)	%
Europe	12		%	13		%	(8)	%
Japan	23		%	22		%	5	%
Total	100		%	100		%	—	%

Channel
Distribution	72		%	73		%	(1)	%
Direct	28		%	27		%	4	%
Total	100		%	100		%	—	%

	Twelve Months Ended					Twelve Months Ended
	(GAAP) ³					(Non-GAAP) ^2,3
	December 31, 2017		January 1, 2017		Sequential Change	December 31, 2017		January 1, 2017		Sequential Change
Business Unit ¹
MCD ^4,5	$	1,409,265	$	994,482	42%	$	1,409,265	$	1,013,232	39%
MPD	918,506		928,626		(1)%	918,506		928,626		(1)%
Total	$	2,327,771	$	1,923,108	21%	$	2,327,771	$	1,941,858	20%

Geographic
China & ROW ⁴	54%		53%		2%	54%		53%		2%
Americas	11%		12%		(8)%	11%		12%		(8)%
Europe	13%		13%		0%	13%		13%		0%
Japan	22%		22%		0%	22%		22%		0%
Total	100%		100%		0%	100%		100%		0%

Channel
Distribution	73%		73%		0%	73%		72%		1%
Direct ⁴	27%		27%		0%	27%		28%		(4)%
Total	100%		100%		0%	100%		100%		0%

1.		The Microcontroller and Connectivity Division ("MCD") includes microcontroller, automotive and connectivity products and the Memory Products Division ("MPD") includes RAM, Flash and AgigA Tech products.
2.		See “Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures” tables (“Non-GAAP Results” tables) included below.
3.		2016 includes results from the IoT business acquired from Broadcom on July 5, 2016.
4.		Revenue for the twelve months ended 2016 includes $18.75 million of legacy Spansion non-GAAP licensing revenue in MCD, APAC region and direct channel, respectively.
5.		Historical results of MCD through July 29, 2016 include Deca Technologies.

FIRST QUARTER 2018 FINANCIAL OUTLOOK

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