Cypress Semiconductor Corporation (Cypress) has reported revenues of $139.3 million for the first quarter of 2009, down 17.3%, compared with the revenues of $168.4 million in the year-ago quarter. It has also reported net loss of $90.7 million, or $0.67 loss per share, for the first quarter of 2009, compared with the net loss of $23.6 million, or $0.15 loss per share, in the year-ago quarter.

Revenue exceeded the high end of Cypress’ guidance due to better than expected results across all divisions and channels as the quarter progressed.

Non-GAAP net loss for the 2009 first quarter—earnings that exclude stock-based compensation, acquisition-related charges, and other special charges and credits—totaled $29.5 million, or a diluted net loss per share of $0.22. That compares with a non-GAAP diluted net loss per share of $0.08 for the prior quarter and non-GAAP earnings per share of $0.01 for the year-ago quarter (excluding SunPower).

Cypress President and Chief Executive Officer (CEO) T.J. Rodgers said, “The first quarter remained challenging for us; our revenue fell 15.6% sequentially. However, we exceeded the upper end of our guidance and Street expectations due to better-than-expected revenue in all divisions. The SRAM group even grew sequentially, despite the downturn. Furthermore, we expect to continue to increase our SRAM market share moving forward. Revenue from proprietary products such as PSoC®, West Bridge®, and TrueTouch exceeded our initial expectations going into the quarter.”

“Cypress’s gross margin fell short of our guidance as we proactively decreased inventory and drove factory utilization to an all-time low of 34%. We expect gross margin to increase significantly over the next two quarters as we ramp production to meet increased demand and continue to reduce costs. Pricing continues to be fairly stable. Our corporate average selling price (ASP) increased 10.9% sequentially to our highest level since Q304.”

“Our semiconductor book-to-bill ended the first quarter at 1.12, with all divisions above unity. Ordering patterns began to stabilize in early Q1 and we entered the second quarter 62% booked. Customers are beginning to place backlog orders and to restock depleted inventory levels.”

“The economy obviously remains unsettled. Nonetheless, we believe that Q1 was the bottom of the trough for revenue and gross margins. As the economy recovers, we expect to grow faster than the overall semiconductor market with strong earnings growth and cash flow leverage.”

Business Review:

Non-GAAP consolidated gross margin for the first quarter was 34.6%, down 7.9 percentage points from the previous quarter due mainly to record low utilization levels and inventory reserves.

Net inventory decreased by 17.8% sequentially as the company aggressively reduced inventory to meet current demand requirements. Distributor inventory declined by 15% sequentially.

First-Quarter 2009 Highlights:

Programmable and proprietary products accounted for 78% of Cypress’s revenue in the first quarter.

Cypress shipped its 500 millionth PSoC programmable system-on-chip device during the first quarter. The company has shipped PSoC revenue to nearly 9,000 PSoC customers to date. PSoC ranks among the fastest-ever product ramps in the embedded systems market.

Cypress began sampling its PSoC3 device globally. PSoC3 dramatically improves upon the performance of PSoC1. It features a 67 MHz 8051 microcontroller that is 10 times more powerful than PSoC1, with 10 times more programmable logic, and precision analog that is more than 20 times faster and more accurate. It also increases Cypress’s addressed market from $1.5 billion to $4.7 billion.

Cypress introduced the PowerPSoC family of embedded power controllers—the industry’s first fully integrated single-chip solution for controlling and driving high-power LEDs and other power applications such as small motors. LED lighting is forecast to grow at a compound annual rate of better than 90% over the next five years, according to the analyst firm Darnell Group. PowerPSoC adds to the powerful PSoC architecture special analog circuitry to control Cypress’ four 32-volt, one-ampere integrated power transistors.

Cypress announced that its TrueTouch solution drives the touchscreen interfaces in three new mobile phones: Sharp Communication Systems Group’s Softbank Mobile 931SH phone, LG Electronics’ KS360 mobile handset, and Fujitsu Limited’s Docomo Prime Series F-01A phone. Powered by PSoC, TrueTouch provides a fully integrated touchscreen solution with a state-of-the-art visual capability that allows dozens of gestures to be programmed in software.

Samsung Electronics Co. also selected the TrueTouch touchscreen solution for its award-winning P3 portable media player. Leveraging the TrueTouch solution’s flexible, PSoC-based architecture, the player enables users to control the system using a variety of customized gestures.

Cypress introduced the Turbo-MTP module for its West Bridge peripheral controllers that dramatically accelerates the transfer of multimedia files from PCs to cell phones and other handheld devices. The solution enables users to download a feature-length movie in less than a minute—10 times faster than conventional MTP implementations. Also, during download, the cell phone remains on line to receive emails, make phone calls, and to act as a tethered wireless modem.

Cypress’s CyFi low-power RF solution was named one of EDN magazine’s Hot 100 products of 2008.

Cypress’s intelligent lighting solutions now support the XLamp LEDs by Cree, one of the top LED producers worldwide. The device specifications and temperature characteristics of this product family are built into Cypress’s PSoC Designer visual embedded design software, enabling users to create complex lighting systems onscreen in drag-and-drop fashion, without writing custom computer code.

Cypress Envirosystems—a Cypress internal startup company—was named a “Startup of the Year” finalist in EE Times magazine’s Annual Creativity in Electronics (ACE) awards competition, recognizing excellence in business or technology development. Cypress Envirosystems’ electronic control and monitoring solutions save energy with a payback of one year or less, still attractive even in tough economic times.

Two Cypress products received awards from the EN-Genius Network, a leading electronics design publication. EN-Genius namedCypress’s West BridgeAstoria peripheral controller “Embedded Connectivity Product of the Year.” The publication also named Cypress subsidiary Cypress Envirosystems’ suite of wireless control and monitoring solutions “Most Cost-Effective Energy Conservation Product of the Year.”

Cypress sampled the industry’s first 65-nm synchronous SRAM devices, which store data at rates up to 40 gigabits per second and sell for as much as $100. The devices are used in routers, buffers, switches and basestations to improve network performance.

Dana Nazarian was named executive vice president of the Memory and Imaging Division. Nazarian, a 21-year Cypress veteran, was previously vice president of Cypress’s synchronous SRAM business unit. Nazarian replaces Ahmad Chatila who left Cypress to become the CEO of MEMC Electronic Materials Inc.