Cypress Agrees to Sell Silicon Valley Technology Center to Oak Hill Capital Partners and Tallwood Venture Capital.

SAN JOSE, Calif. -- Cypress Semiconductor Corp. ("Cypress")(NYSE:CY) today announced an agreement to sell its Silicon Valley Technology Center ("SVTC") business to private equity firms Oak Hill Capital Partners ("Oak Hill") and Tallwood Venture Capital ("Tallwood") for approximately $53 million in cash. The transaction is expected to close by early March.

As part of the transaction, Cypress will transfer substantially all equipment, process technologies, and personnel associated with its SVTC business to the buyer. Cypress will remain an important SVTC customer.

"With SVTC, Cypress created a unique R&D business model that turned a capital-intensive operation into a profit center and that has enabled many novel silicon technologies to find their way from lab to fab using the SVTC," said T.J. Rodgers, president and CEO of Cypress. "With a recent shift in focus to a new mix of programmable products and solutions, Cypress now has very few products requiring 'bleeding-edge' technology, leading us to conclude that we can do R&D more cost-effectively as an SVTC customer than as an owner."

"We believe SVTC plays a valuable role in the semiconductor value chain. We are thrilled to provide resources that will allow SVTC's management to pursue their vision and provide a wider range of services and technologies to the fabless semiconductor community," said J. Crandall, managing partner of Oak Hill.

"Historically, innovation in the fabless semiconductor industry has been limited to device architecture and circuit design. Going forward, we believe that new semiconductor materials, processes and devices represent the new frontier in which rich innovation will occur. SVTC possesses the unique talent and capabilities to enable these new dimensions of innovation to come to fruition and makes them available to the creativity of fabless semiconductor companies," said Luis Arzubi, general partner of Tallwood Venture Capital.

About SVTC

Located in the heart of Silicon Valley, SVTC offers startups and established companies the opportunity to develop and characterize novel silicon-based technologies cost effectively using a shared R&D environment. SVTC provides customers access to a state-of-the-art manufacturing-like fab environment and semiconductor toolset, allowing customers to bring their technologies to mass production quickly and without a costly investment in equipment. Cypress began selling access to its San Jose R&D foundry in 2000 and formalized this novel approach to semiconductor services by creating SVTC in 2004. Over the years, the business grew to serve dozens of customers ranging from starts-ups to large fabless semiconductor companies. Visit us at www.svtc.com.

About Cypress

Cypress delivers high-performance, mixed-signal, programmable solutions that provide customers with rapid time-to-market and exceptional system value. Cypress offerings include the PSoC Programmable System-on-Chip, USB controllers, general-purpose programmable clocks and memories. Cypress also offers wired and wireless connectivity solutions ranging from its WirelessUSB radio system-on-chip, to West Bridge and EZ-USB FX2LP controllers that enhance connectivity and performance in multimedia handsets. Cypress serves numerous markets including consumer, computation, data communications, automotive, industrial, and solar power. Cypress trades on the NYSE under the ticker symbol CY. Visit Cypress online at www.cypress.com.

About Oak Hill Capital Partners

Oak Hill Capital Partners is a private equity firm with more than $4.6 billion of committed capital from leading entrepreneurs, endowments, foundations, corporations, pension funds and global financial institutions. Robert M. Bass is the lead investor. Over a period of nearly 20 years, the professionals at Oak Hill Capital Partners have invested in more than 50 significant private equity transactions. Oak Hill Capital Partners is one of several Oak Hill partnerships, each of which has a dedicated and independent management team. These Oak Hill partnerships comprise over $20 billion of investment capital across multiple asset classes, including private equity, special situations, high yield and bank debt, venture capital, real assets, public equity and hedge funds. For more information about Oak Hill, visit www.oakhillcapital.com.

About Tallwood Venture Capital

Tallwood Venture Capital, a Silicon Valley venture capital firm, invests exclusively in semiconductor and semiconductor-related technologies. The principals of Tallwood have deep, semiconductor experience that spans all aspects of the semiconductor industry value chain. By offering broad semiconductor knowledge, direct operating experience and a high degree of availability, Tallwood Venture Capital builds close, active working relationships with its portfolio companies. Its portfolio includes Marvell (Nasdaq:MRVL) and SiRF (Nasdaq:SIRF). For more information on Tallwood Venture Capital, visit www.tallwoodvc.com.

Statements made in this release that are not historical in nature and that refer to Cypress or its subsidiaries' plans and expectations for the future are forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Our actual results may differ materially due a variety of factors, including our ability to close the proposed SVTC transaction as well as those identified in our filings with the Securities and Exchange Commission. All forward-looking statements included in this release are based upon information available to Cypress as of the date of this release, which may change, and we assume no obligation to update any such forward-looking statement. We use words such as "anticipates," "believes," "expects," "future," "look forward," "planning," "intends" and similar expressions to identify such forward-looking statements.

Cypress and the Cypress logo are registered trademarks of Cypress Semiconductor Corporation. All other trademarks or registered trademarks are the property of their respective owners.