Cypress President T.J. Rodgers Publishes GAAP Accounting Critique.

Business Editors/High-Tech Writers

SAN JOSE, Calif.--(BUSINESS WIRE)--July 18, 2002

Analytical Essay Takes Issue With GAAP Rules on Purchase Accounting

for Acquisitions, Pending Congressional Legislation on

New Stock-Option Reporting Requirements

Cypress Semiconductor Corporation President and CEO T.J. Rodgers today released an essay taking issue with GAAP reporting accuracy and potentially damaging Congressional legislation that would require companies to take a charge on their balance sheets to account for stock-options they issue to employees.

The essay, "When Accountants Attack Profits: The GAAP Accounting Exodus," is available on the Cypress website at http://www.cypress.com/pubs/gaapaccounting.pdf.

Rodgers argues in the essay that the GAAP requirement to report acquisitions on a purchase basis -- and to amortize the goodwill charges related to an acquisition -- unfairly distorts corporate earnings and has led to an exodus of companies in Silicon Valley and elsewhere away from GAAP accounting standards.

In addition, Rodgers says that a requirement to expense stock options would add a second -- potentially devastating -- negative impact to corporate balance sheets at a time when corporate confidence already is low due to volatility in the market and an acute focus on reporting irregularities due to the Enron debacle.

"Both FASB and the SEC should adhere to the requirements of the Hippocratic oath -- that is, to do no harm," Rodgers said. "The current accounting system works well, it built Silicon Valley, and it ought to be left alone."

About Cypress

Cypress Semiconductor Corporation (NYSE:CY) is Connecting from Last Mile to First Mile(TM) with high-performance solutions for personal, network access, enterprise, metro switch, and core communications-system applications. Cypress Connects(TM) using wireless, wireline, digital, and optical transmission standards, including Bluetooth, USB, Fibre Channel, SONET/SDH, Gigabit Ethernet, and DWDM. Leveraging its process and system-level expertise, Cypress makes industry-leading physical layer devices, framers, and network search engines, along with a broad portfolio of high-bandwidth memories, timing technology solutions, and programmable microcontrollers. More information about Cypress is accessible online at www.cypress.com.

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