February 14, 2005 – Cypress Semiconductor Corp. today announced its intention to sell Silicon Magnetic Systems (SMS), a subsidiary company founded to commercialize MRAMs, because the company wishes to find more attractive places to invest. The company also announced that it has signed an agreement to acquire SMaL Camera Technologies, a designer of digital imaging solutions.
Cypress CEO T.J. Rodgers said that based on the company’s latest calculations, the company no longer believes that the 1T-1MTJ MRAM technology will be able to successfully attack the SRAM market, leaving MRAM as a niche technology with higher bit pricing than that of SRAM. While the company thinks a niche MRAM business could be a profitable addition to Cypress’s portfolio of products, it currently has more attractive places to invest than in the capital-intensive MRAM business, Rodgers said.
Rodgers concluded, “We therefore have made the tough choice to sell our SMS subsidiary and to remove it from Cypress’s books by the end of the first quarter.”
Under the terms of the agreement to buy SMaL, Cypress will pay $42.5 million in cash, plus a performance-based earnout plan, contingent primarily on SMaL achieving certain revenue levels. SMaL posted sales of $10.5 million in fiscal year 2004.