December 13, 2005 – Cypress Semiconductor Corp. and Grace Semiconductor Manufacturing Corp. have entered into a strategic foundry partnership where Cypress will transfer its programmable system-on-chip mixed signal array, CMOS image sensor, WirelessUSB, and PC clock process technologies to Grace and in turn receive preferential volume access to Grace’s foundry capacity.

The increase in capacity will augment output from Cypress’s production facilities in Bloomington, MN, and Round Rock, TX, supporting Cypress’s high-volume, high-growth products used in consumer and computation devices.

Qualification of the first product is scheduled for the beginning of the 3Q06in Grace’s 8-in. facility in Shanghai. Grace will start production with the PSoC mixed-signal array on Cypress’s proprietary S4 technology. Following the ramp-up at Grace, Cypress expects to increase its overall capacity by an additional 15,000 wafer starts/month by the 4Q07.