May 14, 2007 – Cypress Semiconductor says it will sell its pseudo static random access memory (PSRAM) product line, including IP, photomasks, and probe card assets, to Taiwan’s Elite Semiconductor Memory Technology Inc. (ESMT) for an undisclosed amount.

“The divestiture of the PSRAM business is consistent with Cypress’s new strategic direction,” noted Ahmad Chatila, EVP of Cypress’s memory and imaging division, in a statement.

That new direction has led to a number of moves, notably a pullback from leading-edge chip development. In recent months, Cypress has sold its ownership in the Silicon Valley Technology Center to private equity investors, citing that its products no longer rely heavily upon leading-edge process technology such as the 65nm R&D center operates.

The company also has sold its automotive image sensor subsidiary to Sensata Technologies Inc., and announced it will begin using Taiwan foundry United Microelectronics Corp. (UMC) to produce its next-generation flagship SRAM products.

The Taiwan Economic News had earlier reported that ESMT, whose product lines include SRAM and NOR flash chips, was integrating its NOR flash chips with Cypress’ PSRAM chips for handset memory in a deal reportedly worth $15 million, and an Elite spokesperson told the paper that though he had no knowledge of that deal, Elite was eager to break into that market and chip away at the huge market dominated by Spansion and SST to support cell-phone makers.

“We believe that this transaction will not only boost ESMT’s revenue significantly, but that it will also enable the company to quickly cut into the supply chain of major cellular phone makers, since Cypress is one of the world’s top-tier PSRAM suppliers,” said Hsing-Hai Chen, ESMT chairman, in a statement.

With Cypress’ PRAM product additions, ESMT extends its lower-power SDRAM offerings (16, 32, 64, and 128-Mbit) for handhelds into lower-density memory products (2, 4, 8, 16, and 32-bit PSRARM). Chen noted that low-power memory chips are key components in mobile communications, a market that ESMT has been “aggressively pursuing” since it is a significant driver in consumer electronics.