Cypress Semiconductor (CY, Financial) is improving. However the improvement is slow but the initiatives that the company is taking and some of the moves that Cypress made in the past are expected to reap good benefits for its future. Cypress has great expectations from its industrial and automotive segment. These segments are really showing positive signs and also they have contributed to about 43% to the revenue in the past. Cypress is expecting same kind of out performance from these segments in future.
Further, Cypress thinks that the free cash flows might lead it to capture better market share in future. The company has been in the limelight for generating good cash flows in the past. In the recently reported quarter, Cypress generated positive gross margin mainly due to the cash flows which it generated which was about $39.5 million or 21% of the revenue.
Positive for the future
Cypress Semiconductor is positive about the growth of DecaTech and AgigA Tech. It is also making aggressive investments in these two companies and believes that though the growth is slow, it will start seeing positive growth in the revenue from next year as they accelerate their operations. Moreover, Cypress also has great expectations from 55-nanometer node. Due to its matchless features, Cypress is expecting it to be a key growth driver for it as well as an economically important node for the company.
Further, with the SONOS technology Cypress is thinking to have a competitive advantage over its competitors which will lead the company to earn extra penny as compared to other peers which will strengthen its balance sheet. This will certainly help Cypress to attract investors, gaining market share in the future.
With the growing internet of things market and the firm smartwatches active in the market, Cypress’ teardown firm Techinsights is seeing a good market catch with Gen5 in the Samsung Gear Live SmartWatch. The company thinks it to be a big win for it and with the growing market it will be able to explore this note well.
Strengthening the product portfolio
Cypress is also working on strengthening its product portfolio. It has recently released its fourth generation wireless radio which is popularly known as wireless USB. Due to its best in the class features, it is expected to create a good market position for Cypress. This wireless USB has an ability to connect mouse, keyboard etc to personal computer. Also, the radio has a faster 2 megabit per second data rate which makes the data transmission faster while running the radio. This happens so because it cuts the power.
In addition, Cypress has also come up with new static RAM loaded with a new technology called Error-Correcting Code. This is expected to be a good introduction by the company and is counting on it as it sees good traction summing up for this newly introduced RAM.
Besides North America, Cypress also has plans to spread its foot prints on the international front as well. In this league Cypress has signed five new distribution partners in Asia. But Cypress is still anticipating weak response from China.
Conclusion
Thus, Cypress is making a number of positive moves that make it a good stock to invest in for the long run. Hence, investors should definitely consider this stock.
