791915--3/1/2007--CYPRESS_SEMICONDUCTOR_CORP

related topics

{customer, product, revenue}

{cost, operation, labor}

{product, market, service}

{personnel, key, retain}

{loss, insurance, financial}

{cost, regulation, environmental}

{operation, natural, condition}

{financial, litigation, operation}

{control, financial, internal}

{stock, price, operating}

{property, intellectual, protect}

{competitive, industry, competition}

{operation, international, foreign}

{acquisition, growth, future}

{interest, director, officer}

{debt, indebtedness, cash}

We face significant volatility in supply and demand conditions for our products and this volatility, as well as any failure by us to accurately forecast future supply and demand conditions, could materially and negatively impact our business. Our business, financial condition and results of operations will be seriously harmed if we fail to compete successfully in our highly competitive industry and markets. Our financial results could be adversely impacted if we fail to develop, introduce and sell new products or fail to develop and implement new technologies. The complex nature of our manufacturing activities makes us highly susceptible to manufacturing problems and these problems can have a substantial negative impact on us when they occur. Problems in the performance or availability of other companies we hire to perform certain manufacturing and transport tasks can seriously harm our financial performance. SunPower is currently facing an industry-wide shortage of polysilicon. The prices that SunPower pays for polysilicon have increased recently and SunPower expects these price increases to continue, which may constrain revenue growth and decrease gross margins and profitability. In addition, an inability to secure adequate polysilicon supplies could severely hurt operations and result in a significant decrease in SunPower s and Cypress revenues and profits. SunPower will continue to be dependent on a limited number of third-party suppliers for key components for its products, which could prevent it from delivering products to its customers within required timeframes, which could result in installation delays, cancellations, liquidated damages and loss of market share. A limited number of SunPower s customers are expected to continue to comprise a significant portion of its revenues and any decrease in revenue from these customers could have an adverse effect on SunPower. If the market for solar power products takes longer to develop than SunPower anticipates or does not develop at all, or if SunPower fails to compete successfully in the solar power market, its revenue and profitability could be adversely affected. SunPower generally does not have long-term agreements with its customers and, accordingly, could lose customers without warning. Although SunPower expects the acquisition of PowerLight to be beneficial, such benefits may not be realized because of integration difficulties or other challenges. SunPower intends to recognize most of their revenues generated from PowerLight on a percent completion basis and upon the achievement of contractual milestone, so any delay or cancellation of a project could adversely affect SunPower s and Cypress results of operations. Our ability to meet our cash requirements depends on a number of factors, many of which are beyond our control. Any guidance that we may provide about our business or expected future results may prove to differ from actual results. The trading price for our common stock has been and may continue to be volatile and can be affected by the trading price of SunPower class A common stock and/or speculation about the possibility of future actions we might take in connection with our SunPower holdings. We may be unable to protect our intellectual property rights adequately and may face significant expenses as a result of ongoing or future litigation. The unfavorable outcome of litigation or investigations pending against us could materially impact our business. We face additional problems and uncertainties associated with international operations that could seriously harm us. SunPower s efforts to establish an effective, unified system of internal control over financial reporting with respect to PowerLight could present challenges, and SunPower, and as a result Cypress on a consolidated basis, may not be able to accurately report financial results or prevent fraud. We compete with others to attract and retain key personnel, and any loss of, or inability to attract, such personnel would harm us. We are subject to many different environmental, health and safety lows, regulations and directives, and compliance with them may be costly. Our operations and financial results could be severely harmed by certain natural disasters. The failure to integrate our business and technologies with those of companies that we or SunPower have recently acquired, or that we or SunPower may acquire in the future, could adversely affect our financial results. We may incur losses in connection with loans made under our stock purchase assistance plan. We maintain self-insurance for certain indemnities we have made to our officers and directors. Recently implemented regulations related to equity compensation could adversely affect our ability to attract, retain and motivate key personnel.

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791915--3/1/2007--CYPRESS_SEMICONDUCTOR_CORP_/DE/