The Cypress 3.0 Vision and Blueprint: Complete Embedded Solutions for Fast-Growing Markets

Posted on February 27, 2017 by Hassane El-Khoury

I am excited by the opportunity to blog about Cypress’ business strategy and market opportunities, along with industry trends and management best practices. In my role as Cypress’ president and CEO, I’m on the road roughly half of the time meeting with customers, partners and investors. I make it my priority to talk with customers about how to solve their problems and to meet or exceed their expectations. So, I look forward to sharing my perspective on the industry with our larger global audience.

In this first post, I’d like to talk about Cypress 3.0, my vision for the company—our focus on selling complete embedded solutions in markets that are growing faster than the overall semiconductor industry.

One-Stop Embedded Solutions Supplier

Piece by piece, we’ve transformed Cypress into the preferred solutions supplier for our Automotive, Industrial and Internet of Things (IoT) customers. We’ve accomplished this through the Spansion merger and the acquisition of Broadcom’s wireless IoT business in addition to sustained organic growth and consistent breakthrough product development. The result of this transformation, as you can see from the diagram below, is that Cypress now has a complete, differentiated, industry-leading portfolio of ICs for the IoT and other embedded systems.

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When we talk about solutions for embedded systems, however, we don’t mean individual products. We mean combinations of our MCUs, wireless connectivity, analog, USB and memory solutions—in some cases paired with partner or customer IP—along with the software that enables everything to work together seamlessly. The pace of change in our business is faster than ever. Complete system solutions enable us to help our customers manage the changing technology landscape, narrow their supplier base and provide them with a turnkey path to new products, new markets and new revenue.

That’s how Cypress 3.0 will enable us to serve our customers. To provide value to our investors, we must continue to improve our performance in markets growing faster than the broader semiconductor industry.

Fast-Growing Markets and Profitable Growth

In the Automotive market, Cypress has multiple segments growing faster than the semiconductor industry. Compared with overall semiconductor growth of approximately 3% (on a good day), and about 5% growth for automotive semis, Advanced Driver Assistance Systems (ADAS) is growing at 18.8%, Connected Cars at 14.1%, Infotainment at 8.7% and Clusters at 8.2%. In the wake of the Broadcom IoT acquisition, our addressable automotive content has expanded as a result of the proliferation of electronics in this market and the expanded range of Cypress’ solutions, including wireless connectivity products.

IoT—including Connected Home and the rapidly expanding universe of connected consumer products—is another key Cypress market, in part because of the programmability of our solutions and the state-of-the-art wireless technology and robust developer ecosystem we acquired from Broadcom. IoT has been defined in many ways, but what it means to us is the ability to embed intelligence and wireless connectivity in previously unconnected products, enabling them to download and use information, upload it for analysis to a point of collection such as “the cloud,” or even to exchange data—for example, cars that rely on collision-avoidance systems that pinpoint one another on the road to make driving safer.

Customers demand a range of capabilities from their IoT suppliers. Two of the most important are low power and the ease of use of wireless products in particular. These are two areas in which Cypress excels.

IoT products are differentiated in part by the time between battery “fill-ups.” Our low-power MCUs and wireless radios help to significantly prolong battery life.

The difficulties of designing with analog-based wireless connectivity present one of the most significant barriers to improving our customers’ time to market. Cypress’ WICED (Wireless Internet Connectivity for Embedded Devices) software, the foundation of a community of more than 11,000 users, plugs into the cloud automatically, making designers’ lives much easier and accelerating their time to market. In addition, the programmability of our products enables faster design iteration in response to changing market requirements and continuously evolving connectivity standards and specifications.

Our industrial business—including connectivity solutions for factory automation and Industry 4.0 —and USB Type-C, next-generation USB connectivity with smaller plugs and power delivery, represent additional growth opportunities for Cypress. Each aligns with our overall Cypress 3.0 blueprint, enabling us to design multiple Cypress devices into end products in fast-growing markets.

Cypress plays to win. We’re Top 3 in each of our key target markets with a clear path to No. 1. We’re reallocating capital resources to our growth and core businesses. We’re out there in the field solving problems for our customers in innovative ways. More than half of our revenue comes from businesses growing faster than the semiconductor industry.

These proof points serve as early validation that the Cypress 3.0 path is the right one for us.

I’d like to take this opportunity to thank our customers, partners and employees, whose success and satisfaction means everything to us.

Until next time, here’s wishing each of you a healthy and prosperous 2017.

 

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