Providing the most optimistic evaluation of the company's operations since the 2000 market downturn, Cypress president and chief executive T.J. Rodgers said the chip supplier had detected a change in customer purchasing patterns during the third quarter as low inventory and tightening supply result in longer lead times for a variety of products.

The San Jose, Calif., posted net income of $17.3 million, or 12 cents a share, for the three months ended Sept. 30, compared with a net loss of $55.1 million, or 45 cents a share, in the third quarter of 2002. During the same period, revenue grew 6%, to $216.6 million from $205 million and slightly better than the $214 million most analysts were expecting.

On a pro forma basis, the company reported income of 8 cents per share beating analysts' consensus estimate of 6 cents a share.

"Booking activity picked up during the quarter, allowing us to exceed our guidance and expectations twice," Rodgers said, in a statement. "The book-to-bill ratio was 1.06, with all divisions posting a book-to-bill greater than unity. The booking momentum has continued into early October."

Rodgers said all segments of the company's operations benefited from the growing market recovery, which he said is spurring OEMs to review their purchasing habits in view of tightening supply for certain undisclosed components.

"Historically low customer inventories and a narrowing of the gap between semiconductor supply and demand are prompting a change in customer purchasing habits," Rodgers said. With unit demand continuing to improve, an increasing number of our products are experiencing longer lead times."

"If these trends continue, we believe there is a strong possibility that the modest recovery of 2003 will turn into a boom in 2004-2005," Rodgers added.

By: DocMemory
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