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Cypress-SK Hynix System JV Receives Regulatory Approval

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Cypress Corporation recently received regulatory antitrust approval for the closing of its joint venture (JV) with SK hynix system ic, Inc.

The newly formed JV, Sky High Memory Limited, will be based in Hong Kong and is expected to begin full operations from next month.

Post closure of the JV, SK hynix system will own 60% of the same and the remaining 40% will be owned by Cypress. The deal is expected to provide customers with a stable supply of NAND products in varied markets, namely consumer, networking, industrial and automotive.

Back Story

Last October, the company had announced the divestiture of NAND business through a joint venture with SK Hynix system ic.

Per the agreement, the JV will manufacture and sell Cypress’ existing single-level cell (SLC) NAND products, as well as continue to invest in R&D for next-generation NAND products.

Notably, the deal will help the company focus more on automotive, industrial and IoT markets.

Cypress remains optimistic about the growing momentum across these markets. Further, the company’s strong IoT applications are likely to drive growth in the near term and long haul.

Bottom Line

Cypress sits on a multibillion-dollar opportunity in the automotive space, as its chips enable connectivity in the cars of tomorrow. The company has been making continuous efforts to build an exhaustive road map in order to target the auto space by supplying touchscreen controllers, flash memory, and power management chips, alongside enabling wireless applications for connected cars.

It has also been making rapid inroads in the industrial and The Internet of Things (IoT) markets by unveiling a wide array of products. We believe that the continuing innovation in these growing markets should lead to increasing demand for Cypress’ products over the next few years.

Zacks Rank & Stocks to Consider

Cypress currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the broader technology sector include Expedia Group, Inc. (EXPE - Free Report) , AMETEK, Inc. (AME - Free Report) and Inphi Corporation , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for Expedia, AMETEK and Inphi is projected to be 13.4%, 9.6% and 28.4%, respectively.

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