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Cypress Announces Closure of JV With SK Hynix System

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Cypress Corporation (CY - Free Report) recently closed its joint venture (JV) with SK hynix system ic, Inc. Based in Hong Kong, the newly formed JV — Sky High Memory Limited — has begun full operations.

SK hynix system owns 60% of the JV and the remaining 40% is 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.

Per the agreement, this JV will manufacture and sell Cypress’ existing single-level cell (SLC) NAND products, and 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. In order to target the auto space, the company has been making continuous efforts to build an exhaustive road map by supplying touchscreen controllers, flash memory and power management chips, alongside enabling wireless applications for connected cars.

It has been making rapid inroads in the industrial and The Internet of Things (IoT) markets by unveiling a wide array of products. We believe that 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 #3 (Hold). Some better-ranked stocks in the broader technology sector include Expedia Group, Inc. (EXPE - Free Report) , AMETEK, Inc. (AME - Free Report) and Inphi Corporation (IPHI - Free Report) , 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 at 13.4%, 9.6% and 28.4%, respectively.

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