During the third quarter, Cypress expanded its connect, compute and store portfolio for the Internet of Things and strengthened its positioning with key developments in its partner ecosystem, and the Company’s focus on delivering automotive-grade quality and reliability resulted in a key customer win. Highlights included:

+ Cypress expanded its collaboration with Arm^® to enable secure, easy-to-use management of IoT edge nodes based on Cypress’ leading compute and connectivity hardware. The solution integrates the Arm Pelion™ IoT Platform with Cypress’ ultra-low power, dual-core PSoC^® 6 microcontrollers (MCUs) and CYW4343W Wi-Fi^® and Bluetooth^® combo radios for robust wireless connectivity. PSoC 6 provides hardware-based security that adheres to the highest level of device protection defined by the Arm Platform Security Architecture (PSA). Cypress and Arm demonstrated hardware-secured onboarding and communication through the integration of the PSoC 6 MCU and Pelion IoT Platform in the Arm booth at the Arm TechCon event this month.

+ Cypress expanded the cloud connectivity offerings for its IoT solutions with AliOS Things, Alibaba’s embedded IoT operating system. Developers can now streamline connections to Alibaba Cloud, the cloud computing arm of Alibaba Group, and design differentiated products with the flexible computing and security features of Cypress’ programmable PSoC microcontrollers and the robust wireless connectivity of its industry-leading Wi-Fi and Bluetooth portfolio for the IoT. Cypress also collaborated with the Alibaba Group to strengthen its sales presence in China by opening up an online store in Alibaba Group’s TMALL market.

+ Cypress introduced a Bluetooth audio offering that brings leading-edge performance to wireless earbuds and hearables. Based on the new Wireless Audio Stereo Synchronization (WASS™) application and the CYW20721 Bluetooth and Bluetooth Low Energy (BLE) Audio MCU, the solution provides robust connections for differentiated performance in wireless earbuds. The MCU delivers up to twice the range of competing chips and combines with the WASS application to enable superior cross-body performance, giving users uninterrupted audio on their earbuds with their smart device in their back pocket or on their wrist. The MCU also operates at nearly 50% lower power consumption than competing chips, enabling twice the playback time or the use of smaller batteries in sleeker form-factors.

+ Automotive supplier Yazaki North America implemented Cypress’ instrument cluster solution to drive the advanced graphics in its instrument cluster for a leading American car manufacturer. Yazaki selected Cypress based on its unique offering of five chips that combine to drive dual displays and provide instant-on memory performance with automotive-grade safety compliance. The Cypress solution is based on a Traveo™ MCU, along with two high-bandwidth HyperBus™ memories in a multi-chip package (MCP), an analog power management IC (PMIC) for safe electrical operation, and a PSoC MCU for system management support.

+ Cypress’ manufacturing and support operations attained the latest IATF16949:2016 and ISO9001:2015 certifications for automotive quality. Developed by the International Automotive Task Force in conjunction with the international standards community, IATF 16949 is the industry's highest standard for quality management systems in the automotive sector. The certifications help ensure the reliable performance of components, which is critical for enabling fail-safe operation of automotive systems.

+ On October 18, 2018, Cypress paid a cash dividend of $39.8 million, or $0.11 per share, to holders of record of the Company’s common stock as of the close of business on September 27, 2018. The dividend was equivalent to a 3.0% annualized yield as of September 28, 2018.

REVENUE SUMMARY (In thousands, except percentages) (Unaudited)
		Three Months Ended
		September 30, 2018				July 1, 2018				October 1, 2017				Sequential Change			Year-over-year Change
Business Unit 1
MCD		$	413,413			$	368,526			$	373,584			12.2	%		10.7	%
MPD		$	259,622			$	255,564			$	230,990			1.6	%		12.4	%
Total		$	673,035			$	624,090			$	604,574			7.8	%		11.3	%

		Three Months Ended
		September 30, 2018			July 1, 2018			October 1, 2017
End Market
Industrial		19.6	%		19.0	%		17.7	%
Automotive		31.0	%		30.8	%		30.6	%
Consumer		32.0	%		31.3	%		34.8	%
Enterprise		17.4	%		18.9	%		16.9	%
Total		100	%		100	%		100	%

1.		The Microcontroller and Connectivity Division ("MCD") includes microcontroller, wireless connectivity and USB products and the Memory Products Division ("MPD") includes RAM, Flash and AgigA Tech products.

FOURTH QUARTER 2018 FINANCIAL OUTLOOK