Cypress Semiconductor's Customers Performance

As of the end of fiscal year 2017, we owned a wafer fabrication facility in Austin, Texas. External wafer foundries, mainly in Asia, manufactured approximately 63% of our wafers. We expect that purchase of wafers as a percentage of our total wafer consumption from our wafer foundry partners will increase in 2018.

We conduct assembly and test operations at our back-end manufacturing facilities in Cavite, Philippines and Bangkok, Thailand, manufacturing volume products and packages, which contribute to better leverage of

manufacturing cost. These facilities account for approximately 28% of the total assembly output and 38% of the total test output. Various subcontractors in Asia perform the balance of the assembly and test operations.

We have manufacturing services agreements primarily with the following partners:

Advanced Semiconductor Engineering, Inc. (“ASE”) - Agreements for assembly and test services;

Deca Technologies Inc. - Agreement for manufacturing services.

Fujitsu Semiconductor Limited - Agreements for the supply of product wafer foundry services, sort services and assembly and test services;

HuaHong Grace Semiconductor Manufacturing Corporation ("Grace") - Agreement for foundry services;

Semiconductor Manufacturing International Corporation ("SMIC") - Agreements for foundry services;

SK Hynix Inc. (“SK Hynix”). - Agreements for development and supply of certain products;

Skywater Technologies Inc. - Agreement for foundry services;

Taiwan Semiconductor Manufacture Company ("TSMC") - Agreement for foundry services;

United Microelectronics Corporation ("UMC") - Agreement for foundry services;

United Test and Assembly Center Ltd - Agreement for assembly and test services; and

Wuhan Xinxin Semiconductor Manufacturing Corporation ("XMC") - Agreement for foundry services;