<PAGE>1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington D.C. 20549


                                    FORM 10-Q

(Mark One)

[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934 for the quarterly period ended April 1, 1996 or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934 for the transition period from __________to__________.

Commission file number 1-10079
                       -------

                       CYPRESS SEMICONDUCTOR CORPORATION
- -------------------------------------------------------------------------------
              (Exact name of registrant as specified in its charter)

            Delaware                                     94-2885898 
   ----------------------------                 ---------------------------
   (State or other jurisdiction                       (I.R.S. employer
       of incorporation or                           identification No.)
          organization)


         3901 North First Street, San Jose, California      95134-1599
- -------------------------------------------------------------------------------
           (address of principal executive offices)         (Zip Code)

Registrant's telephone number, including area code:  (408) 943-2600
                                                    ----------------

                                 NOT APPLICABLE
- -------------------------------------------------------------------------------
    (Former name, former address and former fiscal year, if changed since
                                  last report)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for at least the past 90 days.

                         Yes  X                     No
                             ---                       ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                   April 1, 1996 (all one class):  79,519,000
                  --------------------------------------------



                                       1






<PAGE>2


                       CYPRESS SEMICONDUCTOR CORPORATION

                                   FORM 10-Q
                          Quarter Ended April 1, 1996  

                                     Index


Part I - Financial Information
- --------------------------------


Item 1.  Condensed Consolidated Financial Statements           Pages  3 - 8

Item 2.  Management's Discussion and Analysis                  Pages  9 - 12



Part II - Other Information
- --------------------------------


Item 1.  Legal Proceedings                                     Page  13

Item 6.  Exhibits and Reports on Form 8-K                      Pages 13
       
  

             


                                                   



 

      












                                        
       










                                       2





<PAGE>3

<TABLE>

                       CYPRESS SEMICONDUCTOR CORPORATION

                     CONDENSED CONSOLIDATED BALANCE SHEETS

                       (In thousands, except share data)
                                   (Unaudited)

<CAPTION>                                     
                                                       Apr. 1,     Jan. 1,
                                                        1996        1996
                                                     ----------  ----------
<S>                                                  <C>         <C>
               ASSETS

Current assets:
  Cash and cash equivalents                          $    1,090   $   9,487
  Short-term investments                                109,983     152,131
                                                     ----------  ----------
    Total cash, cash equivalents and 
      short-term investments                            111,073     161,618
  Accounts receivable, net of allowances of
      $2,479 at April 1, 1996 and $2,828 at
      January 1, 1996                                   101,536     108,587
  Inventories                                            36,858      28,978
  Other current assets                                   58,394      52,454
                                                     ----------  ----------
       Total current assets                             307,861     351,637
Property, plant and equipment (net)                     387,456     336,593
Other assets, including restricted investments
 of $43,379 at April 1, 1996 and $39,257 at     
 January 1, 1996                                         68,375      62,498
                                                     ----------  ----------
         Total assets                                $  763,692  $  750,728
                                                     ==========  ==========

   LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                   $   86,016  $   82,315
  Accrued liabilities                                    40,735      46,800
  Deferred income on sales to distributors               14,263      13,190
  Income taxes payable                                   26,828      18,752
                                                     ----------  ----------
       Total current liabilities                        167,842     161,057
Convertible subordinated notes                           96,452      95,879
Deferred income taxes                                    15,653      15,653
Other long-term liabilities                               5,881       6,040
                                                     ----------  ----------
         Total liabilities                              285,828     278,629
                                                     ----------  ----------



  
                                       3






<PAGE>4

                       CYPRESS SEMICONDUCTOR CORPORATION

               CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

                       (In thousands, except share data)
                                   (Unaudited)

                                                       Apr. 1,     Jan. 1,
                                                        1996        1996
                                                     ----------  ----------
<S>                                                  <C>         <C>
                                                 
Commitments and contingencies (Note 4)

Stockholders' equity:
  Preferred stock, $.01 par value, 5,000,000
    shares authorized; none issued and 
    outstanding                                              --          --
  Common stock, $.01 par value, 250,000,000
    shares authorized; 89,779,000 and
    88,924,000 issued; 79,519,000 and
    81,501,000 outstanding                                  898         889
  Additional paid-in capital                            297,070     292,713
  Retained earnings                                     296,739     262,462
                                                     ----------  ----------
                                                        594,707     556,064
  Less shares of common stock held in
    treasury, at cost: 10,260,000 at April 1, 1996
    and 7,423,000 at January 1, 1996                   (116,843)    (83,965)
                                                     ----------  ----------
       Total stockholders' equity                       477,864     472,099
                                                     ----------  ----------
         Total liabilities and stockholders'
           equity                                    $  763,692  $  750,728
                                                     ==========  ==========





     See accompanying notes to condensed consolidated financial statements.


 </TABLE>














                                       4 





<PAGE>5

<TABLE>
                       CYPRESS SEMICONDUCTOR CORPORATION

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                      (In thousands, except per share data)
                                   (Unaudited)


<CAPTION>
                                                Three Months Ended             
                                              ----------------------
                                                Apr. 1,     Apr. 3,
                                                 1996        1995
                                              ----------  ----------
<S>                                           <C>         <C>

Revenues                                      $  170,171  $  123,365
                                              ----------  ----------
Costs and expenses:
  Cost of revenues                                76,861      60,834
  Research and development                        21,416      15,671
  Selling, general and administrative             18,140      15,291
  Other non-recurring costs (Note 4)                  --      17,800
                                              ----------  ----------
     Total operating costs and expenses          116,417     109,596
                                              ----------  ----------
Operating income                                  53,754      13,769
Interest expense                                  (1,647)     (1,733)
Interest and other income                          1,873       2,303
                                              ----------  ----------
Income before income taxes                        53,980      14,339
Provision for income taxes                       (19,703)     (5,234)
                                              ----------  ----------
Net income                                    $   34,277  $    9,105
                                              ==========  ==========           

              

Net income per share:

    Primary                                   $     0.41  $     0.11
    Fully diluted                             $     0.39  $     0.11

Weighted average common and
  common equivalent shares
  outstanding:

    Primary                                       83,418      87,223
    Fully diluted                                 91,358      95,607           

              
   
  

     See accompanying notes to condensed consolidated financial statements.


</TABLE>
                      
                                       5





<PAGE>6

<TABLE>
                       CYPRESS SEMICONDUCTOR CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)
<CAPTION>
                                                         Three Months Ended
                                                       ----------------------
                                                         Apr. 1,     Apr. 3,
                                                          1996        1995
                                                       ----------  ----------
<S>                                                    <C>         <C>
Cash flows from operating activities:
 Net income                                            $   34,277  $    9,105
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Depreciation and amortization                           21,604      13,291
   Provision for other non-recurring costs                     --      17,800
   Non-cash interest and amortization of debt
    issuance costs                                            676         643  
   Changes in operating assets and liabilities:
    Receivables                                             7,051      (2,170)
    Inventories                                            (7,880)      2,214 
    Other assets                                           (8,630)     (5,585)
    Accounts payable and accrued liabilities               (2,523)     (5,186)
    Deferred income                                         1,073         585
    Income taxes payable and deferred income taxes          8,076        (624)
                                                       ----------  ----------
Net cash generated by operations                           53,724      30,073
                                                       ----------  ----------
Cash flows from investing activities:
  (Increase) Decrease in short-term investments (net)      42,148     (20,279)
  Acquisition of property, plant and equipment            (71,635)    (28,689)
                                                       ----------  ----------
Net cash used for investing activities                    (29,487)    (48,968) 
                                                       ----------  ----------
Cash flows from financing activities:
  Repurchase of common stock                              (32,878)         --
  Issuance of common stock                                  4,366      11,341
  Restricted investments related to building lease
    agreement                                              (4,122)     (9,800)
                                                       ----------  ----------
Net cash generated (used) by financing activities         (32,634)      1,541
                                                       ----------  ----------  

Net decrease in cash and cash equivalents                  (8,397)    (17,354)
Cash and cash equivalents, beginning of year                9,487      33,308
                                                       ----------  ----------
Cash and cash equivalents, end of quarter              $    1,090  $   15,954
                                                       ==========  ==========
</TABLE>


     See accompanying notes to condensed consolidated financial statements. 



                                       6





<PAGE>7

                       CYPRESS SEMICONDUCTOR CORPORATION


              Notes to Condensed Consolidated Financial Statements
                                  (Unaudited)


1.  Interim Statements

In the opinion of management, the accompanying, unaudited condensed
consolidated financial statements contain all adjustments (consisting solely of
normal recurring adjustments) necessary to present fairly the financial
information included therein.  While the Company believes that the disclosures
are adequate to make the information not misleading, it is suggested that this
financial data be read in conjunction with the audited financial statements and
notes thereto for the year ended January 1, 1996 included in the Company's 1995
Annual Report on Form 10-K.

For interim financial reporting purposes, the Company reports on a 13-week
quarter.  The results of operations for the three month period ended April 1,
1996 are not necessarily indicative of the results to be expected for the full
year.

2.  Inventories

                                               April 1,   January 1,
                                                 1996        1996
                                              ----------  ----------
     Raw materials                            $   10,160  $    9,859
     Work in process                              16,954      12,682
     Finished goods                                9,744       6,437
                                              ----------  ----------
                                              $   36,858  $   28,978
                                              ==========  ==========

3.  Net Income Per Share

Net income per share is computed using the weighted average number of shares of
outstanding common stock and common equivalent shares, when dilutive.  Common
equivalent shares include shares issuable under the Company's stock option
plans as determined by the treasury stock method.  Fully diluted earnings per
share assumes full conversion of the convertible subordinated notes into common
shares and the elimination of the related interest requirements (net of income
taxes).


4.  Impact of Litigation

In the normal course of business, the Company receives and makes inquiries with
regard to possible patent infringement.  Where deemed advisable, the Company
may seek or extend licenses or negotiate settlements.

In May 1995, in a case before the U.S. District Court in Dallas, Texas, a jury
delivered a verdict of $17.8 million against the Company in a patent
infringement lawsuit filed by Texas Instruments ("TI").  In August 1995, the
judge reversed the decision stating TI failed to prove that Cypress infringed

                                       7





<PAGE>8

on TI's patents covering the plastic encapsulation process used to package
semiconductor devices.  TI has filed an appeal, in which the Company will
continue to defend itself.  In March 1995, the Company recorded a one-time pre-
tax charge of $17.8 million with respect to the original decision.  The Company
continues to maintain this reserve pending further resolution of this matter.  


In June 1995, the U.S. District Court of Northern California dismissed by a
summary judgement the class-action lawsuit filed against the Company and
certain of its officers.  The suit filed was for alleged violations of the
Securities Exchange Act of 1934 and certain provisions of state law regarding
disclosure of short-term business prospects.  The plaintiffs have filed for an
appeal, in which the Company will continue to defend itself.

The Company will vigorously defend itself in these matters and, subject to the
inherent uncertainties of litigation and based upon discovery completed to
date, management believes that the resolution of these matters will not have a
material adverse impact on the Company's financial position or results of
operations.  However, should the outcome of either of these actions be
unfavorable, the Company may be required to pay damages and other expenses,
which could have a material adverse effect on the Company's financial position
and results of operations.  In addition, the Company could be required to alter
certain of its production processes or products as a result of these matters.

In June 1995, Advanced Micro Devices ("AMD") charged the Company with patent
infringement and filed suit in the U.S. District Court in Delaware.  The suit
claims that the Company infringed several of AMD's Programmable Logic Patents. 
In November 1995, the Company filed a patent infringement action against AMD in
the U.S. District Court for the District of Minnesota.  The Company alleged 
infringement by AMD of a number of the Company's patents in this action.  In
April 1996, the Company and AMD signed a cross-licensing agreement terminating
the patent litigation between the companies.  The agreement allows each company
to continue to produce its own products with no threat of future patent
lawsuits by the other company.


                               



















                                       8





<PAGE>9
 
                       MANAGEMENT'S DISCUSSION AND ANALYSIS
                            OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS


     This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended.  Actual results could differ
materially from those projected in the forward-looking statements as a result
of the factors set forth in "Factors Affecting Future Results" and elsewhere in
this Report.


RESULTS OF OPERATIONS:
- --------------------------

Revenues for the quarter ended April 1, 1996 increased 37.9% over the
comparable period a year ago, increasing to $170.2 million in 1996 compared to
$123.4 million in 1995.  The increase in revenues was primarily due to sales
growth in the Company's Memory Products Division ("MPD") and Data
Communications Division ("DCD").  MPD's revenues grew to $104.1 million in the
first quarter of 1996 compared to $64.5 million during the same fiscal 1995
quarter.  MPD 's revenue growth was partly due to higher average selling prices
("ASPs") in the Static Random Access Memory ("SRAM") products, with some shift
into the 1 megabit line of products and partially due to higher sales volume,
particularly into the Telecommunication and Datacommunication markets. 
Although the Company experienced higher ASPs in its sale of SRAM products in
the first quarter of fiscal year 1996 in comparison to the comparable quarter a
year ago, more recently these products have experienced a reduction in ASPs and
the Company expects this trend to continue in the near term.  The decrease in
ASPs is caused by overall market demand softness partly attributable to over
supply and the resulting inventory level correction by the end customers.  The
greater availability of products due to excess supply has also changed the
ordering cycle of customers due to their expectation of immediate product
availability or at least the acceptability of much shorter leadtimes.  The
continuation of these factors in the future could have a materially adverse
effect on the Company's results of operations.  This increase in sales volume
allowed DCD's revenues to grow to $25.5 million in the first quarter of fiscal
year 1996 compared to $20.5 million in the comparable 1995 quarter.  Although
the ASP's of DCD's line of products continued to decline, the increase in sales
volume more than offset the drop in ASP's.

The Company's cost of revenues as a percentage of revenues for the quarter
ended April 1, 1996 decreased to 45.2% compared to 49.3% in the comparable
period in 1995.  Manufacturing costs as a percentage of revenues continued to
decline due to increased sales volume, resulting in lower fixed costs per unit,
a die size reduction program in the Company's domestic wafer fabrication
plants, and improved manufacturing efficiencies.  A change in product mix,
especially in the Memory Products and Datacommunications Divisions, also
contributed to lower cost of revenues in the first quarter of 1996 as the sales
volume shifted to products yielding better margins.






                                      9






<PAGE>10

Research and development ("R & D") expenses as a percent of revenues decreased
slightly to 12.6% for the quarter ended April 1, 1996, compared to 12.7% for 
the comparable period in 1995.  Although actual R & D spending during the first
three months of 1996 increased $5.7 million over the comparable period a year 

ago, its rate of growth has been less than the rate of growth in revenues.  The
Company expects R & D spending to continue to increase in absolute dollars as
the Company increases its activities in its new and existing design centers to
develop new products and process technologies.  

Selling, general and administrative ("SG&A") expenses as a percent of revenues
for the quarter ended April 1, 1996 decreased to 10.7%, compared to 12.4% in 
the same period last year.  Although absolute spending in SG&A increased from
the prior year, the rate of growth has been less than the rate of growth in
revenues.  The increase in absolute spending for SG&A is primarily due to
growing headcount and associated spending in sales and marketing as the Company
continues its efforts to increase revenue by penetrating new markets and
supporting its existing line of products.  The Company expects absolute 
spending in sales and marketing to continue to increase as a result of the
Company's efforts to sustain revenue growth.  The Company also expects absolute
spending in general and administrative expenses to grow moderately in the
future in order to maintain and support the Company's growth.

Operating income for the quarter ended April 1, 1996 was $53.8 million, or
31.6% of revenues, compared with $13.8 million, or 11.1% of revenues in the
comparable period in 1995.  During the first quarter of 1995, the Company
recorded a one-time charge of $17.8 million ($11.3 million net of taxes)
related to the verdict issued against the Company in the patent infringement
lawsuit filed by Texas Instruments.  Although the verdict was reversed in favor
of the Company in August 1995, the Company continues to hold the reserve
pending further resolution of this matter.  Without the one-time charge,
operating income for the first quarter of 1995 would have been $31.6 million,
or 25.6% of revenues.

For the quarter ended April 1, 1996, the Company recorded net interest and
other income of $0.2 million compared to net interest and other income of $0.6
million in the comparable period of 1995.  Although the average cash and short
term investment balance during the first quarter of 1996 was significantly less
than the average balance during the first quarter of the prior year, the return
on investments increased due to a stronger bond market.  


FACTORS AFFECTING FUTURE RESULTS:
- -----------------------------------

The Company believes that its future operating results will continue to be
subject to variations based on a wide variety of factors.  Such factors
include, but are not limited to: general economic conditions, the cyclical
nature of the semiconductor industry and the markets addressed by the Company's
products such as networking, computer and telecommunications markets, failure
of expected growth in demand for, or areas of expected new demand for,
semiconductor products to materialize, the availability and extent of
utilization of manufacturing capacity, fluctuations in manufacturing yields,
price erosion, competitive factors, the timing of new product introductions, 

                                      10






<PAGE>11

product obsolescence and the ability to develop and implement new technologies
including the ramp of the Company's RAM3 process to full commercial production.

The Company is also dependent on subcontract vendors for a portion of the
assembly and test manufacturing of its products, which presents risks including
the lack of guaranteed production capacity, delay in delivery, susceptibility
to disruption in supply, and reduced control over product cost, adverse weather
conditions, and manufacturing yields.  The Company's operating results could
also be impacted by sudden fluctuations in customer requirements, currency
exchange rate fluctuations and other economic conditions affecting customer
demand and the cost of operations in one or more of the global markets in which
the Company does business.  Typically, the Company requires new orders, in
addition to its existing backlog, to meet each quarter's revenue plan.  As a
participant in the semiconductor industry, the Company operates in a
technologically advanced, rapidly changing and highly competitive environment. 
While the Company cannot predict what effect these and other factors will have
on the Company, they could result in significant volatility in the Company's
future performance.  To the extent the Company's performance may not meet
expectations published by external sources, public reaction could result in a
sudden and significantly adverse impact on the market price of the Company's
securities, particularly on a short-term basis.

The Company's headquarters and some manufacturing facilities are located near
major earthquake faults.  In the event of a major earthquake, the Company could
suffer damages which could materially and adversely affect the operating
results and financial condition of the Company.

Current pending litigation and claims are set forth in Note 4 of the Notes to
Condensed Consolidated Financial Statements.  The Company will vigorously
defend itself in these matters and, subject to the inherent uncertainties of
litigation and based upon discovery completed to date, management believes that
the resolution of these matters will not have a material adverse impact on the
Company's financial position or results of operations.  However, should the
outcome of any of the actions be unfavorable, the Company may be required to
pay damages and other expenses, which could have a material adverse effect on
the Company's financial position and results of operations.  In addition, the
Company could be required to alter certain of its production processes or
products as a result of these matters.
 

LIQUIDITY AND CAPITAL RESOURCES:
- ---------------------------------
 
The Company's cash, cash equivalents and short-term investments totaled $111.1
million at April 1, 1996, a decrease of $50.5 million compared to the end of
1995.  The decrease in cash, cash equivalents and short-term investments is
primarily due to the purchase of capital equipment and the Company's repurchase
of its common stock.

During the first quarter of fiscal 1996, the Company generated $53.7 million in
cash from operations, compared to $30.1 million generated during the comparable
period in 1995.  A majority of the increase in cash from operations is
attributable to the significant increase in revenues and earnings recorded
during the first quarter of 1996 compared to the first quarter of 1995.


                                      11






<PAGE>12

Cash used for investing activities was $29.5 million for the three month period
ending April 1, 1996 compared to a cash use for investing activities of $49.0
million for the comparable period in 1995.  During the first quarter of 1996, 
the Company acquired additional property, plant and equipment totalling $71.6
million.  The additions primarily related to increasing capacity in the wafer
producing fabrication facilities in Minnesota, Texas and San Jose.  In
addition, the Company increased the level of capital equipment purchases for 
its new assembly and test facility in the Philippines.  Capital purchases for
the remainder of fiscal 1996 are expected to be approximately $175.0 million as
the Company continues to buy equipment to expand capacity, particularly in
backend manufacturing.  Offsetting the purchases of capital equipment was the
conversion of short-term investments into cash of $42.1 million.  A majority of
the cash was used to pay for capital equipment and to fund the Company's
repurchase of its common stock.

Cash used for financing activities in the first quarter of 1996 was $32.6
million compared to cash generated from financing activities of $1.5 million in
the comparable period in 1995.  During the first quarter of 1996, the Company
completed its stock repurchase program which began in the fourth quarter of
1995 by repurchasing 2.6 million shares of its own common stock for $32.9
million.  The Company also received $4.4 million related to the issuance of
common stock through its Employee Stock Purchase Program and the Employee Stock
Option Program.  Due to the Company's relatively lower stock price, this
quarter's receipts from such issuances were significantly less than the $11.3
million received during the first quarter of 1995. 

In May 1995, in a case before the District Court in Dallas, Texas, a jury
delivered a verdict of $17.8 million against the Company in a patent
infringement lawsuit filed by Texas Instruments.  In August 1995, the judge
reversed the decision.  The plaintiff has filed an appeal which is pending.  In
the first quarter of 1995, the Company recorded a one-time pretax charge of
$17.8 million with respect to the original decision.  The Company continues to
maintain this reserve pending further resolution of this matter.

In 1994 and April 1995, the Company entered into certain operating lease
agreements with respect to its office and manufacturing facilities in San Jose
and Minnesota.  These agreements require quarterly payments which vary based on
the London interbank offering rate (LIBOR).  These leases provide the Company
with the option of either acquiring the properties at their original cost or
arranging for the property to be acquired at the end of the respective lease
terms.  The Company must maintain a specific level of restricted cash or
investments to serve as collateral for these leases and maintain compliance
with certain financial covenants.  In the first three months of 1996, the
Company added $4.1 million to the restricted investments, bringing the total to
$43.4 million.  In April 1996, the Company entered into an additional operating
lease agreement with respect to two office facilities in San Jose and added
$13.6 million to its restricted investments.  These restricted investments are
classified as non-current assets on the balance sheet.

While the Company plans to fund working capital requirements through existing
capital resources and internally generated cash flow, the Company may, based
upon favorable market conditions, choose to raise additional capital through
the issuance of equity or debt securities of the Company.  The Company may also
from time to time consider using available funds to acquire complementary
technologies and businesses.

                                      12





<PAGE>13


 
                          PART II - OTHER INFORMATION



ITEM 1.  The information required by this item is included in Part I in Note 4
         of Notes to the Condensed Consolidated Financial Statements.

  

ITEM 6:

  (a)  Exhibit  -  10.5   "Amended and Restated 1994 Stock Option Plan"

       Exhibit  -  10.10  "1996 Key Employee Bonus Plan Agreement (KEBP)"

       Exhibit  -  11.1   "Computation of Net Income Per Common Share and
                           Dilutive Common Share Equivalents"

       Exhibit  -  27     "Financial Data Schedule"


  (b)  Reports on Form 8-K - None  
                    




































                                      13





<PAGE>14


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                    CYPRESS SEMICONDUCTOR CORPORATION


Date:       May 16, 1996            /s/  T.J. Rodgers
      -----------------------       ---------------------------------
                                    T.J. Rodgers
                                    President and Chief Executive
                                    Officer


                                    /s/  Emmanuel Hernandez
                                    ---------------------------------
                                    Emmanuel Hernandez
                                    Vice President, Finance and
                                    Administration and Chief Financial
                                    Officer

                   


























                                      14


































































<PAGE>1

                THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS 
              COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER
                    THE SECURITIES ACT OF 1933, AS AMENDED.


                       CYPRESS SEMICONDUCTOR CORPORATION
                             1994 STOCK OPTION PLAN

                 (As amended and Restated on January 25, 1996)

1. PURPOSES OF THE PLAN.  The purposes of this Stock Option Plan are:

     to attract and retain the best available personnel for positions of
     substantial responsibility;

     to provide additional incentive to Employees and Consultants and Outside
     Directors; and 

     to promote the success of the Company's business.  

2. COMPONENTS OF THE PLAN.  The Plan provides for:

     the discretionary granting of Options to Employees and Consultants, which
     Options may be either Incentive Stock Options or Nonstatutory Stock
     Options, as determined by the Administrator at the time of grant; and

     the grant of Nonstatutory Stock Options to Outside Directors pursuant to
     an automatic, non-discretionary formula.

3. DEFINITIONS.  As used herein, the following definitions shall apply:

     (a)  "ADMINISTRATOR" means the Board or any of its Committees as shall be
           administering the Plan, in accordance with Section 5 of the Plan.

     (b)  "APPLICABLE LAWS" means the legal requirements relating to the
           administration
 of stock option plans under state corporate and
           securities laws and the Code.

     (c)  "BOARD" means the Board of Directors of the Company.

     (d)  "CODE" means the Internal Revenue Code of 1986, as amended.

     (e)  "COMMITTEE"  means a Committee appointed by the Board in accordance
           with Section 5 of the Plan.

     (f)  "COMMON STOCK" means the Common Stock of the Company.

     (g)  "COMPANY" means Cypress Semiconductor Corporation, a Delaware
           corporation.

     (h)  "CONSULTANT" means any person, including an advisor, engaged by the
           Company or a Parent or Subsidiary to render services and who is
           compensated for such services; provided, however, that the term
           "Consultant" shall not include Outside Directors, unless such
           Outside Directors are compensated for services to the Company other
           than through payment of director's fees.







<PAGE>2

     (i)  "CONTINUOUS STATUS AS A DIRECTOR" means that the Director
           relationship is not interrupted or terminated.

     (j)  "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT"  means that the
           employment or consulting relationship with the Company or any Parent
           or Subsidiary is not interrupted or terminated.  Continuous Status
           as an Employee or Consultant shall not be considered interrupted in
           the case of: (i) any leave of absence approved by the Company,
           including sick leave, military leave, or any other personal leave;
           provided, however, that for purposes of Incentive Stock Options, no
           such leave may exceed ninety (90) days, unless reemployment upon the
           expiration of such leave is guaranteed by contract (including
           certain Company policies) or statute; provided, further, that on the
           ninety-first (91st) day of any such leave (where reemployment is not
           guaranteed by contract or statute) the Optionee's Incentive Stock
           Option shall cease to be treated as an Incentive Stock Option and
           will be treated for tax purposes as a Nonstatutory Stock Option; or
           (ii) transfers between locations of the Company or between the
           Company, its Parent, its Subsidiaries or its successor.

     (k)  "DIRECTOR" means a member of the Board.

     (l)  "DISABILITY" means total and permanent disability as defined in
           Section 22(e)(3) of the Code.

     (m)  "EMPLOYEE" means any person, including Officers and Directors,
           employed by the Company or any Parent or Subsidiary of the Company.
           Neither service as a Director nor payment of a director's fee by the
           Company shall be sufficient to constitute "employment" by the
           Company.

     (n)  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

     (o)  "EXISTING DIRECTORS" means members of the Board on October 12, 1988.

     (p)  "FAIR MARKET VALUE" means, as of any date, the value of Common Stock
           determined as follows:

          (i) If the Common Stock is listed on any established stock exchange
              or a national market system, including without limitation the
              National Market System of the National Association of Securities
              Dealers, Inc. Automated Quotation ("NASDAQ") System, the Fair
              Market Value of a Share of Common Stock shall be the closing sale
              price for such stock (or the mean of the closing bid and asked
              prices, if no sales were reported), as quoted on such exchange
              (or the exchange with the greatest volume of trading in Common
              Stock) or system on the date of such determination (or, in the
              event such date is not a trading day, the trading day immediately
              prior to the date of such determination), as reported in The Wall
              Street Journal or such other source as the Administrator deems
              reliable; or












<PAGE>3

         (ii) If the Common Stock is quoted on the NASDAQ system (but not on
              the National Market System thereof) or is regularly quoted by a
              recognized securities dealer but selling prices are not
              reported, the Fair Market Value of a Share of Common Stock shall
              be the mean of the closing bid and asked prices for such stock
              on the date of such determination (or, in the event such date is
              not a trading day, the trading day immediately prior to the date
              of such determination), as reported in The Wall Street Journal
              or such other source as the Administrator deems reliable; or

        (iii) In the absence of an established market for the Common Stock, the
              Fair Market Value shall be determined in good faith by the
              Administrator.

     (q)  "INCENTIVE STOCK OPTION" means an Option intended to qualify as an
           incentive stock option within the meaning of Section 422 of the Code
           and the regulations promulgated thereunder.

     (r)  "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify
           as an Incentive Stock Option.


     (s)  "NOTICE OF GRANT" means a written notice evidencing certain terms and
           conditions of an individual Option grant.  The Notice of Grant is
           part of the Option Agreement.

     (t)  "OFFICER" means a person who is an officer of the Company within the
           meaning of Section 16 of the Exchange Act and the rules and
           regulations promulgated thereunder.

     (u)  "OPTION" means a stock option granted pursuant to the Plan or the
           Terminated Plans.

     (v)  "OPTION AGREEMENT" means a written agreement between the Company and
           an Optionee evidencing the terms and conditions of an individual
           Option grant.  The Option Agreement is subject to the terms and
           conditions of the Plan.

     (w)  "OPTION EXCHANGE PROGRAM" means a program whereby outstanding options
           are surrendered in exchange for options with a lower exercise price.

     (x)  "OPTIONED STOCK" means the Common Stock subject to an Option.

     (y)  "OPTIONEE" means an Employee, Consultant or Outside Director who
           holds an outstanding Option.

     (z)  "OUTSIDE DIRECTOR" means a Director who is not an Employee or
           Consultant.

    (aa)  "PARENT" means a "parent corporation", whether now or hereafter
           existing, as defined in Section 424(e) of the Code.

    (bb)  "PLAN" means this 1994 Stock Option Plan.










<PAGE>4

    (cc)  "RULE 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
           Rule 16b-3, as in effect when discretion is being exercised with
           respect to the Plan.

    (dd)  "SHARE" means a share of the Common Stock, as adjusted in accordance
           with Section 14 of the Plan.

    (ee)  "SUBSIDIARY" means a "subsidiary corporation", whether now or
           hereafter existing, as defined in Section 424(f) of the Code.

    (ff)  "TERMINATED PLANS" means the Company's 1985 Incentive Stock Option
           Plan and 1988 Directors' Stock Option Plan, which are terminated
           upon adoption of, and superseded by, this Plan; however, outstanding
           Options under the Terminated Plans shall continue in full force in
           effect, subject to the provisions of such Options and this Plan.

4. STOCK SUBJECT TO THE PLAN.   Subject to Section 14 of the Plan, the total
   number of Shares reserved and available for issuance under the Plan is
   3,455,791 Shares (pre-split) (including 455,791 Shares (pre-split)
   previously authorized but unissued under the Terminated Plans), plus shares
   subject to options outstanding under the Terminated Plans at the time of
   adoption of this plan which are subsequently forfeited in connection with
   termination of employment or other failure to exercise, increased on the
   first day of each new fiscal year of the Company from and including the 1995
   fiscal year by a number of Shares equal to 4.5% of the number of Shares
   outstanding as of the last business day preceding each such first day of
   each new fiscal year.  However, the number of Shares available for issuance
   pursuant to Incentive Stock Options shall not include the foregoing annual
   increase, which shall be used solely for Nonstatutory Stock Options.

        Subject to Section 14 of the Plan, if any Shares that have been
   optioned under an Option (whether granted under this Plan or the Terminated
   Plans) cease to be subject to such Option (other than through exercise of
   the Option), or if any Option granted hereunder or thereunder is forfeited,
   or any Option otherwise terminates prior to the issuance of Common Stock to
   the participant, the Shares that were subject to such Option shall again be
   available for distribution in connection with future Options under the Plan.
   Shares that have actually been issued under the Plan upon exercise of an
   Option shall not in any event be returned to the Plan and shall not become
   available for future distribution under the Plan.

5. ADMINISTRATION OF THE PLAN.

   (a) PROCEDURE.

       (i) MULTIPLE ADMINISTRATIVE BODIES.  If permitted by Rule 16b-3, the
           Plan may be administered by different bodies with respect to (A)
           Directors and Officers, and (B) Employees and Consultants who are
           neither Directors nor Officers.

      (ii) ADMINISTRATION WITH RESPECT TO DISCRETIONARY OPTION GRANTS TO
           INDIVIDUALS SUBJECT TO SECTION 16(b).  With respect to discretionary
           Option grants made to Employees and Consultants who are also
           Officers or Directors subject to Section 16(b) of the Exchange Act,
           the Plan shall be administered by (A) the Board, if the Board may
           administer the Plan in compliance with the rules governing a plan







<PAGE>5

           intended to qualify as a discretionary plan under Rule 16b-3, or (B)
           a committee designated by the Board to administer the Plan, which
           committee shall be constituted to comply with the rules governing a
           plan intended to qualify as a discretionary plan under Rule 16b-3.
           Once appointed, such Committee shall continue to serve in its
           designated capacity until otherwise directed by the Board.  From
           time to time the Board may increase the size of the Committee and
           appoint additional members, remove members (with or without cause)
           and substitute new members, fill vacancies (however caused), and
           remove all members of the Committee and thereafter directly
           administer the Plan, all to the extent permitted by the rules
           governing a plan intended to qualify as a discretionary plan under
           Rule 16b-3.

     (iii) ADMINISTRATION WITH RESPECT TO DISCRETIONARY OPTION GRANTS TO OTHER
           PERSONS.  With respect to discretionary Option grants made to       

           Employees or Consultants who are neither Directors nor Officers of
           the Company, the Plan shall be administered by (A) the Board or (B)
           a committee designated by the Board, which committee shall be
           constituted to satisfy Applicable Laws.  Once appointed, such
           Committee shall serve in its designated capacity until otherwise
           directed by the Board.  The Board may increase the size of the
           Committee and appoint additional members, remove members (with or
           without cause) and substitute new members, fill vacancies (however
           caused), and remove all members of the Committee and thereafter
           directly administer the Plan, all to the extent permitted by
           Applicable Laws.

      (iv) ADMINISTRATION WITH RESPECT TO AUTOMATIC GRANTS TO OUTSIDE          

           DIRECTORS.  Automatic Grants to Outside Directors shall be pursuant
           to a non-discretionary formula as set forth in Section 11 hereof and
           therefore shall not be subject to any discretionary administration.

   (b) POWERS OF THE ADMINISTRATOR.  Subject to the provisions of the Plan,
       and in the case of a Committee, subject to the specific duties
       delegated by the Board to such Committee, the Administrator shall
       have the authority, in its discretion:

       (i) to determine the Fair Market Value of the Common Stock, in
           accordance with Section 3(p) of the Plan;

      (ii) to select the Consultants and Employees to whom Options may be
           granted hereunder;

     (iii) to determine whether and to what extent Options are granted
           hereunder;

      (iv) to determine the number of shares of Common Stock to be covered by
           each Option granted hereunder;

       (v) to approve forms of agreement for use under the Plan;










<PAGE>6

      (vi) to determine the terms and conditions, not inconsistent with the
           terms of the Plan, of any Option granted hereunder.  Such terms and
           conditions include, but are not limited to, the exercise price, the
           time or times when Options may be exercised (which may be based on
           performance criteria), any vesting acceleration or waiver of
           forfeiture restrictions, and any restriction or limitation regarding
           any Option or the shares of Common Stock relating thereto, based in
           each case on such factors as the Administrator, in its sole
           discretion, shall determine;

     (vii) to reduce the exercise price of any Option to the then current Fair
           Market Value if the Fair Market Value of the Common Stock covered by
           such Option shall have declined since the date the Option was
           granted;

    (viii) to construe and interpret the terms of the Plan and Options granted
           pursuant to the Plan;

      (ix) to prescribe, amend and rescind rules and regulations relating to
           the Plan, including rules and regulations relating to sub-plans
           established for the purpose of qualifying for preferred tax
           treatment under foreign tax laws;

       (x) to modify or amend each Option (subject to Section 16(c) of the
           Plan);

      (xi) to authorize any person to execute on behalf of the Company any
           instrument required to effect the grant of an Option previously
           granted by the Administrator;

     (xii) to institute an Option Exchange Program;

    (xiii) to determine the terms and restrictions applicable to Options; and

     (xiv) to make all other determinations deemed necessary or advisable for
           administering the Plan.

   (c) EFFECT OF ADMINISTRATOR'S DECISION.  The Administrator's decisions,
       determinations and interpretations shall be final and binding on all
       Optionees and any other holders of Options.

6. ELIGIBILITY.  

   (a) DISCRETIONARY STOCK OPTIONS.  Nonstatutory Stock Options may be granted
       to Employees and Consultants.  Incentive Stock Options may be granted
       only to Employees.  If otherwise eligible, an Employee or Consultant who
       has been granted an Option may be granted additional Options.

   (b) OUTSIDE DIRECTOR STOCK OPTIONS.  Outside Directors shall be eligible to
       receive only Nonstatutory Stock Options pursuant to Section 11 hereof.

7. LIMITATIONS.

   (a) Each Option shall be designated in the Notice of Grant or Option
       Agreement as either an Incentive Stock Option or a Nonstatutory Stock
       Option.  However, notwithstanding such designations, to the extent that
       the aggregate Fair Market Value:






<PAGE>7

       (i) of Shares subject to an Optionee's incentive stock options granted
           by the Company, any Parent or Subsidiary, which 

      (ii) become exercisable for the first time during any calendar year
           (under all plans of the Company or any Parent or Subsidiary) 

       exceeds $100,000, such excess Options shall be treated as Nonstatutory
       Stock Options.  For purposes of this Section 7(a), incentive stock
       options shall be taken into account in the order in which they were
       granted, and the Fair Market Value of the Shares shall be determined as
       of the time of grant.

   (b) Neither the Plan nor any Option shall confer upon an Optionee any right
       with respect to continuing the Optionee's employment or consulting
       relationship or tenure as a director with the Company, nor shall they
       interfere in any way with the Optionee's, the Company's, or the
       Company's stockholders', right to terminate such employment or
       consulting relationship or tenure as a director with the Company at any
       time, with or without cause.

   (c) The following limitations shall apply to grants of Options to Employees:

       (i) No Employee shall be granted, in any fiscal year of the Company,
           Options to purchase more than 500,000 Shares.

      (ii) The foregoing limitation shall be adjusted proportionately in
           connection with any change in the Company's capitalization as
           described in Section 14(a). 

     (iii) If an Option is canceled (other than in connection with a
           transaction described in Section 14), the canceled Option will be
           counted against the limit set forth in Section 7(c)(i).  For this
           purpose, if the exercise price of an Option is reduced, the
           transaction will be treated as a cancellation of the Option and the
           grant of a new Option.

8. TERM OF PLAN.  The Plan shall become effective upon the date, in 1994, of
   its approval by the stockholders of the Company.  It shall continue in
   effect for a term of ten (10) years unless terminated earlier under Section
   16 of the Plan.

9. TERM OF OPTION.  The term of each Option shall be ten (10) years from the
   date of grant or such shorter term as may be provided in the Notice of Grant
   or Option Agreement.  In the case of an Incentive Stock Option granted to an
   Optionee who, at the time the Incentive Stock Option is granted, owns stock
   representing more than ten percent (10%) of the voting power of all classes
   of stock of the Company or any Parent or Subsidiary, the term of the
   Incentive Stock Option shall be five (5) years from the date of grant or
   such shorter term as may be provided in the Notice of Grant or Option
   Agreement.

10. OPTION EXERCISE PRICE AND CONSIDERATION.

   (a) EXERCISE PRICE.  The per share exercise price for the Shares to be
       issued pursuant to exercise of an Option shall be determined by the
       Administrator, subject to the following:







<PAGE>8

       (i) In the case of an Incentive Stock Option

         (A) granted to an Employee who, at the time the Incentive Stock Option
             is granted, owns stock representing more than ten percent (10%) of
             the voting power of all classes of stock of the Company or any
             Parent or Subsidiary, the per Share exercise price shall be no
             less than 110% of the Fair Market Value per Share on the date of
             grant.

         (B) granted to any Employee other than an Employee described in
             paragraph (A) immediately above, the per Share exercise price
             shall be no less than one hundred (100%) of the Fair Market Value
             per Share on the date of grant.

      (ii) In the case of a Nonstatutory Stock Option, the per Share exercise
           price shall be no less than eighty-five percent (85%) of Fair Market
           Value per Share on the date of grant.

   (b) WAITING PERIOD AND EXERCISE DATES.  At the time an Option is granted,
       the Administrator shall fix the period within which the Option may be
       exercised and shall determine any conditions which must be satisfied
       before the Option may be exercised.  In so doing, the Administrator may
       specify that an Option may not be exercised until the completion of a
       service period.

   (c) FORM OF CONSIDERATION.  Except with respect to automatic stock option
       grants to Outside Directors, the Administrator shall determine the
       acceptable form of consideration for exercising an Option, including the
       method of payment.  In the case of an Incentive Stock Option, the
       Administrator shall determine the acceptable form of consideration at
       the time of grant.  Such form of consideration shall be set forth in the
       Notice of Grant or Option Agreement and may, as determined by the
       Administrator, consist entirely of:

       (i) cash;

      (ii) check;

     (iii) promissory note;

      (iv) other Shares which (A) in the case of Shares acquired upon exercise
           of an option, have been owned by the Optionee for more than six
           months on the date of surrender, and (B) have a Fair Market Value on
           the date of surrender equal to the aggregate exercise price of the
           Shares as to which said Option shall be exercised;

       (v) delivery of a properly executed exercise notice together with such
           other documentation as the Administrator and the broker, if
           applicable, shall require to effect an exercise of the Option and
           delivery to the Company of the sale or loan proceeds required to pay
           the exercise price;

      (vi) any combination of the foregoing methods of payment; or

     (vii) such other consideration and method of payment for the issuance of
           Shares to the extent permitted by Applicable Laws.







<PAGE>9

11. AUTOMATIC STOCK OPTION GRANTS TO OUTSIDE DIRECTORS.  

   (a) PROCEDURE FOR GRANTS.  The provisions set forth in this Section 11 shall
       not be amended more than once every six months, other than to comport
       with changes in the Code, the Employee Retirement Income Security Act of
       1974, as amended, or the rules thereunder.  All grants of Options to
       Outside Directors hereunder shall be automatic and non-discretionary and
       shall be made strictly in accordance with the following provisions:

       (i) No person shall have any discretion to select which Outside
           Directors shall be granted Options or to determine the number of
           Shares to be covered by Options granted to Outside Directors.

      (ii) Each Outside Director shall be automatically granted an Option to
           purchase 80,000 Shares (the "First Option") upon the date on which
           such person first becomes a Director, whether through election by
           the stockholders of the Company or appointment by the Board of
           Directors to fill a vacancy.

     (iii) After the First Option has been granted to an Outside Director, such
           Outside Director shall thereafter be automatically granted an Option
           to purchase 20,000 Shares (a "Subsequent Option") on a date one year
           after the date of grant of the First Option and on the same date
           each year thereafter.

      (iv) Notwithstanding the provisions of subsections (ii) and (iii) hereof,
           in the event that an automatic grant hereunder would cause the
           number of Shares subject to outstanding Options plus the number of
           Shares previously purchased upon exercise of Options to exceed the
           number of Shares available for issuance under the Plan, then each
           such automatic grant shall be for that number of Shares determined
           by dividing the total number of Shares remaining available for grant
           by the number of Outside Directors on the automatic grant date.  Any
           further grants shall then be deferred until such time, if any, as
           additional Shares become available for grant under the Plan.

       (v) The terms of an Option granted hereunder shall be as follows:

           (1) the term of the Option shall be ten (10) years.

           (2) the Option shall be exercisable only while the Outside Director
               remains a Director of the Company, except as set forth in
               subsection (c) hereof.

           (3) the exercise price per Share shall be 100% of the fair market
               value per Share on the date of grant of the Option.

           (4) the Option shall become exercisable as follows:

               (A) If it is a First Option, it shall become exercisable
                   cumulatively in installments of 16,000 Shares per year
                   beginning on the date one year after such Director's
                   election to the Board of Directors.










<PAGE>10

               (B) If it is a Subsequent Option, it shall become exercisable
                   cumulatively in installments of 4,000 Shares per year
                   beginning on the date one year after the date on which it
                   was granted.

   (b) CONSIDERATION FOR EXERCISING OUTSIDE DIRECTOR STOCK OPTIONS.  The
       consideration to be paid for the Shares to be issued upon exercise of an
       automatic Outside Director Option shall consist entirely of cash, check,
       other Shares of Common Stock which (i) either have been owned by the
       Optionee for more than six (6) months or were not acquired, directly or
       indirectly from the Company and (ii) have a fair market value on the
       date of surrender equal to the aggregate exercise price of the Shares as
       to which said Option shall be exercised, or any combination of such
       methods of payment.

   (c) POST-DIRECTORSHIP EXERCISABILITY.

       (i) TERMINATION OF STATUS AS A DIRECTOR.   If an Outside Director ceases
           to serve as a Director, he may, but only within ninety days (90)
           after the date he ceases to be a Director of the Company, exercise
           his Option to the extent that he was entitled to exercise it at the
           date of such termination.  To the extent that he was not entitled to
           exercise an Option at the date of such termination, or if he does
           not exercise such Option (which he was entitled to exercise) within
           the time specified herein, the Option shall terminate.

      (ii) DISABILITY OF DIRECTOR.  Notwithstanding the provisions of Section
           11(c)(i) above, in the event a Director is unable to continue his
           service as a Director with the Company as a result of his
           Disability, he may, but only within six (6) months from the date of
           termination, exercise his Option to the extent he was entitled to
           exercise it at the date of such termination.  To the extent that he
           was not entitled to exercise the Option at the date of termination,
           or if he does not exercise such Option (which he was entitled to
           exercise) within the time specified herein, the Option shall
           terminate.

     (iii) DEATH OF DIRECTOR.  In the event of the death of an Optionee:

           (A) during the term of the Option who is at the time of his death a
               Director of the Company and who shall have been in Continuous
               Status as a Director since the date of grant of the Option, the
               Option may be exercised, at any time within six (6) months
               following the date of death, by the Optionee's estate or by a
               person who acquired the right to exercise the Option by bequest
               or inheritance, but only to the extent of the right to exercise
               that would have accrued had the Optionee continued living and
               remained in Continuous Status a Director for twelve (12) months
               after the date of death; or

           (B) within thirty (30) days after the termination of Continuous
               Status as a Director, the Option may be exercised, at any time 
               within six (6) months following the date of death, by the
               Optionee's estate or by a person who acquired the right to
               exercise the Option by bequest or inheritance, but only to the
               extent of the right to exercise that had accrued at the date of
               termination.






<PAGE>11

12. EXERCISE OF OPTION.

   (a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER.  Any Option granted
       hereunder shall be exercisable according to the terms of the Plan and at
       such times and under such conditions as set forth in the Option
       Agreement.

       An Option may not be exercised for a fraction of a Share.

            An Option shall be deemed exercised when the Company receives: (i)
       written notice of exercise (in accordance with the Option Agreement)
       from the person entitled to exercise the Option, and (ii) full payment
       for the Shares with respect to which the Option is exercised.  Full
       payment may consist of any consideration and method of payment
       authorized by the Administrator and permitted by the Option Agreement
       and the Plan.  Shares issued upon exercise of an Option shall be issued
       in the name of the Optionee or, if requested by the Optionee, in the
       name of the Optionee and his or her spouse.  Until the stock certificate
       evidencing such Shares is issued (as evidenced by the appropriate entry
       on the books of the Company or of a duly authorized transfer agent of
       the Company), no right to vote or receive dividends or any other rights
       as a stockholder shall exist with respect to the Optioned Stock,
       notwithstanding the exercise of the Option.  The Company shall issue (or
       cause to be issued) such stock certificate promptly after the Option is
       exercised.  No adjustment will be made for a dividend or other right for
       which the record date is prior to the date the stock certificate is
       issued, except as provided in Section 14 of the Plan.

            Exercising an Option in any manner shall decrease the number of
       Shares thereafter available, both for purposes of the Plan and for sale
       under the Option, by the number of Shares as to which the Option is
       exercised.

   (b) TERMINATION OF EMPLOYMENT OR CONSULTING RELATIONSHIP.  Upon termination
       of an Optionee's Continuous Status as an Employee or Consultant, other
       than upon the Optionee's death or Disability, the Optionee may exercise
       the Option, but only within such period of time as is specified in the
       Notice of Grant or Option Agreement, and only to the extent that the
       Optionee was entitled to exercise it at the date of termination (but in
       no event later than the expiration of the term of such Option as set
       forth in the Notice of Grant or Option Agreement).  In the absence of a
       specified time in the Notice of Grant or Option Agreement, the Option
       shall remain exercisable for three months following the Optionee's
       termination of Continuous Status as an Employee or Consultant.  In the
       case of an Incentive Stock Option, such period of time shall not exceed
       three (3) months from the date of termination; in the case of a
       Nonstatutory Stock Option, such period of time shall not exceed twenty-
       four (24) months from the date of termination.  If, at the date of
       termination, the Optionee is not entitled to exercise the entire Option,
       the Shares covered by the unexercisable portion of the Option shall
       revert to the Plan.  If, after termination, the Optionee does not
       exercise the Option within the time specified by the Administrator, the
       Option shall terminate, and the Shares covered by such Option shall
       revert to the Plan.









<PAGE>12

   (c) DISABILITY OF OPTIONEE.  In the event that an Optionee's Continuous
       Status as an Employee or Consultant terminates as a result of the
       Optionee's Disability, the Optionee may exercise his or her Option at
       any time within (i) for discretionary stock options, six (6) months or
       such other period of time not exceeding twelve (12) months, as is
       specified in the Notice of Grant or Option Agreement, or (ii) for
       automatic stock option grants to Outside Directors, six (6) months from
       the date of such termination.  Any such Options may only be exercised to
       the extent that the Optionee was entitled to exercise it at the date of
       such termination (but in no event later than the expiration of the term
       of such Option as set forth in the Notice of Grant or Option Agreement).
       If, at the date of termination, the Optionee is not entitled to exercise
       his or her entire Option, the Shares covered by the unexercisable
       portion of the Option shall revert to the Plan.  If, after termination,
       the Optionee does not exercise his or her Option within the time
       specified herein, the Option shall terminate, and the Shares covered by
       such Option shall revert to the Plan.

   (d) DEATH OF OPTIONEE.  In the event of the death of an Optionee:

       (i) during the term of the Option who is at the time of his death an of
           the Company and who shall have been in Continuous Status as an
           Employee or Consultant since the date of grant of the Option, the
           Option may be exercised, at any time within six (6) months following
           the date of death, by the Optionee's estate or by a person who
           acquired the right to exercise the Option by bequest or inheritance,
           but only to the extent of the right to exercise that would have
           accrued had the Optionee continued living and remained in Continuous
           Status an Employee or Consultant for twelve (12) months after the
           date of death; or

      (ii) within thirty (30) days after the termination of Continuous Status
           as an Employee or Consultant, the Option may be exercised, at any
           time within six (6) months following the date of death, by the      

           Optionee's estate or by a person who acquired the right to exercise
           the Option by bequest or inheritance, but only to the extent of the
           right to exercise that had accrued at the date of termination.

   (e) RULE 16b-3.  Options granted to individuals subject to Section 16 of the
       Exchange Act ("Insiders") must comply with the applicable provisions of
       Rule 16b-3 and shall contain such additional conditions or restrictions
       as may be required thereunder to qualify for the maximum exemption from
       Section 16 of the Exchange Act with respect to Plan transactions.

13. NON-TRANSFERABILITY OF OPTIONS.  An Option may not be sold, pledged,
    assigned, hypothecated, transferred, or disposed of in any manner other
    than by will or by the laws of descent or distribution and may be
    exercised, during the lifetime of the Optionee, only by the Optionee.

14. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER, ASSET SALE

     OR CHANGE OF CONTROL. 

   (a) CHANGES IN CAPITALIZATION.  Subject to any required action by the
       stockholders of the Company, the number of shares of Common Stock
       covered by each outstanding Option, and the number of shares of Common
       Stock which have been authorized for issuance under the Plan but as to





<PAGE>13

       which no Options have yet been granted or which have been returned to
       the Plan upon cancellation or expiration of an Option, as well as the
       price per share of Common Stock covered by each such outstanding
       Option, shall be proportionately adjusted for any increase or decrease
       in the number of issued shares of Common Stock resulting from a stock
       split, reverse stock split, stock dividend, combination or
       reclassification of the Common Stock, or any other increase or decrease
       in the number of issued shares of Common Stock effected without receipt
       of consideration by the Company; provided, however, that conversion of
       any convertible securities of the Company shall not be deemed to have
       been "effected without receipt of consideration."  Such adjustment
       shall be made by the Board, whose determination in that respect shall
       be final, binding and conclusive.  Except as expressly provided herein,
       no issuance by the Company of shares of stock of any class, or
       securities convertible into shares of stock of any class, shall affect, 

       and no adjustment by reason thereof shall be made with respect to, the
       number or price of shares of Common Stock subject to an Option.

   (b) DISSOLUTION OR LIQUIDATION.  In the event of the proposed dissolution or
       liquidation of the Company, with respect to discretionary Options
       granted under the Plan (but not with respect to Options granted to
       Outside Directors) the Board may, in the exercise of its sole discretion
       in such instances, declare that any such Option shall terminate as of a
       date fixed by the Board and give each Optionee the right to exercise his
       or her Option as to all or any part of the Optioned Stock, including
       Shares as to which the Option would not otherwise be exercisable.

   (c) MERGER OR ASSET SALE.  In the event of a merger of the Company with or
       into another corporation, or the sale of substantially all of the assets

       of the Company, each outstanding Option shall be assumed or an
       equivalent option shall be substituted by the successor corporation or a
       Parent or Subsidiary of the successor corporation.  With respect to a
       discretionary Option granted under the Plan (but not with respect to
       Options granted to Outside Directors), the Administrator may, in the
       exercise of its sole discretion and in lieu of such assumption or
       substitution, provide for the Optionee to have the right to exercise
       such Option as to all of the Optioned Stock, including as to Shares
       which would not otherwise be exercisable.  With respect to Options
       granted to Outside Directors on or after the Effective Date of the Plan,
       in the event that the successor corporation does not agree to assume
       such Options or to substitute equivalent options, each such outstanding
       Option shall become fully vested and exercisable, including as to Shares
       as to which it would not otherwise be exercisable, unless the Board, in
       its discretion, determines otherwise.  With respect to Options granted
       to Outside Directors prior to the Effective Date of the Plan, in the 
       event that the successor corporation does not agree to assume such
       Options or to substitute equivalent options, such Options shall
       terminate.  

            If the Administrator makes a discretionary Option fully exercisable
       in lieu of assumption or substitution in the event of a merger or sale
       of assets, the Administrator shall notify the Optionee that the Option
       shall be fully exercisable for a period of thirty (30) days from the
       date of such notice, and the Option will terminate upon the expiration
       of such period.  






<PAGE>14

            For the purposes of this subsection, the Option shall be considered
       assumed if, following the merger or sale of assets, the option confers
       the right to purchase, for each Share of Optioned Stock subject to the
       Option immediately prior to the merger or sale of assets, the
       consideration (whether stock, cash, or other securities or property)
       received in the merger or sale of assets by holders of Common Stock for
       each Share held on the effective date of the transaction (and if holders
       were offered a choice of consideration, the type of consideration chosen
       by the holders of a majority of the outstanding Shares); provided,
       however, that if such consideration received in the merger or sale of
       assets was not solely common stock of the successor corporation or its
       Parent, the Administrator may, with the consent of the successor
       corporation, provide for the consideration to be received upon the
       exercise of the Option, for each Share of Optioned Stock subject to the
       Option, to be solely common stock of the successor corporation or its
       Parent equal in fair market value to the per share consideration
       received by holders of Common Stock in the merger or sale of assets.

15. OPTION DATE OF GRANT.  The date of grant of an Option shall be, for all
    purposes, the date on which the Administrator makes the determination
    granting such Option, or such other later date as is determined by the
    Administrator.  Notice of the determination shall be provided to each
    Optionee within a reasonable time after the date of such grant.

16. AMENDMENT AND TERMINATION OF THE PLAN.

   (a) AMENDMENT AND TERMINATION.  The Board may at any time amend, alter,
       suspend or terminate the Plan.  

   (b) STOCKHOLDER APPROVAL.  The Company shall obtain stockholder approval of
       any Plan amendment to the extent necessary and desirable to comply with
       Rule 16b-3 or with Sections 422 and 424 of the Code (or any successor
       rules or statutes or other applicable laws, rules or regulations,
       including the requirements of any exchange or quotation system on which
       the Common Stock is listed or quoted).  Such stockholder approval, if
       required, shall be obtained in such a manner and to such a degree as is
       required by the applicable law, rule or regulation.

   (c) EFFECT OF AMENDMENT OR TERMINATION.  No amendment, alteration,
       suspension or termination of the Plan shall impair the rights of any
       Optionee, unless mutually agreed otherwise between the Optionee and the
       Administrator, which agreement must be in writing and signed by the
       Optionee and the Company.

17. CONDITIONS UPON ISSUANCE OF SHARES.  

   (a) LEGAL COMPLIANCE.  Shares shall not be issued pursuant to the exercise
       of an Option unless the exercise of such Option and the issuance and
       delivery of such Shares shall comply with all relevant provisions of
       law, including, without limitation, the Securities Act of 1933, as
       amended, the Exchange Act, the rules and regulations promulgated
       thereunder, Applicable Laws, and the requirements of any stock exchange
       or quotation system upon which the Shares may then be listed or quoted,
       and shall be further subject to the approval of counsel for the Company
       with respect to such compliance.







<PAGE>15

   (b) INVESTMENT REPRESENTATIONS.  As a condition to the exercise of an
       Option, the Company may require the person exercising such Option to 
       represent and warrant at the time of any such exercise that the Shares 
       are being purchased only for investment and without any present
       intention to sell or distribute such Shares if, in the opinion of
       counsel for the Company, such a representation is required.

18. LIABILITY OF COMPANY.

   (a) INABILITY TO OBTAIN AUTHORITY.  The inability of the Company to obtain
       authority from any regulatory body having jurisdiction, which authority
       is deemed by the Company's counsel to be necessary to the lawful
       issuance and sale of any Shares hereunder, shall relieve the Company of 
       any liability in respect of the failure to issue or sell such Shares as
       to which such requisite authority shall not have been obtained.

   (b) OPTION GRANTS EXCEEDING ALLOTTED SHARES.  If the Optioned Stock covered 
       by an Option exceeds, as of the date of grant, the number of Shares
       which may be issued under the Plan without additional stockholder 
       approval, such Option shall be void with respect to such excess Optioned

       Stock, unless stockholder approval of an amendment sufficiently
       increasing the number of Shares subject to the Plan is timely obtained
       in accordance with Section 16(b) of the Plan.

19. RESERVATION OF SHARES.  The Company, during the term of this Plan, will at
    all times reserve and keep available such number of Shares as shall be
    sufficient to satisfy the requirements of the Plan.



































<PAGE>16

                       CYPRESS SEMICONDUCTOR CORPORATION
                             1994 STOCK OPTION PLAN
                                 NOTICE OF GRANT


     Unless otherwise defined herein, capitalized terms used herein shall have
the same meanings as set forth in the Plan.

[Optionee's Name and Address]

     You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:

Grant Number                        _________________________

Date of Grant                       _________________________

Vesting Commencement Date           _________________________

Exercise Price per Share           $________________________

Total Number of Shares Granted      _________________________

Total Exercise Price               $_________________________

Type of Option:                     ___  Incentive Stock Option

                                    ___  Nonstatutory Stock Option

Term/Expiration Date:               _________________________


VESTING SCHEDULE:

     This Option may be exercised, in whole or in part, in accordance with the
following schedule:

     25% of the Shares subject to the Option shall vest twelve months after the
Vesting Commencement Date, and 1/48 of the Shares subject to the Option shall
vest each month thereafter.

TERMINATION PERIOD:

     This Option may be exercised for 30 days after termination of the
Optionee's employment or consulting relationship with the Company.  Upon the
death or Disability of the Optionee, this Option may be exercised for such
longer period as provided in the Plan. In the event of the Optionee's change in
status from Employee to Consultant or Consultant to Employee, this Option
Agreement shall remain in effect.  In no event shall this Option be exercised
later than the Term/Expiration Date as provided above.












<PAGE>17

                       CYPRESS SEMICONDUCTOR CORPORATION
                             1994 STOCK OPTION PLAN
                                OPTION AGREEMENT


     Unless otherwise defined herein, capitalized terms used herein shall have
the same meanings as set forth in the Plan.

1. GRANT OF OPTION.  The Plan Administrator of the Company hereby grants to the
   Optionee named in the Notice of Grant attached as Part I of this Agreement
   (the "Optionee"), an option (the "Option") to purchase the number of Shares,
   as set forth in the Notice of Grant, at the exercise price per share set
   forth in the Notice of Grant (the "Exercise Price"), subject to the terms an

   conditions of the Plan, which is incorporated herein by reference.  Subject
   to Section 14(c) of the Plan, in the event of a conflict between the terms
   and conditions of the Plan and the terms and conditions of this Option
   Agreement, the terms and conditions of the Plan shall prevail.

   If designated in the Notice of Grant as an Incentive Stock Option ("ISO"),
   this Option is intended to qualify as an Incentive Stock Option under
   Section 422 of the Code.  However, if this Option is intended to be an
   Incentive Stock Option, to the extent that it exceeds the $100,000 rule of
   Code Section 422(d) it shall be treated as a Nonstatutory Stock Option
   ("NSO").

2. EXERCISE OF OPTION.

     (a) RIGHT TO EXERCISE.  This Option is exercisable during its term in
         accordance with the Vesting Schedule set out in the Notice of Grant
         and the applicable provisions of the Plan and this Option Agreement. 
         In the event of Optionee's death, Disability or other termination of
         Optionee's employment or consulting relationship, the exercisability
         of the Option is governed by the applicable provisions of the Plan and
         this Option Agreement.

     (b) METHOD OF EXERCISE.  This Option is exercisable by delivery of an
         exercise notice, in the form attached as Exhibit A (the "Exercise
         Notice"), which shall state the election to exercise the Option, the
         number of Shares in respect of which the Option is being exercised
         (the "Exercised Shares"), and such other representations and
         agreements as may be required by the Company pursuant to the
         provisions of the Plan. The Exercise Notice shall be signed by the
         Optionee and shall be delivered in person or by certified mail to the
         Secretary of the Company.  The Exercise Notice shall be accompanied by
         payment of the aggregate Exercise Price as to all Exercised Shares. 
         This Option shall be deemed to be exercised upon receipt by the
         Company of such fully executed Exercise Notice accompanied by such
         aggregate Exercise Price.

         No Shares shall be issued pursuant to the exercise of this Option
   unless such issuance and exercise complies with all relevant provisions of
   law and the requirements of any stock exchange or quotation service upon
   which the Shares are then listed.  Assuming such compliance, for income tax
   purposes the Exercised Shares shall be considered transferred to the
   Optionee on the date the Option is exercised with respect to such Exercised
   Shares.






<PAGE>18

3. METHOD OF PAYMENT.  Payment of the aggregate Exercise Price shall be by any
   of the following, or a combination thereof, at the election of the Optionee:

   (a) cash; or

   (b) check; or

   (c) delivery of a properly executed exercise notice together with such other
       documentation as the Administrator and the broker, if applicable, shall
       require to effect an exercise of the Option and delivery to the Company
       of the sale or loan proceeds required to pay the exercise price; or

   (d) surrender of other Shares which (i) in the case of Shares acquired upon
       exercise of an option, have been owned by the Optionee for more than six
       (6) months on the date of surrender, and (ii) have a Fair Market Value
on
       the date of surrender equal to the aggregate Exercise Price of the
       Exercised Shares.

4. NON-TRANSFERABILITY OF OPTION.  This Option may not be transferred in any
   manner otherwise than by will or by the laws of descent or distribution and 
   may be exercised during the lifetime of Optionee only by the Optionee.  The
   terms of the Plan and this Option Agreement shall be binding upon the
   executors, administrators, heirs, successors and assigns of the Optionee.

5. TERM OF OPTION.  This Option may be exercised only within the term set out 
   in the Notice of Grant, and may be exercised during such term only in
   accordance with the Plan and the terms of this Option Agreement.

6. TAX CONSEQUENCES.  Some of the federal and California tax consequences
   relating to this Option, as of the date of this Option, are set forth below.

   THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
   SUBJECT TO CHANGE.  THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE
   EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

   (a) EXERCISING THE OPTION.

       (i) NONSTATUTORY STOCK OPTION.  The Optionee may incur regular federal
           income tax and California income tax liability upon exercise of a
           NSO.  The Optionee will be treated as having received compensation
           income (taxable at ordinary income tax rates) equal to the excess,
           if any, of the Fair Market Value of the Exercised Shares on the date
           of exercise over their aggregate Exercise Price.  If the Optionee is
           an Employee, the Company will be required to withhold from his or
           her compensation or collect from Optionee and pay to the applicable
           taxing authorities an amount equal to a percentage of this
           compensation income at the time of exercise.

      (ii) INCENTIVE STOCK OPTION.  If this Option qualifies as an ISO, the
           Optionee will have no regular federal income tax or California
           income tax liability upon its exercise, although the excess, if any,
           of the Fair Market Value of the Exercised Shares on the date of
           exercise over their aggregate Exercise Price will be treated as an
           adjustment to alternative minimum taxable income for federal tax
           purposes and may subject the Optionee to alternative minimum tax in







<PAGE>19

           the year of exercise.  In the event that the Optionee undergoes a
           change of status from Employee to Consultant, any Incentive Stock 
           Option of the Optionee that remains unexercised shall cease to
           qualify as an Incentive Stock Option and will be treated for tax
           purposes as a Nonstatutory Stock Option on the ninety-first (91st)
           day following such change of status.

   (b) DISPOSITION OF SHARES.  

       (i) NSO.  If the Optionee holds NSO Shares for at least one year, any
           gain realized on disposition of the Shares will be treated as long-
           term capital gain for federal income tax purposes.

      (ii) ISO.  If the Optionee holds ISO Shares for at least one year after
           exercise and two years after the grant date, any gain realized on
           disposition of the Shares will be treated as long-term capital gain
           for federal income tax purposes.  If the Optionee disposes of ISO
           Shares within one year after exercise or two years after the grant
           date, any gain realized on such disposition will be treated as
           compensation income (taxable at ordinary income rates) to the extent
           of the excess, if any, of the lesser of (A) the difference between
           the Fair Market Value of the Shares acquired on the date of exercise
           and the aggregate Exercise Price, or (B) the difference between the
           sale price of such Shares and the aggregate Exercise Price.

   (c) NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES.  If the Optionee
       sells or otherwise disposes of any of the Shares acquired pursuant to an
       ISO on or before the later of (i) two years after the grant date, or
       (ii) one year after the exercise date, the Optionee shall immediately
       notify the Company in writing of such disposition.  The Optionee agrees
       that he or she may be subject to income tax withholding by the Company
       on the compensation income recognized from such early disposition of ISO
       Shares by payment in cash or out of the current earnings paid to the 
       Optionee.





























<PAGE>20

     By your signature and the signature of the Company's representative below,
you and the Company agree that this Option is granted under and governed by the
terms and conditions of the Plan and this Option Agreement.  Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option
Agreement.  Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Administrator upon any questions
relating to the Plan and Option Agreement.  Optionee further agrees to notify
the Company upon any change in the residence address indicated below.

OPTIONEE:                                     CYPRESS SEMICONDUCTOR CORPORATION



___________________________________     By:____________________________________
Signature

___________________________________  Title:_________________________________
Print Name

____________________________________
Residence Address

____________________________________




                               CONSENT OF SPOUSE

The undersigned spouse of Optionee has read and hereby approves the terms and
conditions of the Plan and this Option Agreement.  In consideration of the
Company's granting his or her spouse the right to purchase Shares as set forth
in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound.  The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.


                                        _______________________________________
                                        Spouse of Optionee



















<PAGE>21

                                 EXHIBIT A

                     CYPRESS SEMICONDUCTOR CORPORATION
                           1994 STOCK OPTION PLAN
                              EXERCISE NOTICE




Cypress Semiconductor Corporation
3901 North First Street
San Jose, CA  95134
Attention:  Secretary  

1. EXERCISE OF OPTION.  Effective as of today, ________________, 199__, the
   undersigned ("Purchaser") hereby elects to purchase ______________ shares
   (the "Shares") of the Common Stock of Cypress Semiconductor Corporation (the
   "Company") under and pursuant to the 1994 Stock Option Plan (the "Plan") and
   the Stock Option Agreement dated              , 19___ (the "Option
   Agreement").  The purchase price for the Shares shall be $             , as
   required by the Option Agreement.

2. DELIVERY OF PAYMENT.  Purchaser herewith delivers to the Company the full
   purchase price for the Shares.

3. REPRESENTATIONS OF PURCHASER.  Purchaser acknowledges that Purchaser has
   received, read and understood the Plan and the Option Agreement and agrees
   to abide by and be bound by their terms and conditions.

4. RIGHTS AS SHAREHOLDER.  Until the issuance (as evidenced by the appropriate
   entry on the books of the Company or of a duly authorized transfer agent of
   the Company) of the stock certificate evidencing such Shares, no right to
   vote or receive dividends or any other rights as a shareholder shall exist
   with respect to the Optioned Stock, notwithstanding the exercise of the
   Option.  A share certificate for the number of Shares so acquired shall be
   issued to the Optionee as soon as practicable after exercise of the Option. 
   No adjustment will be made for a dividend or other right for which the
   record date is prior to the date the stock certificate is issued, except as
   provided in Section 14 of the Plan.

5. TAX CONSULTATION.  Purchaser understands that Purchaser may suffer adverse
   tax consequences as a result of Purchaser's purchase or disposition of the
   Shares.  Purchaser represents that Purchaser has consulted with any tax
   consultants Purchaser deems advisable in connection with the purchase or
   disposition of the Shares and that Purchaser is not relying on the Company
   for any tax advice.

















<PAGE>22

6. ENTIRE AGREEMENT; GOVERNING LAW.  The Plan and Option Agreement are
   incorporated herein by reference.  This Agreement, the Plan and the Option
   Agreement constitute the entire agreement of the parties and supersede in
   their entirety all prior undertakings and agreements of the Company and
   Purchaser with respect to the subject matter hereof, and such agreement is
   governed by California law except for that body of law pertaining to
   conflict of laws.


Submitted by:Accepted by:

PURCHASER:CYPRESS SEMICONDUCTOR CORPORATION


__________________________________        By: _________________________________
Signature

__________________________________       Its: ________________________________
Print Name


Address:Address:

_______________________________   3901 North First Street
                                  San Jose, CA  95134
_______________________________



















































































<PAGE>1

                       CYPRESS SEMICONDUCTOR CORPORATION
                  1996 KEY EMPLOYEE BONUS PLAN AGREEMENT (KEBP)



ARTICLE 1 - PLAN OBJECTIVE

1.1  The objective of this Key Employee Bonus Plan is to provide incentive to
     key employees of the Company based on the Company's overall Sales and
     Earnings Per Share (EPS) achievement, the Company's growth relative to
     selected competitors, and the individual's performance against set
     individual Critical  Success Factors (CSFs).


ARTICLE 2 - EFFECTIVE DATE

2.1  This agreement will become effective January 1, 1996 for the plan period
     of fiscal year 1996.  The plan period for fiscal year 1996 covers January
     2, 1996 to December 30, 1996.


ARTICLE 3 - ELIGIBILITY FOR PLAN PARTICIPATION

3.1  Prior to the commencement of each Plan Period, members of Cypress'
     Executive Staff will recommend to the President/CEO for approval proposed
     participants for the plan period and their incentive levels.

3.2  Prior to the commencement of each Plan Period, the CEO and his Executive
     Staff's plan participation and their incentive levels will be presented to

     the Compensation Committee of the Board of Directors for approval.

3.3  Participants are notified of their eligibility at the beginning of each
     plan period.

3.4  Newly hired
 employees may be added as participants during the plan
     period.  Other employees who are currently not plan participants may be
     considered for participation at the beginning of the plan period, provided
     however that they have assumed greater responsibility or demonstrated
     greater contribution to the company.  Participants added during the plan
     period shall receive prorated awards based on the number of months of
     participation in the plan with a minimum of six months participation. 
     Otherwise, eligibility will be deferred until the next plan period.
     Exceptions are subject to CEO approval.

3.5  Changes in plan participants require the approval of the President/CEO.


ARTICLE 4 -  CALCULATION OF THE BONUS

4.1  The total possible bonus  is determined by the absolute performance
     of Cypress in both revenue and earnings per share (EPS) and by the
     relative performance of Cypress' revenue growth versus a select list of
     competitors' revenue growth.  (For 1996, the comparison competitors are 
     shown in Attachment A.)

     a) The target  bonus is the individual incentive target of each
        participant.





<PAGE>2

     b) The estimated bonus is comprised of two parts, one based on Sales
        and one based on EPS with each element accounting for the generation
        of half of the bonus.

          
ESTIMATED BONUS BASED ON REVENUE

If the actual sales for FY96 are equal to $775 million, the estimated
bonus for revenue is multiplied by 25%.  

Revenue lower than $775 million will result in zero bonus for the revenue
portion of the plan.  

Actual sales performance between $775 million and $950 million will result in a
multiplier for revenue which ranges from 25%-200% as shown in the table below. 

For example, if the actual FY96 revenue equals $867 million, the estimated
bonus for revenue is multiplied by a factor of 112.8%. 

For the purpose of computing the bonus multiplier for revenue, the
actual FY96 sales will be rounded to the nearest million.


                                    Table 1
                           Bonus Multiplier for Sales
                          For every $2M sales of Plan

           Sales ($M)                Addtl                     Cum
              FY96              Bonus Multiplier         Bonus Multiplier
        ----------------      --------------------     --------------------
               775                    0.00%                    0.0%
               777                    3.64%                    3.6%
               779                    3.64%                    7.3%
               781                    3.64%                   10.9%
               783                    3.64%                   14.6%
               785                    3.64%                   18.2%
               787                    3.64%                   21.8%
               789                    3.64%                   25.5%
               791                    3.64%                   29.1%
               793                    3.64%                   32.7%
               795                    3.64%                   36.4%
               797                    3.64%                   40.0%
               799                    3.64%                   43.7%
               801                    3.64%                   47.3%
               803                    3.64%                   50.9%
               805                    3.64%                   54.6%
               807                    3.64%                   58.2%
               809                    3.64%                   61.8%
               811                    3.64%                   65.5%
               813                    3.64%                   69.1%
               815                    3.64%                   72.8%
               817                    3.64%                   76.4%
               819                    3.64%                   80.0%
               821                    3.64%                   83.7%









<PAGE>3

                               Table 1 (Continued)
                           Bonus Multiplier for Sales
                          For every $2M sales of Plan

           Sales ($M)                Addtl                     Cum
              FY96              Bonus Multiplier         Bonus Multiplier
        ----------------      --------------------     --------------------
               823                    3.64%                   87.3%
               825                    3.64%                   91.0%
               827                    3.64%                   94.6%
               829                    3.64%                   98.2%
               830                    1.82%                  100.0%
               831                    1.64%                  101.7%
               833                    1.64%                  103.3%
               835                    1.64%                  105.0% 
               837                    1.64%                  106.6%
               839                    1.64%                  108.2%  
               841                    1.64%                  109.9%          
               843                    1.64%                  111.5%        
               845                    1.64%                  113.2%      
               847                    1.64%                  114.8%      
               849                    1.64%                  116.4%         
               851                    1.64%                  118.1%      
               853                    1.64%                  119.7%    
               855                    1.64%                  121.4%
               857                    1.64%                  123.0%
               859                    1.64%                  124.6%
               861                    1.64%                  126.3%
               863                    1.64%                  127.9%
               865                    1.64%                  129.5%
               867                    1.64%                  131.2%
               869                    1.64%                  132.8%
               871                    1.64%                  134.5% 
               873                    1.64%                  136.1%
               875                    1.64%                  137.7%
               877                    1.64%                  139.4%
               879                    1.64%                  141.0%
               881                    1.64%                  142.7%
               883                    1.64%                  144.3%
               885                    1.64%                  145.9% 
               887                    1.64%                  147.6%  
               889                    1.64%                  149.2%
               891                    1.64%                  150.9%
               893                    1.64%                  152.5%
               895                    1.64%                  154.1% 
               897                    1.64%                  155.8%
               899                    1.64%                  157.4%
               901                    1.64%                  159.0%
               903                    1.64%                  160.7%
               905                    1.64%                  162.3%
               907                    1.64%                  164.0%
               909                    1.64%                  165.6%
               911                    1.64%                  167.2%
               913                    1.64%                  168.9%









<PAGE>4

                               Table 1 (Continued)
                           Bonus Multiplier for Sales
                          For every $2M sales of Plan

           Sales ($M)                Addtl                     Cum
              FY96              Bonus Multiplier         Bonus Multiplier
        ----------------      --------------------     --------------------
               915                    1.64%                   170.5%
               917                    1.64%                   172.2%
               919                    1.64%                   173.8%
               921                    1.64%                   175.4%
               923                    1.64%                   177.1%
               925                    1.64%                   178.7%
               927                    1.64%                   180.4%
               929                    1.64%                   182.0%
               931                    1.64%                   183.6%
               933                    1.64%                   185.3%
               935                    1.64%                   186.9%
               937                    1.64%                   188.6%
               939                    1.64%                   190.2% 
               941                    1.64%                   191.8%
               943                    1.64%                   193.5%
               945                    1.64%                   195.1%
               947                    1.64%                   196.7%
               949                    1.64%                   198.4%
               950                    1.64%                   200.0%





































<PAGE>5

ESTIMATED BONUS BASED ON EPS

If the actual EPS for FY96 is equal to $1.60 the estimated bonus for EPS is
multiplied by 50%.

EPS lower than $1.60 will result in zero bonus for the EPS portion
of the plan.

Actual EPS performance between $1.60 and $2.10 will result in a multiplier 
for EPS which ranges from 50%-200% as shown in the table below.

For example, if the actual FY96 EPS equals $1.83, the estimated bonus for EPS 
is multiplied by a factor of 89.7%. 

For the purpose of computing the multiplier for EPS, the actual
EPS will be rounded to the nearest penny.

                                    Table 2
                           Bonus Multiplier for EPS
                         For every Penny EPS in Plan

              EPS                    Addtl                     Cum
              FY96              Bonus Multiplier         Bonus Multiplier
        ----------------      --------------------     --------------------
               1.60                   50.00%                  50.0%
               1.61                    1.73%                  51.7%
               1.62                    1.73%                  53.5%           
               1.63                    1.73%                  55.2%        
               1.64                    1.73%                  56.9%    
               1.65                    1.73%                  58.6% 
               1.66                    1.73%                  60.3%   
               1.67                    1.73%                  62.1% 
               1.68                    1.73%                  63.8%   
               1.69                    1.73%                  65.5%     
               1.70                    1.73%                  67.2% 
               1.71                    1.73%                  69.0%  
               1.72                    1.73%                  70.7%   
               1.73                    1.73%                  72.4% 
               1.74                    1.73%                  74.1%  
               1.75                    1.73%                  75.9% 
               1.76                    1.73%                  77.6% 
               1.77                    1.73%                  79.3% 
               1.78                    1.73%                  81.0%   
               1.79                    1.73%                  82.8%  
               1.80                    1.73%                  84.5%
               1.81                    1.73%                  86.2%
               1.82                    1.73%                  87.9%
               1.83                    1.73%                  89.7%
               1.84                    1.73%                  91.4%
               1.85                    1.73%                  93.1%
               1.86                    1.73%                  94.8%
               1.87                    1.73%                  96.6%
               1.88                    1.73%                  98.3%
               1.89                    1.73%                 100.0%
               1.90                    4.76%                 104.8%








<PAGE>6

                              Table 2 (Continued)
                           Bonus Multiplier for EPS
                         For every Penny EPS in Plan

              EPS                    Addtl                     Cum
              FY96              Bonus Multiplier         Bonus Multiplier
        ----------------      --------------------     --------------------
               1.91                   4.76%                   109.5%
               1.92                   4.76%                   114.3%
               1.93                   4.76%                   119.1%
               1.94                   4.76%                   123.8%
               1.95                   4.76%                   128.6%
               1.96                   4.76%                   133.3%
               1.97                   4.76%                   138.1%
               1.98                   4.76%                   142.9%
               1.99                   4.76%                   147.6%
               2.00                   4.76%                   152.4%
               2.01                   4.76%                   157.1%  
               2.02                   4.76%                   161.9%
               2.03                   4.76%                   166.7%
               2.04                   4.76%                   171.4%
               2.05                   4.76%                   176.2%
               2.06                   4.76%                   180.9%
               2.07                   4.76%                   185.7%
               2.08                   4.76%                   190.5%
               2.09                   4.76%                   195.2%   
               2.10                   4.76%                   200.0%


     c) When the estimated bonus for revenue and EPS have been calculated,
        the two are added together.  The resulting calculated total bonus is
        multiplied by the Cypress growth factor.  The Cypress growth factor is
        calculated by taking the weighted average of the actual growth
        percentages of the selected competitor companies for their Fiscal year
        1996, dividing that composite growth factor into the Cypress growth
        rate and taking the square of the result:
                                                                             
     
                                         Cypress Growth Rate in FY96
          CYPRESS GROWTH FACTOR =        -----------------------------------
                                         Composite Competitors' Growth Rate

          
     d) The actual bonus is the sum of the estimated bonus for revenue and
        the estimated bonus for EPS, multiplied by the Cypress growth factor.


















<PAGE>7

ARTICLE 5 - INCENTIVE LEVEL CONFIGURATION

     A participant's possible bonus is divided into two parts; one portion
     based on their individual performance and one part based on the average
     performance of the Executive Staff against their CSFs.

5.1  Incentive levels for each plan participant will be defined to include
     weights for the following bonus plan elements:

       Corporate         - bonus plan element based on company performance
       performance
       
       Individual CSF's  - bonus plan scoring based on participant's
                           accomplishment of their CSFs (average of
                           individual's CSFs for the year)

5.2  Each plan participant will be given an incentive level expressed as a
     percent of Base Salary.  The following incentive levels have been defined:
                                                              
               80%      CEO, Senior VPs                       
               30%      VPs, Key Mgrs, Key Employees          
               20%      Other Key Employees

5.3  Plan participants will be measured based on the following incentive plan
     elements:

                                      20% Bonus    30% Bonus    80% Bonus
                                     -----------  -----------  -----------
       Corporate performance              20%          40%         50%
       Individual CSFs                    80%          60%         50%

5.4  Participants can earn 0% to 100% scores on CSFs.

5.5  For the purpose of the KEBP, EPS is defined as Earnings Per Share
     reported by the company adjusted for extra-ordinary events not included in
     the fiscal year's Plan, i.e. 95.12 Plan.   

5.6  Plan payout will be based on the plan participant's base salary at the
     end of the plan period.

5.7  Should an employee change jobs during the plan period, and the change
     result in a change in incentive level either as a result of a promotion or
     demotion, the new incentive level will be determined immediately and the
     employee will be notified in writing.  In any case, changes in incentive
     level require the approval of the CEO.

5.8  Quarterly, VPs will present their CSF achievement at the Executive
     Staff.  The CSF achievement of the direct reports to the VPs will be
     presented and discussed at the first Operations Review of each quarter.
     Results for the prior quarter and CSF plans for the current quarter are
     presented.












<PAGE>8

ARTICLE 6 - CALCULATION OF ACTUAL BONUS BASED ON CSF PERFORMANCE

6.1 A participant's actual bonus is calculated as: 

Participants        Incentive Plan                          Actual
Possible       X    Element for                       =     Bonus for
Bonus               Company Performance                     Company Performance


Participants        Incentive Plan       Individuals        Actual
Possible       X    Element for      X   CSF          =     Bonus for 
Bonus               CSF Score            Score              Individual CSFs


Actual                           Actual                     Total
Bonus for               +        Bonus for            =     Actual
Company Performance              Individual CSFs            Bonus

  

6.2  A 0% threshold will be defined for each CSF.  This threshold, which
     could be timing and/or deliverable-based, is a point at which CSF score
     starts to be earned.  If a participant does not reach/complete the minimum
     threshold, the CSF will be scored 0% (zero).  Progress beyond the
     threshold earns the participant a pro-rated score up to 100%.


ARTICLE 7 - PAYMENT OF BONUS EARNED

7.1  At the end of the plan period, the CEO will present the actual bonuses
     [along with the computation of the estimated bonuses] to the Compensation
     Committee of the Board for their approval.

7.2  Actual bonuses for each participant will be calculated using the formulas
     above.

7.3  Actual bonuses will be paid in three installments, defined as follows:

       50% of bonus earned at the end of the plan period will be paid one
       week after financial results are made public from the fiscal year
       concluded (tentatively January 31st).

       25% of bonus earned will be paid 6 months after the first
       installment (tentatively July 31st).

       25% of bonus earned will be paid in the following year coinciding
       with that plan year's first 50% payout (tentatively January 31st).

       On the basis of this schedule, 1st payout for 1996 plan period is
       tentatively January 31, 1997.













<PAGE>9

ARTICLE 8 - ELIGIBILITY FOR PAYMENT

8.1  To be eligible for bonus payment, the participant must be employed by
     the company at the scheduled payment date.  A participant who terminates
     employment prior to the payment date will forfeit the bonus including all
     future payment schedules, except as otherwise provided in this article.

8.2  Disability:  If a participant is disabled, i.e. inability to perform any
     services for the company and eligible to receive disability benefits under
     the standards used by the company's disability benefit plan, the
     participant will receive an award representing a proration for
     each month of employment in the plan period.

8.3  Retirement:  If a participant retires, i.e. permanent termination of
     employment with the company in accordance with the company's retirement
     policies, the participant will receive an award representing a proration 
     for each month of employment in the plan period.

8.4  Death:  If a participant dies, awards will be paid to the beneficiary
     designated by the participant, otherwise, to the persons entitled thereto
     as determined by a court of competent jurisdiction.  The award will be a
     proration of each month of employment in the plan period.

8.5  Lay-off:  If a participant is terminated by lay-off during the plan
     period, no bonus will be awarded.  If a participant is terminated by
     lay-off after the plan period but prior to a scheduled bonus payment, it
     will be the discretion of the CEO to pay bonus in full or
     on a prorate basis.  No bonus will be paid to employees who are
     terminated for cause.

8.6  All qualified bonus payments including future schedule pursuant to para  
     8.2, 8.3 and 8.5 will be paid in lump-sum.

8.8  The CEO reserves the right to reduce the bonus award of a participant on
     a pro-rata basis to reflect a participant's leave of absence during the
     plan period.


ARTICLE 9 - MISCELLANEOUS

9.1  Unless as defined in article 8.4, no right or interest in this plan is
     transferable or assignable except by will or laws of descent and
     distribution.

9.2  Participation in this plan does not guarantee any right to continued
     employment with the Company.

9.3  Participation in the plan in a particular plan period is not a guarantee
     to participation in subsequent plan periods.

9.4  Management reserves the right to discontinue participation of any
     participant in this plan, at any time, and for whatever reasons.











<PAGE>10

9.5  This plan is unfunded and the company does not intend to set up a
     sinking fund.  Consequently, payments arising out of bonus earned shall be
     paid out of the company's general assets.  Accounts recognized by the
     company for book purposes is not an indication of funds set aside for
     payment.  Plan participants are considered as general creditors of the
     company and the obligation of the company is purely contractual and
     is not secured by any particular company asset.

9.6  The provision of this plan shall not limit the CEO and the Compensation
     Committee of the Board of Directors to modify said plan, or adopt such
     other plans on matters of compensation, bonus or incentive, which in its
     own judgment it deems proper,
     at any time.

9.7  This agreement is construed to be in accordance with the laws of the
     State of Delaware.




























































                  





<PAGE>1

<TABLE>
                       CYPRESS SEMICONDUCTOR CORPORATION

                                 EXHIBIT 11.1
            COMPUTATION OF NET INCOME PER COMMON SHARE AND DILUTIVE
                           COMMON SHARE EQUIVALENTS      
                     (In thousands, except per share data)
                                  (Unaudited)
<CAPTION>
                                                          Three Months Ended
                                                        ----------------------
                                                          Apr. 1,     Apr. 3,
                                                           1996        1995
                                                        ----------  ----------
<S>                                                     <C>         <C>       
PRIMARY:
- ----------------------------
Weighted average number of common shares outstanding        79,966      78,868 

                      

Common share equivalents from dilutive effect of
  outstanding stock options                                  3,452       8,355
                                                        ----------  ----------
Weighted average number of common shares and dilutive
  common share equivalents outstanding                      83,418      87,223 
                                                        ==========  ========== 

                       
Net income used in per share computation                $   34,277  $    9,105
                                                        ==========  ==========

Net income per common and common equivalent share       $     0.41  $     0.11 

                                                        ==========  ========== 

                        
FULLY DILUTED:
- ----------------------------
Weighted average number of common shares outstanding        79,966      78,868 

                     
Common share equivalents from dilutive effect of
  outstanding stock options                                  3,452       8,799 

                       
Shares issuable upon conversion of convertible
  subordinated notes                                         7,940       7,940
                                                        ----------  ----------
 
Weighted average number of common shares and dilutive
  common share equivalents outstanding                      91,358      95,607
                                                        ==========  ========== 

                      
Net income used in per share computation                $   35,191  $    9,999
                                                        ==========  ========== 

                     
Net income per common and common equivalent share       $     0.39  $     0.11
                                                        ==========  ========== 

                      
</TABLE>

                                      1





<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>  THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
          THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED APRIL 1,
          1996.
</LEGEND> 
       
<MULTIPLIER>   1,000
<S>                                               <C>
<PERIOD-TYPE>                                           3-MOS
<FISCAL-YEAR-END>                                 DEC-30-1996
<PERIOD-START>                                    JAN-02-1996
<PERIOD-END>                                      APR-01-1996
<CASH>                                                  1,090
<SECURITIES>                                          109,983
<RECEIVABLES>                                         101,536
<ALLOWANCES>                                            2,479
<INVENTORY>                                            36,858
<CURRENT-ASSETS>                                      307,861
<PP&E>                                                616,288
<DEPRECIATION>                                        228,832
<TOTAL-ASSETS>                                        763,692
<CURRENT-LIABILITIES>                                 167,842
<BONDS>                                                96,452
<COMMON>                                                  898
<PREFERRED-MANDATORY>                                       0
<PREFERRED>                                                 0
<OTHER-SE>                                            476,966
<TOTAL-LIABILITY-AND-EQUITY>                          763,692
<SALES>                                               170,171
<TOTAL-REVENUES>                                      170,171
<CGS>                                                  76,861
<TOTAL-COSTS>                                          76,861
<OTHER-EXPENSES>                                       21,416
<LOSS-PROVISION>                                            0
<INTEREST-EXPENSE>                                      1,647
<INCOME-PRETAX>                                        53,980
<INCOME-TAX>                                           19,703
<INCOME-CONTINUING>                                    34,277
<DISCONTINUED>                                              0 
<EXTRAORDINARY>                                             0
<CHANGES>                                                   0
<NET-INCOME>                                           34,277
<EPS-PRIMARY>                                            0.41
<EPS-DILUTED>                                            0.39

        

</TABLE>