UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                  SCHEDULE 13G

                    Under the Securities Exchange Act of 1934
                                (Amendment No. )*

                        CYPRESS SEMICONDUCTOR CORPORATION
--------------------------------------------------------------------------------
                                (Name of Issuer)

                                  Common Stock
--------------------------------------------------------------------------------
                         (Title of Class of Securities)

                                    232806109
                                    ---------
                                 (CUSIP Number)

                                 October 6, 2006
                                 ---------------
                      (Date of Event which Requires Filing
                               of this Statement)



Check the appropriate box to designate the rule pursuant to which this Schedule
is filed:

         [ ]    Rule 13d-1(b)
         [X]    Rule 13d-1(c)
         [ ]    Rule 13d-1(d)



*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).


                                  Page 1 of 10



<PAGE>


-------------------                                           ------------------
CUSIP No. 232806109                   13G                     Page 2 of 10 Pages
-------------------                                           ------------------

---------- ---------------------------------------------------------------------
        1  NAME OF REPORTING PERSON
           I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

           S.A.C. Capital Advisors, LLC
---------- ---------------------------------------------------------------------
        2  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
                                                                      (a) [ ]
                                                                      (b) [X]
---------- ---------------------------------------------------------------------
        3  SEC USE ONLY
---------- ---------------------------------------------------------------------
        4  CITIZENSHIP OR PLACE OF ORGANIZATION

           Delaware
--------------------- ----- ----------------------------------------------------
                         5  SOLE VOTING POWER

                            0
NUMBER OF             ----- ----------------------------------------------------
SHARES                   6  SHARED VOTING POWER
BENEFICIALLY
OWNED                       7,495,960* (see Item 4)
BY                    ----- ----------------------------------------------------
EACH                     7  SOLE DISPOSITIVE POWER
REPORTING
PERSON                      0
WITH                  ----- ----------------------------------------------------
                         8  SHARED DISPOSITIVE POWER

                            7,495,960* (see Item 4)
---------- ---------------------------------------------------------------------
        9  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

           7,495,960* (see Item 4)
---------- ---------------------------------------------------------------------
       10  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES

           [ ]
---------- ---------------------------------------------------------------------
       11  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)

           5.2%* (see Item 4)
---------- ---------------------------------------------------------------------
       12  TYPE OF REPORTING PERSON*

           00
---------- ---------------------------------------------------------------------

                       *SEE INSTRUCTION BEFORE FILLING OUT


                                  Page 2 of 10



<PAGE>


-------------------                                           ------------------
CUSIP No. 232806109                   13G                     Page 3 of 10 Pages
-------------------                                           ------------------

---------- ---------------------------------------------------------------------
        1  NAME OF REPORTING PERSON
           I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

           S.A.C. Capital Management, LLC
---------- ---------------------------------------------------------------------
        2  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
                                                                      (a) [ ]
                                                                      (b) [X]
---------- ---------------------------------------------------------------------
        3  SEC USE ONLY
---------- ---------------------------------------------------------------------
        4  CITIZENSHIP OR PLACE OF ORGANIZATION

           Delaware
--------------------- ----- ----------------------------------------------------
                         5  SOLE VOTING POWER

                            0
NUMBER OF             ----- ----------------------------------------------------
SHARES                   6  SHARED VOTING POWER
BENEFICIALLY
OWNED                       7,495,960* (see Item 4)
BY                    ----- ----------------------------------------------------
EACH                     7  SOLE DISPOSITIVE POWER
REPORTING
PERSON                      0
WITH                  ----- ----------------------------------------------------
                         8  SHARED DISPOSITIVE POWER

                            7,495,960* (see Item 4)
---------- ---------------------------------------------------------------------
        9  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

           7,495,960* (see Item 4)
---------- ---------------------------------------------------------------------
       10  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES

           [ ]
---------- ---------------------------------------------------------------------
       11  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)

           5.2%* (see Item 4)
---------- ---------------------------------------------------------------------
       12  TYPE OF REPORTING PERSON*

           00
---------- ---------------------------------------------------------------------

                       *SEE INSTRUCTION BEFORE FILLING OUT


                                  Page 3 of 10



<PAGE>


-------------------                                           ------------------
CUSIP No. 232806109                   13G                     Page 4 of 10 Pages
-------------------                                           ------------------

---------- ---------------------------------------------------------------------
        1  NAME OF REPORTING PERSON
           I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

           Canvas Capital Management, LP
---------- ---------------------------------------------------------------------
        2  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
                                                                      (a) [ ]
                                                                      (b) [X]
---------- ---------------------------------------------------------------------
        3  SEC USE ONLY
---------- ---------------------------------------------------------------------
        4  CITIZENSHIP OR PLACE OF ORGANIZATION

           Delaware
--------------------- ----- ----------------------------------------------------
                         5  SOLE VOTING POWER

                            0
NUMBER OF             ----- ----------------------------------------------------
SHARES                   6  SHARED VOTING POWER
BENEFICIALLY
OWNED                       300,000+ (see Item 4)
BY                    ----- ----------------------------------------------------
EACH                     7  SOLE DISPOSITIVE POWER
REPORTING
PERSON                      0
WITH                  ----- ----------------------------------------------------
                         8  SHARED DISPOSITIVE POWER

                            300,000+ (see Item 4)
---------- ---------------------------------------------------------------------
        9  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

           300,000+ (see Item 4)
---------- ---------------------------------------------------------------------
       10  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES

           [ ]
---------- ---------------------------------------------------------------------
       11  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)

           0.2%+ (see Item 4)
---------- ---------------------------------------------------------------------
       12  TYPE OF REPORTING PERSON*

           00
---------- ---------------------------------------------------------------------

                       *SEE INSTRUCTION BEFORE FILLING OUT


                                  Page 4 of 10



<PAGE>


-------------------                                           ------------------
CUSIP No. 232806109                   13G                     Page 5 of 10 Pages
-------------------                                           ------------------

---------- ---------------------------------------------------------------------
        1  NAME OF REPORTING PERSON
           I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

           Steven A. Cohen
---------- ---------------------------------------------------------------------
        2  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
                                                                      (a) [ ]
                                                                      (b) [X]
---------- ---------------------------------------------------------------------
        3  SEC USE ONLY
---------- ---------------------------------------------------------------------
        4  CITIZENSHIP OR PLACE OF ORGANIZATION

           United States
--------------------- ----- ----------------------------------------------------
                         5  SOLE VOTING POWER

                            0
NUMBER OF             ----- ----------------------------------------------------
SHARES                   6  SHARED VOTING POWER
BENEFICIALLY
OWNED                       7,795,960*+ (see Item 4)
BY                    ----- ----------------------------------------------------
EACH                     7  SOLE DISPOSITIVE POWER
REPORTING
PERSON                      0
WITH                  ----- ----------------------------------------------------
                         8  SHARED DISPOSITIVE POWER

                            7,795,960*+ (see Item 4)
---------- ---------------------------------------------------------------------
        9  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

           7,795,960*+ (see Item 4)
---------- ---------------------------------------------------------------------
       10  CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES

           [ ]
---------- ---------------------------------------------------------------------
       11  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)

           5.4%*+ (see Item 4)
---------- ---------------------------------------------------------------------
       12  TYPE OF REPORTING PERSON*

           IN
---------- ---------------------------------------------------------------------

                       *SEE INSTRUCTION BEFORE FILLING OUT


                                  Page 5 of 10



<PAGE>


Item 1(a)           Name of Issuer:
                    --------------

                    Cypress Semiconductor Corporation

Item 1(b)           Address of Issuer's Principal Executive Offices:
                    -----------------------------------------------

                    198 Champion Court
                    San Jose, CA 95134

Items 2(a)          Name of Person Filing:
                    ---------------------

                    This statement is filed by: (i) S.A.C. Capital Advisors,
                    LLC, ("SAC Capital Advisors") with respect to shares of
                    common stock ("Shares") of the Issuer beneficially owned by
                    S.A.C. Capital Associates, LLC ("SAC Capital Associates"),
                    S.A.C. Arbitrage Fund, LLC ("SAC Arbitrage") and S.A.C.
                    Select Fund, LLC ("SAC Select"); (ii) S.A.C. Capital
                    Management, LLC, ("SAC Capital Management") with respect to
                    Shares beneficially owned by SAC Capital Associates, SAC
                    Arbitrage and SAC Select; (iii) Canvas Capital Management,
                    LP ("Canvas Capital Management") with respect to Shares
                    beneficially owned by Canvas Capital Associates, LLC
                    ("Canvas Capital Associates"); and (iv) Steven A. Cohen with
                    respect to Shares beneficially owned by SAC Capital
                    Advisors, SAC Capital Management, SAC Associates, SAC
                    Arbitrage, SAC Select, Canvas Capital Management and Canvas
                    Capital Associates.

Item 2(b)           Address of Principal Business Office:
                    ------------------------------------

                    The address of the principal business office of (i) SAC
                    Capital Advisors and Mr. Cohen is 72 Cummings Point Road,
                    Stamford, Connecticut 06902, (ii) SAC Capital Management is
                    540 Madison Avenue, New York, New York 10022, and (iii)
                    Canvas Capital Management is 101 California Street, Suite
                    4225, San Francisco, California 94111.

Item 2(c)           Citizenship:
                    -----------

                    SAC Capital Advisors and SAC Capital Management are Delaware
                    limited liability companies. Canvas Capital Management is a
                    Delaware limited partnership. Mr. Cohen is a United States
                    citizen.

Item 2(d)           Title of Class of Securities:
                    ----------------------------

                    Common Stock


                                  Page 6 of 10



<PAGE>


Item 2(e)           CUSIP Number:
                    ------------

                    232806109

Item 3              Not Applicable

Item 4              Ownership:
                    ---------

                    The percentages used herein are calculated based upon the
                    Shares issued and outstanding as of August 1, 2006 as
                    reported on the Issuer's quarterly report on Form 10-Q with
                    the Securities and Exchange Commission by the Issuer for the
                    quarterly period ended July 2, 2006.

                    As of the close of business on October 6, 2006:

                    1. S.A.C. Capital Advisors, LLC
                    (a) Amount beneficially owned: 7,495,960*
                    (b) Percent of class: 5.2%*
                    (c) (i) Sole power to vote or direct the vote: -0-
                    (ii) Shared power to vote or direct the vote: 7,495,960*
                    (iii) Sole power to dispose or direct the disposition: -0-
                    (iv) Shared power to dispose or direct the disposition:
                    7,495,960*

                    2. S.A.C. Capital Management, LLC
                    (a) Amount beneficially owned: 7,495,960*
                    (b) Percent of class: 5.2 %*
                    (c) (i) Sole power to vote or direct the vote: -0-
                    (ii) Shared power to vote or direct the vote: 7,495,960*
                    (iii) Sole power to dispose or direct the disposition: -0-
                    (iv) Shared power to dispose or direct the disposition:
                    7,495,960*


                                  Page 7 of 10



<PAGE>


                    3. Canvas Capital Management, LP
                    (a) Amount beneficially owned: 300,000+
                    (b) Percent of class: 0.2 %+
                    (c) (i) Sole power to vote or direct the vote: -0-
                    (ii) Shared power to vote or direct the vote: 300,000+
                    (iii) Sole power to dispose or direct the disposition: -0-
                    (iv) Shared power to dispose or direct the disposition:
                    300,000+

                    4. Steven A. Cohen
                    (a) Amount beneficially owned: 7,795,960* +
                    (b) Percent of class: 5.4*+%
                    (c) (i) Sole power to vote or direct the vote: -0-
                    (ii) Shared power to vote or direct the vote: 7,795,960* +
                    (iii) Sole power to dispose or direct the disposition: -0-
                    (iv) Shared power to dispose or direct the disposition:
                    7,795,960* +

                    * The number of shares reported herein includes 1,655,160
                    Shares issuable upon conversion of $30 million aggregate
                    principal amount of the Issuer's 1.25% Convertible
                    Subordinated Plus Cash Notes due June 15, 2008 held by SAC
                    Arbitrage.

                    + The number of shares reported herein includes 50,000
                    Shares issuable upon exercise of options held by Canvas
                    Capital Associates.

                    SAC Capital Advisors, SAC Capital Management, Canvas Capital
                    Management and Mr. Cohen own directly no Shares. Pursuant to
                    investment agreements, each of SAC Capital Advisors and SAC
                    Capital Management share all investment and voting power
                    with respect to the securities held by SAC Capital
                    Associates, SAC Arbitrage and SAC Select. Pursuant to Canvas
                    Capital Associates' operating agreement, Canvas Capital
                    Management maintains investment and voting power with
                    respect to the securities held by Canvas Capital Associates.
                    Mr. Cohen controls each of SAC Capital Advisors, SAC Capital
                    Management and Canvas Capital Management. By reason of the
                    provisions of Rule 13d-3 of the Securities Exchange Act of
                    1934, as amended, each of (i) SAC Capital Advisors, SAC
                    Capital Management and Mr. Cohen may be deemed to own
                    beneficially 7,495,960* Shares (constituting approximately
                    5.2%* of the Shares outstanding) and (ii) Canvas Capital
                    Management and Mr. Cohen may be deemed to own beneficially
                    300,000+ Shares (constituting approximately 0.2%+ of the
                    Shares outstanding). Each of SAC Capital Advisors, SAC
                    Capital Management, Canvas Capital Management, and Mr. Cohen
                    disclaim beneficial ownership of any of the securities
                    covered by this statement.


                                  Page 8 of 10



<PAGE>


Item 5              Ownership of Five Percent or Less of a Class:
                    --------------------------------------------

                    If this statement is being filed to report the fact that as
                    of the date hereof the reporting person has ceased to be the
                    beneficial owner of more than five percent of the class of
                    securities, check the following. [ ]

Item 6              Ownership of More than Five Percent on Behalf of Another
                    --------------------------------------------------------
                    Person:
                    ------

                    Not Applicable

Item 7              Identification and Classification of the
                    ----------------------------------------
                    Subsidiary Which Acquired the Security Being
                    --------------------------------------------
                    Reported on By the Parent Holding Company:
                    -----------------------------------------

                    Not Applicable

Item 8              Identification and Classification of Members
                    --------------------------------------------
                    of the Group:
                    ------------

                    Not Applicable

Item 9              Notice of Dissolution of Group:
                    ------------------------------

                    Not Applicable

Item 10             Certification:
                    -------------

     By signing below the signatory certifies that, to the best of his knowledge
and belief, the securities referred to above were not acquired and are not held
for the purpose of or with the effect of changing or influencing the control of
the issuer of the securities and were not acquired and are not held in
connection with or as a participant in any transaction having that purpose or
effect.


                                  Page 9 of 10



<PAGE>


                                    SIGNATURE
                                    ---------

     After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.

Dated:  October 17, 2006


S.A.C. CAPITAL ADVISORS, LLC


By: /s/ Peter Nussbaum
    ----------------------------
Name:   Peter Nussbaum
Title:  Authorized Person


S.A.C. CAPITAL MANAGEMENT, LLC


By: /s/ Peter Nussbaum
    ----------------------------
Name:   Peter Nussbaum
Title:  Authorized Person


CANVAS CAPITAL MANAGEMENT, LP


By: /s/ Peter Nussbaum
    ----------------------------
Name:   Peter Nussbaum
Title:  Authorized Person

STEVEN A. COHEN


By: /s/ Peter Nussbaum
    ----------------------------
Name:   Peter Nussbaum
Title:  Authorized Person


                                 Page 10 of 10