<PAGE>1

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No. ____________ ).

Filed by the Registrant  [X]
Filed by a Party other than the Registrant  [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12


CYPRESS SEMICONDUCTOR CORPORATION
- --------------------------------------------------
(Name of Registrant as specified in its charter)

CYPRESS SEMICONDUCTOR CORPORATION
- --------------------------------------------------
(Name of person(s) filing proxy statement)

Payment of filing fee (Check the appropriate box):

[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act 
      14a-6(i)(3).
[ ] Fee Computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities
    to which transaction applies:    _____________________________________

(2) Aggregate number of securities
    to which transaction applies:    _____________________________________

(3) Per unit price or other underlying value of transaction computed pursuant 
    to Exchange Act Rule 0-11: _______________________________________

(4) Proposed maximum aggregate value of transaction:  _______________________

(A) Set forth the amount on which the filing fee is calculated and state how it
    was determined.

[ ] Check the box if any part of the fee is offset as provided by Exchange Act
    Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
    paid previously.  Identify the previous filing by registration statement
    number, or the Form or Schedule and the date of filing.

(1) Amount Previously Paid: _______________________________

(2) Form, Schedule, or Registration Statement No.: __________________________

(3) Filing Party: ____________________________________

(4) Date Filed: ___________________________________






<PAGE>2


                                                                 
                                                                April 28, 1997


Dear Stockholder:

     You are cordially invited to attend the Cypress Semiconductor Corporation
Annual Meeting of Stockholders to be held on Tuesday, May 13, 1997 at 10:00
a.m., local time, at the Company's offices located at 3939 North First Street,
San Jose, California 95134.

     At the Annual Meeting, you will be asked to elect five directors and
approve the appointment of Price Waterhouse LLP as the Company's independent
accountants for this fiscal year.

     We hope you will be able to attend the Annual Meeting on May 13th for a
report on the status of the Company's business and performance during 1996. 
There will be an opportunity for stockholders to ask questions.  Whether or not
you plan to attend the meeting, please sign and return the enclosed proxy card
to ensure your representation at the meeting.


                                          Very truly yours,


                                          T.J. Rodgers, President and CEO





































<PAGE>3

                       CYPRESS SEMICONDUCTOR CORPORATION


                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                                   May 13, 1997            


TO THE STOCKHOLDERS:

     NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Cypress
Semiconductor Corporation (the "Company"), a Delaware corporation, will be held
on Tuesday, May 13, 1997 at 10:00 a.m., local time, at its offices located at
3939 North First Street, San Jose, California 95134, for the following
purposes:

1. To elect five directors to serve for the ensuing year and until their
   successors are elected.

2. To ratify the appointment of Price Waterhouse LLP as independent accountants
   of the Company for the fiscal year ending December 29, 1997.

3. To transact such other business as may properly come before the meeting or
   any adjournment thereof.

     The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.

     Only stockholders of record at the close of business on March 14, 1997 are
entitled to receive notice of, to attend and to vote at the meeting and any
adjournment thereof.
 
     All stockholders are cordially invited to attend the meeting in person. 
Any stockholder attending the meeting may vote in person even if such
stockholder returned a proxy.


                                                FOR THE BOARD OF DIRECTORS

                                                Emmanuel Hernandez, Secretary


San Jose, California
A
pril 28, 1997









IMPORTANT:  WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE
IN ORDER TO ENSURE REPRESENTATION OF YOUR SHARES.  NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES.







<PAGE>4

                       CYPRESS SEMICONDUCTOR CORPORATION          
            
                                _______________


              PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

     The enclosed Proxy is solicited on behalf of the Board of Directors of
Cypress Semiconductor Corporation (the "Company") for use at the Company's
Annual Meeting of Stockholders ("Annual Meeting") to be held Tuesday, May 13,
1997, at 10:00 a.m., local time, or at any adjournment(s) or postponement(s)
thereof, for the purposes set forth herein and in the accompanying Notice of
Annual Meeting of Stockholders.  The Annual Meeting will be held at 3939 North
First Street, San Jose, California 95134.

     The Company's principal executive offices are located at 3901 North First
Street, San Jose, California 95134.  The telephone number at that address is
(408) 943-2600.

     These proxy solicitation materials were mailed on or about April 28, 1997
to all stockholders entitled to vote at the Annual Meeting.


                 INFORMATION CONCERNING SOLICITATION AND VOTING


RECORD DATE AND SHARES OUTSTANDING

     Stockholders of record at the close of business on March 14, 1997 (the
"Record Date") are entitled to notice of, and to vote at, the Annual Meeting. 
At the Record Date, 81,600,800 shares of the Company's Common Stock were
outstanding.

REVOCABILITY OF PROXIES

     Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a later
date or by attending the Annual Meeting and voting in person.

VOTING AND SOLICITATION

     Every stockholder voting for the election of directors may cumulate such
stockholder's votes and give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of votes to which 
the stockholder's shares are entitled, or distribute such stockholder's votes 
on the same principle among as many candidates as the stockholder may select,
provided that votes cannot be cast for more than five candidates.  However, no
stockholder shall be entitled to cumulate votes unless the candidate's name has
been placed in nomination prior to the voting and the stockholder, or any other
stockholder, has given notice at the meeting prior to the voting of the
intention to cumulate the stockholder's votes.  On all other matters each share
has one vote.










<PAGE>5

     The cost of this solicitation will be borne by the Company.  The Company
may reimburse brokerage firms and other persons representing beneficial owners
of shares for their expenses in forwarding solicitation material to such
beneficial owners.  Proxies may also be solicited by certain of the Company's
directors, officers and regular employees, without additional compensation,
personally or by telephone or telegram.

                                     - 2 -


QUORUM; ABSTENTIONS; BROKER NON-VOTES

     The required quorum for the transaction of business at the Annual Meeting
is a majority of the shares of Common Stock outstanding on the Record Date. 
Shares that are voted "FOR," "AGAINST" or "WITHHELD" from a matter are treated
as being present at the meeting for purposes of establishing a quorum and are
also treated as votes eligible to be cast by the Common Stock present in person
or represented by proxy at the Annual Meeting and "entitled to vote on the
subject matter" (the "Votes Cast") with respect to such matter.

     While abstentions (votes "withheld") will be counted for purposes of
determining both the presence or absence of a quorum for the transaction of
business and the total number of Votes Cast with respect to a particular 
matter, broker non-votes with respect to proposals set forth in this Proxy
Statement will not be considered "Votes Cast" and, accordingly, will not affect
the determination as to whether the requisite majority of Votes Cast has been
obtained with respect to a particular matter.

DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS

      Proposals of stockholders of the Company which are intended to be
presented by such stockholders at the Company's 1998 Annual Meeting must be
received by the Company no later than December 28, 1997 in order to be included
in the proxy statement and form of proxy relating to that meeting.





















                                     - 3 -







<PAGE>6


                      PROPOSAL ONE - ELECTION OF DIRECTORS

NOMINEES

     A Board of five directors is to be elected at the meeting.  Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the five nominees named below, all of whom are presently directors of the
Company.  In the event that any nominee is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be voted for any
nominee who shall be designated by the present Board of Directors to fill the
vacancy.  In the event that additional persons are nominated for election as
directors, the proxy holders intend to vote all proxies received by them in 
such a manner in accordance with cumulative voting as will ensure the election
of as many of the nominees listed below as possible.  In such event, the
specific nominees for whom such votes will be cumulated will be determined by
the proxy holders.  The term of office of each person elected as a director 
will continue until the next Annual Meeting of Stockholders or until his
successor has been elected and qualified.  It is not expected that any nominee
will be unable or will decline to serve as a director.

The name of and certain information regarding each nominee is set forth below.


                                                                  
 DIRECTOR
  NAME OF NOMINEE     AGE(1)          PRINCIPAL OCCUPATION           SINCE
- -------------------  --------  ----------------------------------  ----------   
T.J. Rodgers            49     President and Chief Executive          1982 
                               Officer of the Company

Pierre R. Lamond        66     General Partner, Sequoia Partners      1983

Fred B. Bialek          63     Business Consultant                    1991

Eric A. Benhamou        41     President and Chief Executive          1993
                               Officer of 3COM Corporation

John C. Lewis           61     Chairman of the Board of Amdahl        1993
                               Corporation

     Except as set forth below, each of the nominees has been engaged in his
principal occupation described above during the past five years.  There are no
family relationships among directors or executive officers of the Company.

     T.J.Rodgers is a co-founder of the Company and has been its President and
Chief Executive Officer since 1982.  Mr.Rodgers serves as a director of Vitesse
Semiconductor Corporation and C-Cube Corporation.

     Pierre R. Lamond has been a general partner of Sequoia Partners, which
manages several venture capital funds, including Sequoia Capital IV, Sequoia
Capital V and Sequoia Capital Growth Fund, since 1981.  Mr. Lamond serves as a
director of Vitesse Semiconductor Corporation, CKS Group, Inc. and VidaMed, Inc.




                                     - 4 -
 





<PAGE>7

     Fred B. Bialek has been an independent business consultant since November
1986, during which time he has been active in the negotiation and execution of
merger and acquisition transactions for semiconductor and other technology
companies.  Mr. Bialek has acted as a consultant to Cypress in certain of its
acquisitions, including Cypress Semiconductor (Minnesota) Inc. ("CMI"), the
Company's third wafer fabrication facility.  Mr. Bialek, who was a founder of
National Semiconductor Corporation, has over 30 years operating experience in
semiconductor and related technology industries.

     Eric A. Benhamou was Vice President and General Manager of 3COM 
Corporation ("3COM"), a data Networking company, from September 1987 to April
1990.  From April 1990 to September 1990, he was Chief Operating Officer of
3COM.  In September 1990, he was promoted to President and Chief Executive
Officer of 3COM, a position in which he has served since then.  Mr. Benhamou is
a director of 3COM.

     John C. Lewis has been Chairman of the Board of Amdahl Corporation, a
computer manufacturer, since 1987.  He was President of Amdahl from 1977 until
1987, and Chief Executive Officer of Amdahl from 1983 until 1992.  Mr. Lewis is
also a director of Vitesse Semiconductor Corporation, Pinnacle Systems, Inc. 
and Infinity Financial Technology, Inc.

REQUIRED VOTE

     The five nominees receiving the highest number of affirmative votes of the
shares present or represented and entitled to be voted for them shall be 
elected as directors.  Votes withheld from any director are counted for 
purposes of determining the presence or absence of a quorum for the transaction
of business, but have no further legal effect under Delaware law.

BOARD MEETINGS AND COMMITTEES

     Pierre R. Lamond serves as Chairman of the Board of Directors of the
Company.  The Board of Directors held a total of seven meetings during the
fiscal year ended December 30, 1996.  During fiscal 1996, no director attended
fewer than 75% of all such meetings of the Board of Directors and of the
committees, if any, upon which such director served.  The Board of Directors 
has an Audit Committee and a Compensation Committee.  The Board of Directors
does not have a nominating committee or any committee performing similar
functions.

     The principal functions of the Audit Committee, which consists of Messrs.
Lamond and Lewis, are: (1) to consult with the Company's independent 
accountants concerning the scope of the audit and to review with them the
results of their examination; and (2) to review and approve any material
accounting policy changes affecting the Company's operating results and to
review the Company's control procedures and personnel.  The Audit Committee 
held two meetings in fiscal 1996.

    The Compensation Committee, which consists of Messrs. Lamond and Benhamou,
reviews compensation and benefits for the Company's senior executives and has
authority to grant stock options under the Company's 1994 Stock Option Plan, as
amended (the "1994 Option Plan") to employees and consultants (including
officers and directors who are also employees or consultants of the Company). 
The Compensation Committee held seven meetings during fiscal 1996.

                                     - 5 -






<PAGE>8


COMPENSATION OF DIRECTORS

     STANDARD ARRANGEMENTS

     Directors who are not employees receive $5,000 each quarter.

     The 1994 Option Plan provides for the automatic grant of nonstatutory
options to outside directors of the Company.  Each outside director is granted
an initial option to purchase 80,000 shares of Common Stock (the "Initial
Option") and an additional option to purchase 20,000 shares of Common Stock (a
"Subsequent Option") on a date one year after the date of grant of the Initial
Option and on the same date each year thereafter.  The Initial Option becomes
exercisable over a five-year period in annual installments of 16,000 shares,
with the first such installment exercisable one year from the outside 
director's election to the Board.  The Subsequent Options become exercisable
five years after the date on which they are granted in annual installments of
4,000 shares, with the first such installments exercisable one year from the
date of grant.  Consequently, the 1994 Option Plan provides for an on-going
vesting program of 20,000 shares per year to outside directors.  The exercise
price of options granted under the 1994 Option Plan is the fair market value of
the Company's Common Stock on the date of grant. 

OTHER ARRANGEMENTS

     The Company has a consulting relationship with one of its directors, Fred
B. Bialek.  See "Certain Transactions."





























                                     - 6 -







<PAGE>9

                                   MANAGEMENT


S
ECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of the Record Date by (i) each person
who is known by the Company to own beneficially more than 5% of the Company's
Common Stock, (ii) each of the Company's directors, (iii) the Company's Chief
Executive Officer and each of the four other most highly compensated individuals
who served as executive officers of the Company at fiscal year end (the "Named
Officers") and (iv) all individuals who served as directors or executive
officers at fiscal year end as a group:


 
                                                   SHARES BENEFICIALLY OWNED
                                                   ----------------------------
DIRECTORS, OFFICERS AND 5% STOCKHOLDERS               NUMBER         PERCENT
- -------------------------------------------------  -------------  -------------

DIRECTORS
   
  T.J. Rodgers(1)                                      1,731,730       2.1%     

  Pierre R. Lamond(2)                                    217,254        *
  Fred B. Bialek(3)                                      316,836        *
  Eric A. Benhamou(4)                                     60,000        *
  John C. Lewis(5)                                        74,000        *

NAMED OFFICERS

  J. Daniel McCranie(6)                                   41,031        *
  Antonio L. Alvarez(7)                                  121,934        *
  Emmanuel Hernandez(8)                                  122,116        *   
  Lothar Maier(9)                                        128,204        *
  All directors and executive officers at fiscal
  year end as a group (9 persons)(10)                  2,813,105       3.5%


 * Less than 1%.

(1)  Mr. Rodgers is also President and Chief Executive Officer of the Company.
     Includes options to purchase 1,182,593 shares of Common Stock exercisable
     within 60 days of the Record Date.

(2)  Includes 177,254 shares held by the Lamond Living Trust.  Also includes
     options held by Mr. Lamond to purchase 40,000 shares of Common Stock
     exercisable within 60 days of the Record Date.

(3)  Represents options to purchase 316,836 shares of Common Stock exercisable
     within 60 days of the Record Date.

(4)  Represents options to purchase 60,000 shares of Common Stock exercisable
     within 60 days of the Record Date.










<PAGE>10

(5)  Represents options to purchase 74,000 shares of Common Stock exercisable
     within 60 days of the Record Date.

(6)  Represents options to purchase 41,031 shares of Common Stock exercisable
     within 60 days of Record Date.

(7)  Represents options to purchase 121,934 shares of Common Stock exercisable
     within 60 days of the Record Date.

(8)  Includes shares transferred to his children of 6,075 and options to 
     purchase 115,470 shares of Common Stock exercisable within 60 days of the
     Record Date.

(9)  Includes options to purchase 121,032 shares of Common Stock exercisable
     within 60 days of the Record Date.

(10) Includes options held by executive officers and directors of the Company 
     to purchase an aggregate of 2,072,896 shares of Common Stock exercisable
     within 60 days of the Record Date.



































                                     - 7 -







<PAGE>11


EXECUTIVE COMPENSATION

     The following table shows, as to each of the Named Officers, information
concerning compensation paid for services to the Company in all capacities
during the three fiscal years ended December 30, 1996:


                           SUMMARY COMPENSATION TABLE

                                                       LONG-TERM
                            ANNUAL COMPENSATION       COMPENSATION
                                                         AWARDS
    NAME AND                                           SECURITIES   ALL OTHER
    PRINCIPLE                                          UNDERLYING  COMPENSATION
    POSITION      YEAR SALARY(1)  BONUS(2)    OTHER(4) OPTIONS (#)     (5)     
- ----------------  ---- ---------  --------    -------- ----------- ------------
T.J. Rodgers      1996  $278,976  $  3,750(3)       --     300,000           --
 President,       1995  $278,884  $236,813          --     200,000           -- 
 Chief Executive  1994  $278,911  $109,253          --     300,000           -- 
 Officer and
 Director

J. Daniel         1996  $259,345  $  1,250          --      52,500         $600 
 McCranie         1995  $268,212  $219,793          --          --         $208 
 Vice President,  1994  $267,747  $ 86,128          --     200,000           --
 Marketing and
 Sales

Antonio Alvarez   1996  $196,285  $  1,250          --      94,500           --
 Vice President,  1995  $195,625  $160,043     $11,775     146,930           -- 
 Research and     1994  $196,180  $ 70,208          --      38,250           -- 
 Development

Lothar Maier      1996  $180,265  $  1,250     $88,027      52,500         $454
 Vice President,  1995  $184,730  $157,317     $61,354     160,060         $450
 Wafer Manufac-   1994  $163,196  $ 64,047     $35,274      86,000         $550
 turing, and 
 President 
 Cypress Semi-
 conductor
 (Minnesota) Inc.

Emmanuel          1996  $180,265  $  1,250          --      52,500         $600
 Hernandez        1995  $171,685  $162,167          --     116,458           -- 
 Vice President,  1994  $159,458  $ 59,994          --      58,000           -- 
 Finance and
 Administration,
 and Chief 
 Financial 
 Officer 

________________
                                                         
(1) Compensation is included in the year earned.









<PAGE>12

(2) Includes cash profit sharing awarded to each employee under the Company's
    Employee Profit Sharing Plan.  Fiscal 1995 and fiscal 1994 bonuses also
    include amounts earned under the Company's 1995 key employee bonus plan and
    1994 key employee bonus plan, respectively, by virtue of the Company's
    achievement of a target level of earnings per share, as well as success in
    accomplishing certain group- and individual-specific goals, in fiscal 1995
    and fiscal 1994, respectively.  No bonuses were earned under the 1996 key
    employee bonus plan; however, bonuses earned in the fourth quarter of 
    fiscal 1995 were paid in fiscal 1996 and were dependent upon each 
    employee's continuous status as an employee of the Company at the time of
    such payout.

(3) Represents cash bonus of $2,500 under the Company's Patent Award program.

(4) Represents cash payout of PTO earned of $11,775 for Mr. Alvarez and $10,385 
    for Mr. Maier and annual compensation paid in connection with Mr. Maier's
    relocation of $77,642.

(5) Represents that portion of the Company's contribution toward the purchase 
    of computers made pursuant to its Computer Program, which is available to
    all employees.


































                                     - 8 -







<PAGE>13

     The following table shows, as to each of the Named Officers, option grants
during the last fiscal year and the potential realizable value of those options,
assuming 5% and 10% appreciation, at the end of their term:

                          OPTION GRANTS IN FISCAL 1996


INDIVIDUAL GRANTS
                                                                  
              
                         # OF TOTAL                       POTENTIAL REALIZABLE
             NUMBER OF     OPTIONS                          VALUE AT ASSUMED
             SECURITIES  GRANTED TO                       ANNUAL RATES OF STOCK
             UNDERLYING  EMPLOYEES                         PRICE APPRECIATION
              OPTIONS    IN FISCAL  EXERCISE  EXPIRATION     FOR OPTION TERM
  NAME       GRANTED(1)   YEAR(2)   PRICE(3)    DATE(4)      5%(5)     10%(5)
- ------------ ----------  ---------- --------  ----------  ---------- ----------
T.J. Rodgers    300,000        5.5%   $10.75    10/24/06  $2,028,185 $5,139,819
J. Daniel
 McCranie        52,500        1.0    $10.75    10/24/06     354,932    899,468
Antonio L.
 Alvarez         94,500        1.7    $10.75    10/24/06     638,878  1,619,043
Lothar Maier     52,500        1.0    $10.75    10/24/06     354,932    899,468
Emmanuel
 Hernandez       52,500        1.0    $10.75    10/24/06     354,932    899,468

______________
 
(1) Options granted under the Company's 1994 Stock Option Plan typically have a
    10-year term, vest over a five-year period of employment and have an
    exercise price equal to market value on the date of grant.

(2) Options to purchase an aggregate of 5,428,029 shares of Common Stock of the
    Company were granted to employees during the fiscal year ended December 30,
    1996.

(3) The exercise price may be paid by check, cash or delivery of shares that 
    are already owned.

(4) Options may terminate before their expiration dates if the optionee's 
    status as an employee or consultant is terminated, upon the optionee's 
    death or upon an acquisition of the Company.

(5) Potential realizable value is based on an assumption that the market price
    of the stock appreciates at the stated rate, compounded annually, from the
    date of grant until the end of the ten-year option term.  These values are
    calculated based on requirements promulgated by the Securities and Exchange
    Commission and do not reflect the Company's estimate of future stock price
    appreciation.  Annual compounding results in total appreciation of 63% (at
    5% per year) and 159% (at 10% per year).  If the price of the Company's 
    Common Stock were to increase at such rates from the price at 1996 year end
    ($14.50 per share) over the next ten years, the resulting stock prices at 
    5% and 10% appreciation would be $23.62 and $37.61, respectively.


                                     - 9 -







<PAGE>14

     The following table shows, for each of the Named Officers, information
concerning options exercised during fiscal 1996 and the value of options held 
at fiscal year end:

                 AGGREGATED OPTION EXERCISES IN FISCAL 1996 AND
                      FISCAL 1996 YEAR-END OPTION VALUES


                                                   NUMBER OF SECURITIES
                                                  UNDERLYING UNEXERCISED
                     SHARES                     OPTIONS AT FISCAL YEAR END:
                   ACQUIRED ON    VALUE      ---------------------------------  

       NAME         EXERCISE(#)  REALIZED($)   EXERCISABLE     UNEXERCISABLE
- ------------------ -----------  -----------  --------------- -----------------
T.J. Rodgers           100,000   $1,025,000        1,182,593           568,335
J. Daniel McCranie      50,000      214,000           41,031           326,822
Antonio L. Alvarez           0            0          121,934           215,764
Lothar Maier                 0            0          121,032           198,560
Emmanuel Hernandez           0            0          115,470           161,488


                       VALUE OF UNEXERCISED
                       IN-THE-MONEY OPTIONS
                     AT FISCAL YEAR END($)(1):
                    ---------------------------
       NAME          EXERCISED    UNEXERCISED
- ------------------  ------------ --------------
T.J. Rodgers          $9,172,380     $2,006,781
J. Daniel McCranie       275,866      2,027,494
Antonio L. Alvarez       819,979        841,074
Lothar Maier             752,443        810,684
Emmanuel Hernandez       687,730        659,208

____________________
 
(1) Calculated by determining the difference between the fair market value of
    the securities underlying the options at December 30, 1996 ($14.50) and the
    exercise price of the options.


R
EPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

     OVERVIEW  

     The Compensation Committee of the Board of Directors has the 
responsibility to review compensation programs and benefits for the Company's
employees generally, and specifically for the executive officers of the 
Company, and has exclusive authority to grant stock options to the executive
officers of the Company.  The Company applies a consistent philosophy to
compensation for all employees including its executive officers, based on the
premise that the achievements of the Company result from the coordinated 
efforts of all individuals working toward common objectives.  The Company
strives to achieve those objectives through teamwork that is focused on meeting
the defined expectations of customers and stockholders.








<PAGE>15

     GOALS OF THE COMPANY'S COMPENSATION PROGRAM  

     The goals of the Compensation Committee are to align executive 
compensation with business objectives and performance, and to enable the 
Company to attract, retain and reward executive officers who contribute to the
long-term success of the Company.  The Company's compensation program for
executive officers is based on the same principles applicable to compensation
decisions for all employees of the Company:

       COMPETITIVE LEVELS OF COMPENSATION.  The Company is committed to
       providing a compensation program that helps attract and retain the best
       people in the industry.  To ensure that pay is competitive, the Company
       periodically reviews the compensation practices of other leading
       companies in the semiconductor industry.  The Company believes that its
       compensation levels fall within the median of industry compensation
       levels.

       PERFORMANCE-DRIVEN REWARDS.  Executive officers are rewarded based upon
       corporate performance, business unit performance and individual
       performance.  Corporate performance and business unit performance are
       evaluated by reviewing the extent to which strategic and business plan
       goals are met, including such factors as operating profit, performance
       relative to competitors and timely new product introductions.  
       Individual performance is evaluated by measuring organization progress
       against set objectives.


                                    - 10 -


       PERFORMANCE AND COMPENSATION FEEDBACK.  At the beginning of the 
       performance cycle, key quarterly and annual objectives are set for each
       officer.  The CEO gives ongoing feedback on performance to each officer.
       At the end of the performance cycle, the Compensation Committee 
       evaluates the extent to which the key objectives have been accomplished,
       which evaluation affects decisions on merit increases and stock option
       grants.

     COMPONENTS OF THE COMPANY'S COMPENSATION PROGRAM  

          The Company's compensation program, which consists of cash- and
     equity-based compensation, allows the Company to attract and retain 
     highly skilled officers, provide useful products and services to 
     customers, enhance stockholder value, motivate technological innovation 
     and adequately reward its executive officers and other employees.  The
     components are:

       CASH-BASED COMPENSATION:

            The Committee sets base salary for officers on the basis of level 
       of responsibility, prior performance and other factors after reviewing
       the compensation levels for competitive positions in the market.  

    









<PAGE>16

            The Company has a quarterly profit sharing plan under which it
       distributes to all employees, including executive officers, payments
       based on the Company's achieving a targeted level of earnings per share.
       The Company believes that all employees share the responsibility of
       achieving profits.  Accordingly, it awards an equal portion to all
       employees regardless of salary or position level.  Under the profit-
       sharing plan, specific Company performance criteria must be met for
       employees to be eligible for bonuses.  For 1996, the Company did not 
       meet these criteria for any quarter.

            The Company adopted a key employee bonus plan effective at the
       beginning of fiscal year 1996, in which the Chief Executive Officer,
       Company Vice Presidents and certain other key employees participated.
       Plan participants would have earned bonuses (in each case a percentage 
       of the participant's base salary) based on the Company's achievement of 
       a targeted level of earnings per share, as well as success in
       accomplishing certain group- and individual-specific goals.  The plan
       provided that no bonus would be awarded unless the Company achieved at
       least 90% of its earnings target for fiscal year 1996.  Based upon the
       Company's inability to meet the earnings target for 1996, no bonuses 
       will be awarded under the plan.

         EQUITY-BASED COMPENSATION:

              Stock options provide additional incentives to officers to work 
       to maximize stockholder value.  The options become exercisable over a
       defined period of employment with the Company to encourage officers to
       continue in the employ of the Company.  In line with its compensation
       philosophy, the Company grants stock options to all employees,
       commensurate with their potential contributions to the Company.  Stock
       options are included as part of the initial employment compensation
       package, and are also awarded for promotions and pursuant to the annual
       Evergreen Stock Program, which provides long-term incentives to 
       virtually all employees based on performance and potential
       contributions.

                                    - 11 -


     STOCK OPTION EXCHANGE

          In October 1996, the Board of Directors offered to all employees 
     (including officers) the opportunity to cancel outstanding stock options
     with exercise prices in excess of $11.00 per share (the fair market value
     of the common stock at that time) in exchange for options exercisable at
     $11.00 per share which were otherwise identical to the canceled options
     except that employees were restricted from exercising any vested portion 
     of the repriced options until April 24, 1997.  The option exchange was an
     acknowledgment of the importance to the Company of having equity 
     incentives in the hands of key employees.  Stock options which are "out of
     the money" provide no particular compensatory incentive if an employee is
     considering alternative opportunities.  The Committee decided to include
     officers (excluding T.J. Rodgers) in the exchange  because of the
     importance of their administrative and technical leadership to the success
     of the Company's business.








<PAGE>17

     The following table sets forth all exchange and repricings of officer stock
options since April 1987.

                         TEN-YEAR OPTION REPRICING TABLE

                                      MARKET                        LENGTH OF
                            NO. OF   PRICE OF   EXERCISE             ORIGINAL
                          SECURITIES STOCK AT   PRICE AT              OPTION
                          UNDERLYING  TIME OF    TIME OF            REMAINING
                           OPTIONS   REPRICING REPRICING            AT DATE OF
                           REPRICED     OF        OR        NEW     REPRICING
                          OR AMENDED AMENDMENT AMENDMENT  EXERCISE     OR
      NAME         DATE       (#)       ($)        ($)    PRICE($)  AMENDMENT 
- ---------------- -------- ---------- --------- ---------- -------- ------------
T.J. Rodgers     10/26/87     50,000    3.1250     6.0625   3.1250 9yrs., 9mos. 
 President,      11/21/88     80,000    4.0000     4.5625   4.0000 9yrs.,10mos.
 Chief Executive 01/22/90    200,000    4.1250     6.0625   4.1250 9yrs., 3mos. 
 Officer and
 Director

Antonio Alvarez  10/26/87     20,320    3.1250     6.0625   3.1250 9yrs., 9mos.
 Vice President, 01/22/90     16,000    4.1250     5.5625   4.1250 9yrs.    
 Research and    01/22/90     53,000    4.1250     6.3125   4.1250 9yrs., 9mos. 
 Development     01/21/90     57,000    4.1250     6.3125   4.1250 9yrs., 9mos.
                 04/30/92     26,398    4.7500     9.2500   4.7500 9yrs., 5mos.
                 04/30/92     80,000    4.7500     9.2500   4.7500 9yrs., 5mos.
                 10/24/96    146,930   11.0000    16.1875  11.0000 9yrs.

Lothar Maier     10/26/87     10,548    3.1250     3.3750   3.1250 9yrs.
 Vice President, 10/26/87      7,262    3.1250     6.0625   3.1250 9yrs., 9mos.
 Wafer Manufac-  11/21/88      6,352    4.0000     6.0625   4.0000 9yrs., 4mos.
 turing, and     11/21/88     11,354    4.0000     4.5625   4.0000 9yrs.,10mos.
 President       01/22/90      5,000    4.1250     6.0625   4.1250 9yrs., 3mos.
 Cypress Semi-   01/22/90     16,170    4.1250     5.5000   4.1250 9yrs., 7mos.
 conductor       04/30/92     12,306    4.7500     7.5625   4.7500 8yrs., 9mos.
 (Minnesota) Inc.04/30/92        406    4.7500     7.5625   4.7500 8yrs., 9mos.
                 04/30/92     13,070    4.7500     9.2500   4.7500 9yrs., 5mos.
                 04/30/92     87,694    4.7500     7.5625   4.7500 8yrs., 9mos.
                 04/30/92     42,714    4.7500     9.2500   4.7500 9yrs., 5mos.
                 10/24/96    160,060   11.0000    16.1875  11.0000 9yrs.

Emmanuel         10/24/96    116,458   11.0000    16.1875  11.0000 9yrs.
 Hernandez        
 Vice President,  
 Finance and
 Administration,
 and Chief 
 Financial 
 Officer 





                        
                                    - 12 -







<PAGE>18

     COMPENSATION OF THE CHIEF EXECUTIVE OFFICER

     T.J. Rodgers has been President and Chief Executive Officer of the Company
since its incorporation in 1982.  In determining Mr. Rodgers' compensation, the
Committee evaluates corporate performance, individual performance, compensation
paid to other executive officers of the Company and total compensation
(including salary, bonus and equity compensation) paid to chief executive
officers of comparable companies.  In 1996, Mr. Rodgers' annualized salary was
$278,976, and he received cash bonuses of $3,750 under the Employee Profit
Sharing Plan and Patent Award program.  A fundamental tenet of Cypress'
compensation policy, particularly with respect to compensation of the CEO, is 
to link the level of compensation obtained to the Company's performance as
measured by profitability and long-term growth.  One way that Cypress
establishes this link is to award Mr. Rodgers with compensation in the form of
options to purchase stock, since the market will reward superior Company 
performance by increasing the value of his equity and penalize unsatisfactory
performance by diminishing or eliminating such value.  Through his equity
ownership in the Company, which consisted of 549,137 shares of Common Stock and
options to purchase 1,750,928 shares of Common Stock on December 30, 1996, Mr.
Rodgers shares with the other stockholders of the Company a significant stake 
in the success of the Company's business.  A second way that Cypress 
establishes the link between Company performance and level of compensation is 
by its bonus plan, which awards variable compensation based to a substantial
degree on an objective measure of the Company's profitability and long-term
growth.  It is the philosophy of Cypress and this Committee to bias 
compensation toward this kind of variable compensation as well as equity 
awards, meaning that when the Company performs well, as principally indicated 
by profitability, employees, and in particular the CEO, will be very well
compensated, to a level which may exceed the median of industry compensation
levels.  When the Company's performance is below target levels, however,
variable compensation will be limited or non-existent and equity compensation
will not attain the same value, meaning that the CEO's overall compensation
package may well be below industry median levels.  Consistent with these
objectives, Mr. Rodgers was not awarded a bonus under the 1996 key employee
bonus plan.



                                                 COMPENSATION COMMITTEE OF THE 
                                                 BOARD OF DIRECTORS
                                                 -- Pierre R. Lamond
                                                 -- Eric A. Benhamou


COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     No member of the Compensation Committee was or is an officer or employee 
of the Company.  Pierre R. Lamond, Chairman of the Board of the Company, and
T.J. Rodgers, President, Chief Executive Officer and a director of the Company,
are directors and members of the Compensation Committee of the Board of
Directors of Vitesse Semiconductor Corporation ("Vitesse").  Mr. Lamond is also
Chairman of the Board of Vitesse.  Neither Cypress nor Vitesse treats Chairman
of the Board as an officer of the corporation for compensation purposes.  Mr.
Lamond is a general partner of a venture capital firm which invested in the
Company prior to its initial public offering in 1986. 

                                    - 13 -






<PAGE>19


CERTAIN TRANSACTIONS 

     In October 1993, J. Daniel McCranie, Vice President of Marketing and 
Sales, incurred $210,000 of indebtedness to the Company, which indebtedness
bears interest at 4% per annum and is unsecured.  In 1995, the Company and Mr.
McCranie agreed to extend the length of time that such indebtedness is payable
by two years, such that the indebtedness was due on October 7, 1998.  In the
event Mr. McCranie is still employed by the Company on October  7, 1998, the
promissory note will be cancelled and the indebtedness forgiven.

     In October 1993, the Company entered into a consulting arrangement (the
"1993 Consulting Agreement") with  Fred B. Bialek, a member of the Company's
Board of Directors.  Pursuant to the terms of the 1993 Consulting Agreement, as
amended in February 1994, Mr. Bialek was paid an annualized fixed retainer of
$242,000, which was increased on April 1 of each year by an amount equal to the
average percentage salary increase as approved by the Board of Directors for 
all Company employees.  Under the 1993 Consulting Agreement, Mr. Bialek was 
also granted a fully exercisable option to purchase 120,000 shares of the
Company's Common Stock and an additional option to purchase 240,000 shares of
the Company's Common Stock which vests over approximately two and one-half
years.  In April 1995, the Company entered into a new consulting arrangement
(the "1995 Consulting Agreement") with Mr. Bialek pursuant to which he was paid
an annualized fixed retainer of $269,346 and was granted an option to purchase
20,000 shares of the Company's Common Stock with a vesting period of five years
from the date of grant.  Pursuant to the terms of the 1995 Consulting 
Agreement, as amended April 1, 1996, Mr. Bialek's annual retainer was increased
to $284,160, payable in equal installments on the first day of each month and
Mr. Bialek was granted an option to purchase 20,000 shares of the Company's
Common Stock which vests five years from the date of grant.  In addition, Mr.
Bialek will be reimbursed for out-of-pocket business expenses for travel,
lodging, phone and administrative support related to his consulting services 
for the Company on receipt of invoice.  The amended 1995 Consulting Agreement
expires on April 1, 1997, but may be extended by mutual agreement of the 
Company and Mr. Bialek.  Prior to its expiration, the 1995 Consulting Agreement
is terminable by either the Company or Mr. Bialek 30 days following written
notice of such termination.

C
OMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     Section 16(a) of the Securities Exchange Act of 1934 requires the 
Company's officers and directors, and persons who own more than ten percent of 
a registered class of the Company's equity securities to file reports of
ownership on Form 3 and changes in ownership on Form 4 or 5 with the Securities
and Exchange Commission (the "SEC") and the National Association of Securities
Dealers.  Such officers, directors and 10% stockholders are also required by 
SEC rules to furnish the Company with copies of all Section 16(a) forms that
they file.

     Based solely on its review of the copies of such forms received by it, the
Company believes that, during the fiscal year ended December 30, 1996, all
Section 16(a) filing requirements applicable to its officers, directors and 10%
stockholders were satisfied.  











<PAGE>20

C
OMPANY STOCK PRICE PERFORMANCE

     The following graph shows a five-year comparison of cumulative total 
return for the Company's stock, the Standard & Poor's 500 Stock Index and the
S&P Electronic Index for Semiconductor and Component Manufacturers.


                                    - 14 -


  COMPANY STOCK PRICE PERFORMANCE

     The following graph shows a five-year comparison of cumulative total 
return for the Company's stock, the Standard & Poor's 500 Stock Index and the
S&P Electronic Index for Semiconductor and Component Manufacturers.


COMPARISON OF FIVE YEAR CUMULATIVE RETURN*


EXERCISE DATE                      RETURN   
- ----------------------------    -------------

Cypress Semiconductor Corp.
- ----------------------------
12/31/96                              $164.96                     
12/31/95                              $147.45
12/31/94                              $135.04
12/31/93                              $ 79.56
12/31/92                              $ 54.01
12/31/91                              $100.00

S & P 500 Index
- ----------------------------
12/31/96                              $177.60                     
12/31/95                              $147.67
12/31/94                              $110.11
12/31/93                              $111.83
12/31/92                              $104.46
12/31/91                              $100.00

S & P Electronic Index
- ----------------------------
12/31/96                              $614.78
12/31/95                              $391.78
12/31/94                              $289.76
12/31/93                              $249.11
12/31/92                              $162.49
12/31/91                              $100.00


* ASSUMES $100 INVESTED ON DECEMBER 31, 1991 IN EACH INVESTMENT.  TOTAL RETURN
  ASSUMES REINVESTMENT OF DIVIDENDS.  PAST RESULTS ARE NOT AN INDICATION OF
  FUTURE INVESTMENT RETURNS.


                                    - 15 -






<PAGE>21

 
                  PROPOSAL TWO - RATIFICATION OF APPOINTMENT
                           OF INDEPENDENT ACCOUNTANTS

     The Board of Directors has appointed Price Waterhouse LLP, independent
accountants, to audit the consolidated financial statements of  the Company for
the fiscal year ending December 29, 1997 and recommends that stockholders vote
for ratification of such appointment.  In the event of a negative vote on such
r
atification, the Board of Directors will reconsider its selection.

     Price Waterhouse LLP has audited the Company's financial statements
annually since 1982.  Its representatives are expected to be present at the
meeting, will have the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions.

REQUIRED VOTE; RECOMMENDATION OF THE BOARD OF DIRECTORS

     Affirmative votes constituting a majority of the Votes Cast will be
required to approve this proposal. 

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPOINTMENT OF
PRICE WATERHOUSE LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR FISCAL YEAR
1997.


                                 OTHER MATTERS

     The Company knows of no other matters to be submitted to the meeting.  If
any other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote the shares they represent as the
Board of Directors may recommend.

     It is important that your stock be represented at the meeting, regardless
of the number of shares which you hold.  You are, therefore, urged to execute
and return the accompanying proxy in the envelope which has been enclosed, at
your earliest convenience.


                                               FOR THE BOARD OF DIRECTORS

                                               Emmanuel Hernandez, Secretary


Dated:  April 28, 1997




















<PAGE>22

(Front Side of Proxy Card)

                        CYPRESS SEMICONDUCTOR CORPORATION

                  PROXY FOR 1997 ANNUAL MEETING OF STOCKHOLDERS
           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

     The undersigned stockholder of CYPRESS SEMICONDUCTOR CORPORATION, a
Delaware corporation, hereby acknowledges receipt of the Notice of Annual 
Meeting of Stockholders and Proxy Statement, each dated April 28, 1997, and
hereby appoints T.J. Rodgers and Emmanuel Hernandez, and each of them, proxies
and attorneys-in-fact, with full power to each of substitution, on behalf and 
in the name of the undersigned, to represent the undersigned at the 1997 Annual
Meeting of Stockholders of CYPRESS SEMICONDUCTOR CORPORATION to be held on
Tuesday, May 13, 1997, at 10:00 a.m., local time, at its offices located at 
3939 North First Street, San Jose, California 95134 and at any adjournment or
adjournments thereof, and to vote all shares of Common Stock which the
undersigned would be entitled to vote, it then and there personally present, on
the matters set forth below.

     A majority of such attorneys or substitutes as shall be present and shall
act at said meeting or any adjournment or adjournments thereof (or if only one
shall represent and act, then that one) shall have and may exercise all the
powers of said attorneys-in-fact hereunder.



























CONTINUED AND TO BE SIGNED ON REVERSE SIDE











<PAGE>23

(Backside of Proxy Card)


[ X ] Please mark votes as in this example.

THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE RATIFICATION OF THE
APPOINTMENT OF PRICE WATERHOUSE LLP AS INDEPENDENT ACCOUNTANTS OF THE COMPANY,
AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING.

1. ELECTION OF DIRECTORS:

NOMINEES: T.J. Rodgers; Pierre R. Lamond; Fred B. Bialek; Eric A. Benhamou;
          John C. Lewis:

                   FOR                         WITHHELD
                  [   ]                          [   ]


[   ] _______________________________________
      For all nominees except as noted above


2. PROPOSAL TO RATIFY THE APPOINTMENT OF PRICE WATERHOUSE LLP AS THE INDEPENDENT
   ACCOUNTANTS OF THE COMPANY FOR FISCAL 1997.

           FOR                     AGAINST                   ABSTAIN
          [   ]                     [   ]                     [   ]


3. In their discretion, the proxies are authorized to vote upon such other
   matter or matters which may properly come before the meeting or any
   adjournment or adjournments thereof.


     [   ] MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT. 

(This Proxy should be marked, dated, signed by each stockholder(s) exactly as
his or her name appears hereon, and returned promptly in the enclosed envelope. 
Persons signing in a fiduciary capacity should so indicate.  If shares are held
by joint tenants or as community property, both should sign.)



Signature: _______________________________________  Date: _____________________


Signature: _______________________________________  Date: _____________________