Common use of Activity Allocation to Customer Clause in Contracts

Activity Allocation to Customer. (a) The Customer no later than 45 days prior to the start of each Cypress fiscal quarter will notify Cypress in writing if they wish to modify the Activity Allocation, the corresponding Minimum Quarterly Commitment, and the additional Activity charge for Activities in Excess of the Activity Allocation. See Appendix 3 for the 4 Activity Allocation tiers available to the Customer. If no Activity Allocation change is received within the specified time, the Customer will remain at their most recent Activity Allocation. (b) The initial Activity Allocation at the commencement of the contract will be [*****] Activities/Qtr. (c) Cypress will continue to operate the Line in accordance with its then current SOP. Cypress shall allocate Wafer Starts on a weekly basis and review and assign Activities on a daily basis. Regardless of this start allocation procedure; as long as the Customer WIP is not 100% greater than Daily Required Non-Hold WIP defined below, there will be no restriction on wafer starts for the Customer. (d) Subject to the terms and conditions set forth herein, the allocation of Activities to Customer will be made by Cypress in its sole reasonable discretion and in accordance with Cypress’ SOP for the allocation of Activities for Cypress’ own use. Cypress shall ensure that Customer will have no lesser priority in such allocation over the course of each day (for a given lot priority type, ie. standard vs. hot) than the priority of Cypress’ internal operating divisions and other Cypress Line partners for each day during such period. (e) Customer will have a responsibility to maintain their Non-Hold WIP (Work In Progress) at levels defined by both Parties to insure they receive their activity allocation. Cypress will not be held accountable for Activity Allocation missed by Customer if Customer does not maintain the Non-Hold WIP level required by Cypress. The standard procedure for calculating Non-Hold WIP is as follows: Daily Required Non-Hold WIP = Quarterly Activity Allocation (f) The minimum Process Batch size is twelve (12) wafers. Any Process Batch that is smaller than 12 wafers will be charged as if 12 wafers are in the Process Batch, thus the minimum activity charge is 12 for any process step. The Maximum Process Batch size is 25 wafers. (g) Customer will be charged additional Activities for non-standard Activities that may be requested on a process batch. Requests for non-standard Activities and the additional charges for such non-standard Activities shall be as defined in the Cypress specification 001-05660. (h) Any non-standard Activity that is considered and billed as a billable Engineering Service or Engineering Tech Service will be charged as a standard Activity and non-standard Activity charges will not apply unless there is any production impact or effort for this processing.

Activity Allocation to Customer. (a) The Customer no later than 45 days prior to the start of each Cypress fiscal quarter will notify Cypress in writing if they wish to modify the Activity Allocation, the corresponding Minimum Quarterly Commitment, and the additional Activity charge for Activities in Excess of the Activity Allocation. See Appendix 3 for the 4 Activity Allocation tiers available to the Customer. If no Activity Allocation change is received within the specified time, the Customer will remain at their most recent Activity Allocation. (b) The initial Activity Allocation at the commencement of the contract will be [*****] Activities/Qtr. (c) Cypress will continue to operate the Pilot Line in accordance with its then current SOP. Cypress shall allocate Wafer Starts on a weekly basis and review and assign Activities on a daily basis. Regardless , and shall provide the detail of this start such Activity allocation procedure; as long as the Customer WIP is not 100% greater than Daily Required Non-Hold WIP defined below, there will be no restriction on wafer starts for the Customerin Exhibit A attached hereto. (db) Subject to the terms and conditions set forth herein, the allocation of Activities to Customer will be made by Cypress in its sole reasonable discretion and in accordance with Cypress’ SOP for the allocation of Activities for Cypress’ own use. Cypress shall ensure that Customer will have no lesser priority in such allocation over the course of each day (for a given lot priority type, ie. standard vs. hotincluding with respect to use of all equipment on the Line) than the priority of Cypress’ internal operating divisions and other Cypress Pilot Line partners for each day during such period. (ec) Customer will have a the responsibility to maintain their of maintaining Customer’s Non-Hold WIP (Work In Progress) at levels defined by both Parties Cypress to insure ensure they receive their activity allocationActivity Allocation. Cypress will not be held accountable for Activity Allocation missed by Customer if Customer does not maintain the Non-Hold WIP level required by Cypress. The standard procedure for calculating Non-Hold WIP is as follows: Daily Required Non-Hold WIP = Quarterly Activity Allocation (fd) The minimum Process Batch size is twelve (12) waferswafers for wafers in the Pre-Pilot, Pilot Production and Production Phases. Any Process Batch process batch that is smaller than 12 wafers will be charged as if 12 wafers are in the Process Batch, thus the minimum activity charge is 12 for any process step. The Maximum Process Batch size is 25 wafers. (g) Customer will be charged additional Activities for non-standard Activities that may be requested on a process batch. Requests for non-standard Activities and the additional charges for such non-standard Activities shall be as defined in the Cypress specification 001-05660. (h) Any non-standard Activity that is considered and billed as a billable Engineering Service or Engineering Tech Service will be charged as a standard Activity and non-standard Activity charges will not apply unless there is any production impact or effort for this processing.