Cramer's favorite semiconductor stock for 2015

Cramer: Cypress favorite semi of 2015
Cramer: Cypress favorite semi of 2015   

Jim Cramer has declared his favorite semiconductor stock for the year, and no, it is not riding on the coattails of Apple to flourish.

Cypress Semiconductor is a company that makes touchscreen chips for non-Apple smartphones and tablets. The chips that they sell are used in everything from USB devices, industrial applications and as static random access memory chips. It is at the center of any non-Apple snazzy technology.

In Cramer's long tenure of investing, he has seen that semiconductor consolidation deals can yield big results for investors, which is why he has declared it as his favorite. In December, Cypress announced a $4 billion merger with Spansion, another chipmaker.

"I want you to stick with Cypress Semi while we wait for the transaction to close because it sports a terrific 3.1 percent dividend yield, and it's run by the great T.J. Rogers," said the "Mad Money" host.





Founder, President and CEO of Cypress Semiconductor T.J. Rodgers speaks at a press conference in Bengaluru, India, in this March 22, 2004 photo.
Indranil Mukherjee | AFP | Getty Images
Founder, President and CEO of Cypress Semiconductor T.J. Rodgers speaks at a press conference in Bengaluru, India, in this March 22, 2004 photo.

While Cypress did miss Wall Street's earnings estimates slightly, its revenues were higher than expected. Additionally, the company said that the Spansion merger will boost earnings further within the first year.

To hear further about how the merger with Spansion will impact what the company has in store this year, Cramer spoke with the Cypress Semiconductor CEO T.J. Rogers.

The CEO commented on the company's ability to create more cash this year, mainly due to a change in how they use fabrication equipment.

"We are generating more cash than we used to, and the big reason is that we are not taking the cash and plowing it back in to buying fab equipment. We make about 40 percent of our chips in a fab that is highly efficient, and we now buy our chips," said Rogers.

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One example of how Cypress is at the epicenter of technology is through the use of wearable technology. The chip measures your body's heart rate, oxygen in your blood, etc. and talks to the Bluetooth in a cell phone to put the data on the internet for the user. Rogers confirmed that the company is starting to see traction on the wearable market for them as well.

"Emerging tech are startups. Investors should like startups because they bring breakthrough technology to market… But underneath the chip business which is the bulk of who we are now, is very healthy and the startups are going to be a big deal in the future. So we reported good results, with upside for the future," Rogers added.

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