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Cypress Semi CEO on Consumer Slowdown

If there's a company destined to feel the effects of declining household spending, it's consumer electronics chipmaker Cypress Semiconductor. And with Best Buy cutting its profit forecast, investors have to wonder what's in store for CEO T.J. Rodgers' firm. It was too early to tell when the chief executive appeared on Mad Money in December, so Cramer invited Rodgers back to get a snapshot of where Cypress is right now.

Rodgers pointed out that Cypress’ slide over the past couple months is directly correlated to the performance of its subsidiary SunPower, a solar company that’s seen a precipitous decline in recent weeks along with the rest of the once-hot solar industry.

As a rule of thumb, Rodgers said that Cypress shares tend to move in line with SunPower . For every $4 that SunPower goes up or down, Cypress moves about $1 in the same direction. When Rodgers was last on Mad Money, SunPower was at $128. Now it trades at $79.

With oil still hovering close to $100, solar energy is far from dead. In an economic slowdown, the first thing people delay is that expensive rooftop solar installation, Rodgers said. Until the consumer gets its groove back, SunPower – and Cypress – are likely to feel the pain.

Rodgers said he doesn’t feel optimistic about a quick turnaround in consumer spending. But when it happens, Cypress will be back in play, Cramer said.

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  • Jim Cramer

    Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

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