ACL Semiconductors Announces Q1 Results; CFO Comments on 2006 Focus.

HONG KONG -- ACL Semiconductors, Inc. (OTCBB:ACLO), a leading distributor of electronic components such as DRAM, RAM, FLASH, SRAM under the Samsung brand name, today announced its financial results for first quarter ending March 31, 2006.

The company reported that sales decreased by $3,470,601 or 12.1% from $28,646,254 in the three months ended March 31, 2005 to $25,175,653 in the three months ended March 31, 2006. The decrease was mainly due to drop in demand and shortage of supplies of Samsung products while there were no new products being launched by Samsung during the first quarter of 2006. We expect sales to be maintained at the current level for the second quarter of 2006.

Kenneth Chan, ACL's Chief Financial Officer, said, "The increase in gross margin over the same period last year is an important development. Going forward, the Company is seeking ways to diversify its businesses and products for the purposes of increasing sales and increasing gross and operating margins. This will remain our primary focus in 2006."

Gross profit decreased by $11,945 or 1.2%, from $962,882 for the three months ended March 31, 2005 to $950,937 for the three months ended March 31, 2006. The decrease in gross profit resulted primarily from the decrease in sales by the Company for the three months ended March 31, 2006. The Company's gross profit increased slightly to 3.8% of sales in the three months ended March 31, 2006 compared to 3.4% of sales in the three months ended March 31, 2005, as a result of shortage of supplies of Samsung products for the first quarter of 2006. We expect the gross profit to be at this level in the coming months, but will improve if the Company can successfully diversify its business and products.

Sales and marketing expenses increased by $65,544 or 44.1%, from $148,656 for the three months ended March 31, 2005 to $214,200 for the three months ended March 31, 2006. This increase was principally attributable to the sales commission expenses incurred for the first quarter of 2006. As a percentage of sales, sales and marketing expenses increased to 0.85% of sales for the three months ended March 31, 2006 as compared to 0.52% of sales for the three months ended March 31, 2005. ACL intends to continue its efforts to keep its sales and marketing expenses in line with sales.

General and administrative expenses decreased $52,944 or 10.3% from $512,031 in the three months ended March 31, 2005 to $459,087 in the three months ended March 31, 2006. This decrease was principally attributable to professional and legal costs incurred in the first quarter 2005. ACL expects the general and administrative expenses to remain at the current level in 2006.

Income from operations for the Company was $277,650 for the three months ended March 31,2006 (approximately $0.01 per share in net earnings) compared to an income of $302,195 for the three months ended March 31, 2005, a decrease of income by $24,545 or 8.1%. This decrease was the result of decrease in sales for the quarter combined with an increase of selling expenses during the first quarter of 2006. ACL expects the income from operations to remain at the same level during the coming months in 2006.

ABOUT ACL SEMICONDUCTORS, INC:

ACL Semiconductors, Inc.: the Company's principal activities are distribution of electronic components under the "Samsung" brand name, which comprise DRAM and graphic RAM, FLASH, SRAM and MASK ROM for the Hong Kong and Southern China markets. The company has more than 150 customers in Hong Kong and Southern China.

Safe Harbor Act Notice

This information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the"Act"). In particular, when used in the preceding discussion, the words "plan," "confident that," "believe," "scheduled," "expect," or "intend to," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbor created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. Such risks and uncertainties include, but are not limited to, market conditions, the availability of components and successful production of the company's products, general acceptance of the company's products and technologies, competitive factors, timing, and other risks described in the company's SEC reports and filings. Third-party statements contained herein and information contained on any third-party Web site are not endorsed by or adopted by ACL Semiconductors, nor have ACL Semiconductors or its affiliates verified their accuracy.

An online investor kit including press releases, stock charts, current price quotes, and other valuable information may be found at http://www.foothillsgroup.com.