Alliance Semiconductor Updates Fiscal Second Quarter Revenue Outlook.

Business Editors/High Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--Sept. 12, 2001

Alliance Semiconductor Corporation (Nasdaq:ALSC) today reduced its revenue guidance for the fiscal second quarter ending September 30, 2001 and now expects that the second quarter revenues will be approximately 50% -- 60% below the $12.0 million reported during the fiscal first quarter ended June 30, 2001.

Alliance Chairman, President and CEO, N.D. Reddy said, "Our first two quarters of this fiscal year we have experienced weak demand both DRAM and SRAM products as customers are dipping into existing inventories. While we are hoping to see an upside in orders during the remaining two quarters of this fiscal year, we have not seen significant evidence of an industry upturn."

The second quarter of fiscal year 2002 earnings release is presently scheduled for October 18, 2001 after the market closes.

Company Information

Alliance Semiconductor Corporation is a leading worldwide supplier of high performance memory and memory intensive logic products. Alliance's product lines include Static Random Access Memory (SRAM), Dynamic Random Access Memory (DRAM), Flash memory and embedded memory and logic products. Alliance designs, develops and markets its products to the networking, telecommunication, instrumentation, consumer and computing markets. Alliance manufactures its products through independent manufacturing facilities, using advanced CMOS process technologies with line widths as narrow as 0.18 um.

The Company, through its venture arm Alliance Venture Management, LLC, invests in five venture funds. Alliance Ventures I, LP focuses on investing in networking and communication start-up companies, Alliance Ventures II, LP focuses on investing in internet start-up ventures, Alliance Ventures III, LP, focuses on emerging companies in the networking and communication market areas, Alliance Ventures IV, LP, focuses on semiconductor companies and Alliance Ventures V, LP, focuses on infrastructure companies.

Alliance was founded in 1985. Additional Company information can be found on its home page: http://www.alsc.com.

Forward Looking Statements

Except for historical information, the above statements of this press release (including, without limitation, expressions of expectation, belief, anticipation or estimation of the Company or its management) are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward looking statements. These risks and uncertainties include such factors, among others, as further price erosion of the Company's products; continued cancellation of orders in the Company's backlog; continued decreased demand and increased competitive environment for the Company's products; further diminution in the value of the Company's inventory due to decreased value in the market place, including, without limitation, inability of the Company to obtain necessary capacity, timely delivery or acceptable yields from the entities that provide wafer fabrication, wafer sort, assembly and/or test services to the Company; increases in prices such entities charge the Company for wafer fabrication, wafer sort, assembly and/or test services; obsolescence of the Company's products; further accumulation of excess inventory or price erosion or obsolescence of existing inventory, any of which may result in charges against the Company's earnings; inability to timely ramp up production of and deliver new or enhanced products; inability to successfully recruit and retain qualified technical and other personnel; adverse developments in current or future litigation or administrative proceedings, including; liquidation of antidumping duties imposed on the Company's importation of Taiwan-manufactured SRAM; further diminution of the stock prices of Vitesse Semiconductor Corporation, PMC-Sierra, Inc., Broadcom Corporation, Chartered Semiconductor, United Microelectronics Corporation ("UMC"), and Tower Semiconductor; further adverse changes in value of investments made by Alliance's venture funds managed by Alliance Venture Management, LLC; the Company's potential status as an Investment Act of 1940 reporting company; and the risk factors listed under Item 1: Business and Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Form 10-K for the fiscal year ended April 1, 2000, and subsequent Form 10-Q reports, which have been filed with the Securities and Exchange Commission, which are available through the Company's home page, http://www.alsc.com. These forward-looking statements speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statement is based, in whole or in part.