Quality Semiconductor Completes Acquisition of Wafer Fab in Australia.

Semiconductor Inc. (Nasdaq:QUAL) ("QSI") today announced that it has completed its acquisition of certain assets of AWA Microelectronics Pty Ltd. ("AWAM"), a subsidiary of AWA Limited, based in Sydney, Australia.

The AWAM assets that were acquired by a new subsidiary of QSI, Quality Semiconductor Australia Pty, Ltd., ("QSA"), include a fully operational wafer foundry business and product design center. The company has also signed a strategic alliance agreement with AWA Limited to jointly develop new products and technologies.

The purchase price of the AWAM facility was U.S $5.7 million paid upon closing. In addition AWA Limited subscribed U.S. $1.125 million of preferred shares in the new subsidiary, QSA to provide working capital. Between July 1997 and July 1999, QSI will make the final payment of approximately US $7.5 million.

"This acquisition is an important achievement for Quality Semiconductor," stated Paul Gupta, president and chief operating officer of Quality Semiconductor. "Through this acquisition we will improve our product and proprietary process development, improve our time to market, and through shorter lead times, improve our productivity."

Except for historical information contained herein, the matters discussed in this press release are forward-looking statements that are subject to certain risks and uncertainties that could cause the actual results to differ materially from those projected, including patent litigation, the impact of competitive products and pricing, general economic conditions, and conditions specific to the semiconductor industry, fluctuations in customer demand, the timing and market acceptance of new product introductions, the timely development of new products and other risk factors listed in the company's SEC reports including the Registration Statement filed by QSI in connection with its initial public offering. QSI assumes no obligation to update the information included in this press release.

Quality Semiconductor designs, develops and markets high-performance logic as well as logic-intensive specialty memory semiconductor products. The company targets systems manufacturers principally in the networking, personal computer and workstation markets. The company's logic products include the QSFCT family of high-speed, low noise interface logic devices, the QuickSwitch family of high-speed, low-resistance bus switches, and a family of low-skew clock management products. Quality's specialty memory products include some of the fastest FIFO (First In, First Out) devices currently available.

CONTACT: Quality Semiconductor

Stephen Vonderach, 408/450-8000

or

Morgen-Walke Associates Inc.

Doug Sherk/Suzanne Craig/Lisa Laukkanen, 415/296-7383

Jill Ruja/Elissa Grabowski, 212/850-5600