Alliance Holds Investor Audio Webcast and Announces Proposed Stock Purchase

On August 18, 2006, Alliance Semiconductor Corporation(Nasdaq:ALSC) (the "Company") held an investor audio webcast todiscuss recent developments including the sale of most of itsoperating assets. Details for accessing the webcast are providedbelow. During the audio webcast, Alliance announced that its board ofdirectors has authorized a modified "Dutch auction" tender offer. TheCompany intends to spend up to $30 million to repurchase up to10,909,090 shares of common stock, or up to 30.7% of the outstandingshares at a price per share not greater than $3.00 and not less than$2.75. The tender offer is expected to commence on August 25, 2006 andto expire at 12:00 midnight, Eastern Daylight Time, on September 25,2006, unless extended.

This modified "Dutch auction" will allow shareholders to indicatehow many of their shares and at what price within the $2.75 to $3.00range the shareholders wish to tender. Based on the number of sharestendered and the prices specified by the tendering shareholders, theCompany will determine the lowest price per share within the rangethat will enable it to purchase up to $30 million worth of shares, ora lower amount depending on the number of shares properly tendered.All shares accepted in the tender offer will be purchased at the sameprice. The Company will not purchase shares below a price stipulatedby a shareholder, and in some cases, may purchase shares at pricesabove a shareholder's stipulated price. Specific instructions and acomplete explanation of the terms and conditions of the tender offerwill be in the offer to purchase and related materials which will bemailed to shareholders of record promptly after commencement of thetender offer.

This press release is for informational purposes only and is notan offer to buy or the solicitation of an offer to sell any shares ofthe Company's common stock. The solicitation of offers to buy theCompany's common stock and specific instructions will only be madepursuant to the offer to purchase and related materials to be sent tostockholders beginning promptly after the commencement of the tenderoffer. Stockholders should read those materials carefully because theywill contain important information, including the various terms andconditions of the tender offer. Once available, stockholders will beable to obtain copies of the offer to purchase and related materialsfiled by the Company as part of the statement on Schedule "TO" andother documents filed with the Securities Exchange Commission throughthe Commission's internet address at http://www.sec.gov without chargewhen these documents become available.

Webcast Details

Alliance's audio webcast began at 8:30 a.m. Eastern Daylight Time(5:30 a.m. Pacific Daylight Time) today, and was led by Bryant Riley,Chairman of Alliance's board of directors. The session may be accessedat http://www.alsc.com. The webcast will be available for replaythrough September 18, 2006.

Forward-Looking Statements

Except for historical information contained in this release,statements in this release may constitute forward-looking statementsregarding our assumptions, projections, expectations, targets,intentions or beliefs about future events. Words or phrases such as"anticipates," "believes," "estimates," "expects," "intends," "plans,""predicts," "projects," "targets," "will likely result," "willcontinue," "may," "could" or similar expressions identifyforward-looking statements. Forward-looking statements involve risksand uncertainties, which could cause actual results or outcomes todiffer materially from those expressed. We caution that while we makesuch statements in good faith and we believe such statements are basedon reasonable assumptions, including without limitation, management'sexamination of historical operating trends, data contained in records,and other data available from third parties, we cannot assure you thatour projections will be achieved. In addition to other factors andmatters discussed from time to time in our filings with the U.S.Securities and Exchange Commission, or the SEC, some important factorsthat could cause actual results or outcomes for the Company or oursubsidiaries to differ materially from those discussed inforward-looking statements include: changes in general economicconditions in the markets in which we may compete and fluctuations indemand in the semiconductor and communications industries; our abilityto sustain historical margins; increased competition; increased costs;increases in our cost of borrowings or unavailability of additionaldebt or equity capital on terms considered reasonable by management;and adverse state, federal or foreign legislation or regulation oradverse determinations by regulators. Any forward-looking statementspeaks only as of the date on which such statement is made, and,except as required by law, we undertake no obligation to update anyforward-looking statement to reflect events or circumstances after thedate on which such statement is made or to reflect the occurrence ofunanticipated events. New factors emerge from time to time, and it isnot possible for management to predict all such factors.