Alliance Semiconductor Announces Commencement of Tender Offer

Alliance Semiconductor Corporation (Nasdaq:ALSC) (the"Company") today announced that it has commenced a tender offer inwhich it will spend up to $30 million to repurchase up to 10,909,090shares of its common stock, or up to 30.6% of its outstanding shares,for cash, at a price per share not greater than $3.00 and not lessthan $2.75. The offer will expire at 12:00 midnight Eastern time onSeptember 22, 2006, unless the offer is extended. On August 24, 2006,the last full trading day before the commencement of the Tender Offer,the reported closing price of the shares on Nasdaq was $3.00 pershare.

The modified "Dutch Auction" tender offer allows stockholders toindicate how many of their shares and at what price within the $2.75to $3.00 range they 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, which may be higher or lower than the market price immediatelyprior to or during the tender offer.

Although the Company's Board of Directors has approved this tenderoffer, neither the Company's Board of Directors nor its management ismaking any recommendation to stockholders as to whether to tender orrefrain from tendering their shares. Stockholders are urged toevaluate carefully all information regarding the tender offer andconsult their own investment and tax advisors before making theirdecision as to whether to tender their shares and, if so, how manyshares to tender and at what price or prices to tender them.

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 mailedto stockholders beginning today. Stockholders should read thosematerials carefully because they will contain important information,including the various terms and conditions of the tender offer. Inaddition, the Company is also filing today with the SEC on Schedule TOthe Offer to Purchase, the related Letter of Transmittal and othermaterials related to the tender offer, which will be available oncefiled through the SEC's internet address at http://www.sec.gov withoutcharge. These documents also may be downloaded without charge from theCompany's website at www.alsc.com.

MacKenzie Partners, Inc. will serve as information agent andMellon Investor Services will serve as the depositary for the tenderoffer. Questions relating to the tender offer should be directed toMacKenzie Partners, Inc. at (212) 929-5500 or toll-free at (800) 322-2885.