2008-01-10 13:08:59 -

- Alliance Semiconductor Corporation (Pink Sheets:ALSC) announced today that at a hearing before Judge Goeke of the United States Tax Court, counsel for the Internal Revenue Service advised the Court that the Internal Revenue Service will abide by the terms of the Stipulation of Settled Issues previously filed with the Court and described in a Form 8-K filed on July

6, 2007. The Court directed that decision documents be filed with the Court by February 6, 2008. Counsel for the IRS also informed the Court that as a result of the settlement no additional taxes will be owing by Alliance for its taxable years 1999 through 2002. In addition, Alliance expects to receive a tax refund for the 2001 tax year. However, as a result of the settlement, Alliance's net operating losses will be reduced. The Internal Revenue Service's agreement to honor the terms of the stipulated settlement as originally filed with the U.S. Tax Court followed a challenge by the IRS that was previously disclosed. The parties' agreement is not subject to regulatory review.

Forward Looking Statements

Except for historical information contained in this release, statements in this release may constitute forward-looking statements regarding our assumptions, projections, expectations, or beliefs about future events. Words or phrases such as "expects" or similar expressions identify forward-looking statements. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed. We caution that while we make such statements in good faith and we believe such statements are based on reasonable assumptions, we cannot assure you that our projections will be achieved. In addition to other factors and matters discussed from time to time in our filings with the U.S. Securities and Exchange Commission, some important factors that could cause actual results or outcomes for the Company or our subsidiaries to differ materially from those discussed in forward-looking statements include: the possibility of our assumptions underlying our estimated refund for the 2001 tax year not being realized; and adverse state, federal or foreign legislation. Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.

Alliance Semiconductor Corporation
Melvin L. Keating, 415-856-7694
President and Chief Executive Officer