STOCKREPORTS

Alliance Semiconductor Corporation

NASDAQ Symbol ALSC

Recent Price 10.31 52 Wk Range 10.31 - 6.13

Yield Nil 12-Mo. P/E NM

Quantitative Evaluation: Outlook (1 Lowest - 5 Highest) 1- Fair Value 6.87 Risk HIGH Earn/Div Rank NR
Technical Evaluation: BEARISH since 06/97 Rel. Strength Rank (1 Lowest - 99 Highest) 95 Insider Activity NA

Business Profile 31-MAR-97

Since 1991, the company's business strategy has been to be a supplier of high performance memory products and memory intensive logic products, operating on a fabless basis by utilizing independent manufacturing facilities. After a period of rapid growth from September 1992 to September 1995, subsequent results have been unprofitable, reflecting a decline in selling prices, manufacturing problems, and declines in market value for certain of Alliance's products. A number of steps have been taken to address these problems, and the company expects to restore operations to profitability and resume its growth.

Operation Review 31-MAR-97

Net revenues plunged 71% year to year in the first nine months of FY 97 (Mar.), reflecting continued decreases in the average selling prices for the company's SRAM products and a decrease in demand for certain of its SRAM products. Revenues from the sale of DRAM products, which began volume production in June 1996, accounted for 55% of the total in the FY 97 third quarter. After pretax inventory and other charges of $16 million in the first quarter of FY 97 and $10 million in the third quarter of FY 96, a net loss of $13,831,000 ($0.36 a share, on 7.7% fewer shares) contrasted with net income of $37,123,000.

Stock Performance 18-JUL-97n

In the past 30 trading days, ALSC's shares have increased 25%, compared to a 7% rise in the S&P 500. Average trading volume for the past five days was 1,721,320 shares, compared with the 40-day moving average of 532,203 shares.

Key Stock Statistics

Fiscal Year Ending Mar. 31

Dividend Data: No dividends have been paid.

Business Summary 31-MAR-97

After several years marked by brisk sales of static random access memories (SRAMs), the company's principal revenue-generating product line, the SRAM market suddenly collapsed at the end of calendar 1995, primarily reflecting excess buildup of SRAM inventory by PC makers in the face of an impending slowdown in PC sales, and release of additional SRAM inventory by suppliers. To address this problem, Alliance stepped up its expansion into three new areas: dynamic random access memories (DRAMs), Flash memory products, and multimedia user interface (MMUI) accelerators, all of which depend on the same general proprietary design methodologies and simplified process and manufacturing technology and feed into the same markets as the company's traditional products.

In the PC marketplace, the speed at which microprocessors operate continues to increase rapidly, creating a disparity between the performance of the computer's processor and its main memory subsystem. High-performance SRAMs solve this problem by "caching" the most frequently used portions of main memory contents, increasing the speed at which data can be fed to the microprocessor. The emergence of graphical user interface (GUI) and multimedia applications, meanwhile, has placed an additional burden on microprocessors to manipulate windows, icons, video and other complex graphical objects. These needs are met by a combination of fast DRAMs and MMUI accelerators. Similarly, the data communications, networking and telecommunications markets are facing demands for continually higher information throughput. Alliance's products are used to boost overall system performance and keep pace with the ever-increasing speeds provided by today's data communications standards and technology.

From its inception until FY 96, Alliance was notable for its fabless manufacturing strategy of contracting its manufacturing to independent wafer fabrication facilities. Since then, however, the company has adopted an equity investment strategy (partial ownership of three facilities) to ensure capacity during periods of strong demand. Also in FY 96, Alliance successfully made the transition from 6-inch to 8-inch wafers, and it is now achieving the yields and quality levels necessary to meet customer requirements.

Alliance markets its products through a combination of a direct sales force, manufacturers' representatives and a network of third-party distributors.

Capitalization

Long Term Debt: None (12/96).

Curr. Ratio	NA	3.4	5.5	3.4	NA	NA	NA	NA	NA	NA
% LT Debt of Cap.	NA	Nil	Nil	Nil	Nil	NA	NA	NA	NA	NA
% Net Inc.of Revs.	NA	5.3	20.1	15.8	8.9	NA	NA	NA	NA	NA
% Ret. on Assets	NA	5.5	28.4	21.6	NM	NA	NA	NA	NA	NA
% Ret. on Equity	NA	6.6	34.6	30.0	NM	NA	NA	NA	NA	NA

Data as orig. reptd.; bef. results of disc. opers. and/or spec. items. Per share data adj. for stk. divs. as of ex-div. date. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked.

Office--3099 North First St., San Jose, CA 95134. Tel--(408) 383-4900. Website--http://www.alsc.com Pres & CEO--N. D. Reddy. SVP & Secy--C. N. Reddy. VP & CFO--C. Alvarez. Investor Contact--Janine Whittington. Dirs--S. L. Kane, J. Minnis, C. N. Reddy, N. D. Reddy. Transfer Agent & Registrar--ChaseMellon Shareholder Services, SF. Incorporated--in Delaware in 1985. Empl-- 0. S&P Analyst: C.F.B.

This report is for information purposes and should not be considered a solicitation to buy or sell any security. Neither S&P nor any other party guarantee its accuracy or make warranties regarding results from its usage. Redistribution is prohibited without written permission. Copyright © 1997