ALLIANCE SEMICONDUCTOR CORP /DE/, DEF 14A, 2000-07-28

ALLIANCE SEMICONDUCTOR CORP /DE/
DEF 14A, 2000-07-28
SEMICONDUCTORS & RELATED DEVICES

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SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
[X] Definitive Proxy Statement Commission Only (as permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12

ALLIANCE SEMICONDUCTOR CORPORATION
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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transactions applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials:

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[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.

(1) Amount previously paid:

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(2) Form, Schedule or Registration Statement no.:

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(3) Filing Party:

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(4) Date Filed:

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<PAGE>

[ALLIANCE SEMICONDUCTOR CORPORATION LOGO]
ALLIANCE SEMICONDUCTOR CORPORATION

2575 Augustine Drive, Santa Clara, California 95054

July 28, 2000

Dear Stockholder:

You are cordially invited to attend the Alliance Semiconductor Corporation 2000
Annual Meeting of Stockholders, which will be held at the Company's headquarters
at 2575 Augustine Drive, Santa Clara, California 95054 on Friday, September 8,
2000 at 10:00 a.m., local time.

At the Annual Meeting, you will be asked to elect four directors, approve an
amendment to the Company's 1992 Stock Plan to increase the number of shares of
common stock reserved for issuance by 2,000,000 shares, approve the appointment
of PricewaterhouseCoopers LLP as the Company's independent accountants for the
current fiscal year, and to transact any other business that may properly come
before the meeting.

We hope you will be able to attend the Annual Meeting on September 8th for a
report on the status of the Company's business and performance during the fiscal
year ended April 1, 2000. There will be an opportunity for stockholders to ask
questions. Whether or not you plan to attend the meeting, please sign and return
the enclosed proxy card to ensure your representation at the meeting.

Very truly yours,

/s/ N. Damodar Reddy

N. Damodar Reddy
President and Chief Executive Officer

<PAGE>

[ALLIANCE SEMICONDUCTOR CORPORATION LOGO]
ALLIANCE SEMICONDUCTOR CORPORATION

2575 Augustine Drive, Santa Clara, California 95054

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NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
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To Our Stockholders:

Notice is hereby given that the 2000 Annual Meeting of Stockholders of Alliance
Semiconductor Corporation (the "Company") will be held at the Company's
headquarters at 2575 Augustine Drive, Santa Clara, California 95054 on Friday,
September 8, 2000 at 10:00 a.m., local time for the following purposes:

1. To elect four (4) directors of the Company to serve until the next
Annual Meeting of Stockholders or until their respective successors are
elected and qualified or until their earlier resignation, death or
removal. The Company's Board of Directors has nominated the following
individuals to serve: Sanford L. Kane, Jon B. Minnis, C.N. Reddy and N.
Damodar Reddy.

2. To approve an amendment to the Company's 1992 Stock Plan to increase the
number of shares of common stock reserved for issuance by 2,000,000
shares, from 11,000,000 to 13,000,000 shares.

3. To ratify the appointment of PricewaterhouseCoopers LLP as independent
accountants for the Company for the current fiscal year.

4. To transact any other business as may properly come before the meeting
or any adjournment thereof.

The foregoing items of business are more fully described in the Proxy Statement
accompanying this Notice.

Only stockholders of record at the close of business on July 21, 2000 are
entitled to notice of and to vote at the meeting and any adjournment or
postponement thereof.

By Order of the Board of Directors,

/s/ C.N. Reddy

C. N. Reddy
EXECUTIVE VICE PRESIDENT, CHIEF OPERATING
OFFICER AND SECRETARY

San Jose, California
July 28, 2000

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ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN
THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
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<PAGE>

[ALLIANCE SEMICONDUCTOR CORPORATION LOGO]
ALLIANCE SEMICONDUCTOR CORPORATION

2575 Augustine Drive, Santa Clara, California 95054

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PROXY STATEMENT
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INFORMATION CONCERNING SOLICITATION AND VOTING

GENERAL

The accompanying proxy (the "Proxy") is solicited on behalf of the Board of
Directors of Alliance Semiconductor Corporation, a Delaware corporation
("Alliance" or the "Company"), for use at the 2000 Annual Meeting of
Stockholders of the Company to be held at the Company's headquarters at 2575
Augustine Drive, Santa Clara, California 95054 on Friday, September 8, 2000 at
10:00 a.m., local time (the "Annual Meeting"). Only holders of record of the
Company's Common Stock at the close of business on July 21, 2000 (the "Record
Date") will be entitled to vote. At the close of business on that date, the
Company had 42,510,180 shares of Common Stock outstanding and entitled to vote
at the Annual Meeting. A majority of these shares, will constitute a quorum for
the transaction of business at the Annual Meeting. This Proxy Statement will be
first mailed to stockholders on or about July 28, 2000.

REVOCABILITY OF PROXIES

Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use either by delivering to the Company
(Attention: General Counsel) a written notice of revocation or a duly executed
proxy bearing a later date, or by attending the Annual Meeting and voting in
person. If a proxy is properly signed and not revoked, the shares it represents
will be voted in accordance with the instructions of the stockholder. If no
specific instructions are given, the shares will be voted FOR the election as
directors of all of the nominees described below ("Proposal No. 1"); FOR
approval of an amendment to the Company's 1992 Stock Plan to increase the number
of shares of common stock reserved for issuance by 2,000,000 shares (Proposal
No. 2); FOR ratification of the appointment of PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year ending March 31, 2001
("Proposal No. 3"); and as voted by the Proxy holders in connection with any
other business as may properly come before the meeting or any adjournment
thereof.

VOTING AND SOLICITATION

Holders of shares of Common Stock are entitled to one vote for each share held
as of the Record Date. Shares of Common Stock may not be voted cumulatively.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by the
Inspector of Elections (the "Inspector") with the assistance of the Company's
transfer agent. The Inspector also will determine whether or not a quorum is
present. With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect. Abstentions may be specified on all proposals (other than
the election of directors) and will be counted as present for purposes of the
item on which the abstention is noted. An abstention has the same effect as a
vote "Against" the matter. In the event that a broker indicates on a Proxy that
it does not have discretionary authority to vote certain shares on a particular
matter ("broker non-vote"), those shares will not be considered present and
entitled to vote with respect to that matter.

Each nominee to serve on the Company's Board of Directors to be elected must
receive a plurality of the votes of the shares present in person or represented
by proxy at the Annual Meeting and entitled to vote on the election of directors
(provided a quorum is present). Votes "Withheld," as well as broker non-votes,
will not contribute to the number of votes required to elect a director.

Proposal No. 2 and Proposal No. 3 each require for approval the affirmative
vote of a majority of the shares of Common Stock of the Company present in
person or by proxy at the Annual Meeting and entitled to vote

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<PAGE>

(provided a quorum is present). Votes "Against" and "Abstain" will count toward
the number of shares voted at the Annual Meeting, but will not contribute toward
the required number of votes necessary to approve Proposal No. 2 and Proposal
No. 3. Broker non-votes will not be counted toward the number of shares voted at
the Annual Meeting in determining the number of affirmative votes necessary to
approve Proposal No. 2 and Proposal No. 3.

Unless otherwise instructed by the stockholder or described herein, each Proxy
validly returned in the form accompanying this Proxy Statement that is not
revoked will be voted in the election of directors "For" each of the nominees of
the Board of Directors, and "For" Proposal No. 2 and Proposal No. 3 described in
this Proxy Statement, and at the Proxy holders' discretion, on such other
matters, if any, that may come before the Annual Meeting (including any proposal
to adjourn the Annual Meeting).

The expenses of soliciting Proxies in the enclosed form will be paid by the
Company. Following the original mailing of the Proxy and other soliciting
materials, the Company will request brokers, custodians, nominees and other
record holders to forward copies of the Proxy and other soliciting materials to
persons for whom they hold shares of Common Stock and to request authority for
the exercise of Proxies. In such cases, the Company, upon the request of the
record holders, will reimburse such holders for their reasonable expenses.
Proxies may also be solicited by certain of the Company's directors, officers or
regular employees, without additional compensation, in person or by telephone or
telecopy.

PROPOSAL NO. 1
ELECTION OF DIRECTORS

At the Annual Meeting, the stockholders shall elect four directors of the
Company to serve until the next annual meeting of stockholders and until their
successors have been elected or until their earlier resignation, death or
removal. The Board of Directors of the Company (the "Board" or "Board of
Directors") has nominated for election as directors each of the following
persons: Sanford L. Kane, Jon B. Minnis, C.N. Reddy and N. Damodar Reddy. Unless
otherwise instructed, the Proxy holders will vote the Proxies received by them
for the Company's nominees named below. Each of the nominees is currently a
director of the Company. Assuming a quorum is present, the four nominees for
election as directors who receive the greatest number of votes cast for the
election of directors at the Annual Meeting will become directors at the
conclusion of the tabulation of votes. In the event that any nominee is unable
or declines to serve as a director at the time of the Annual Meeting, the
Proxies will be voted for any nominee who shall be designated by the present
Board of Directors to fill the vacancy or the Board will be reduced in
accordance with the Bylaws of the Company. It is not expected that any nominee
will be unable, or will decline, to serve as a director.

DIRECTORS/NOMINEES

The names of the current members of the Board, who are also the Company's
nominees for the Board, their ages as of July 28, 2000, and certain other
information about them, are set forth below:
<TABLE>
<CAPTION>

Name of Nominee and Age Principle Occupation Director
Director Since
--------------------- ---- ----------------------- ---------
<S> <C> <C> <C>
N. Damodar Reddy (1) 61 Chairman of the 1985
Board, Chief
Executive Officer and
President of the
Company
C. N. Reddy 44 Executive Vice 1985
President, Chief
Operating Officer and
Secretary of the
Company
Jon B. Minnis 64 President of Milpitas 1992
(1)(2)(3)
Stanford L. Kane 58 President of Kane 1993
(1)(2)(3) Concepts Incorporated
</TABLE>

(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Member of the Stock Benefit Committee.

N. Damodar Reddy and C.N. Reddy are brothers. There are no other family
relationships among any of the directors or executive officers of the Company.

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<PAGE>

Honeywell, Inc. Prior to that time, Mr. Reddy held various research and
development and management positions at Four Phase Systems, a subsidiary of
Motorola, Inc., Fairchild Semiconductor and RCA Technology Center. Mr. Reddy is
a member of the board of directors of two publicly traded companies, Sage, Inc.
and eMagin Corporation. He holds an M.S. degree in Electrical Engineering from
North Dakota State University and an M.B.A. from Santa Clara University. N.
Damodar Reddy is the brother of C.N. Reddy.

C.N. Reddy is the co-founder of the Company and has served as the Company's
Secretary and director since its inception in February 1985. Beginning in
February 1985, Mr. Reddy served as the Company's Vice President - Engineering.
In May 1993, he was appointed Senior Vice-President - Engineering and Operations
of the Company. In December 1997, he was appointed Executive Vice President and
Chief Operating Officer. From 1984 to 1985, he served as Director of Memory
Products of Modular Semiconductor, Inc., and from 1983 to 1984, Mr. Reddy served
as a SRAM product line manager for Cypress Semiconductor Corporation. From 1980
to 1983, Mr. Reddy served as a DRAM development manager for Texas Instruments,
Inc. and, before that, he was a design engineer with National Semiconductor
Corporation for two years. Mr. Reddy holds an M.S. degree in Electrical
Engineering from Utah State University. C.N. Reddy is named inventor of over 15
patents related to SRAM and DRAM designs. C.N. Reddy is the brother of N.
Damodar Reddy.

Jon B. Minnis has served as a director of the Company since April 1992. For more
than the past 29 years, he has been President of Milpitas Materials Company, a
construction materials company. Mr. Minnis has also been involved in venture
capital investment activities for high technology companies.

Sanford L. Kane has served as a director of the Company's Board of Directors
since June 1993. He currently serves as President of Kane Concepts Incorporated,
a consulting company, and President of Legacy Systems, Inc. a startup company in
which Alliance is the largest shareholder. From January 1993 to April 1995, he
served as Chairman and Chief Executive Officer of Tower Semiconductor Ltd., a
publicly held wafer fabrication company. From October 1990 to January 1992, he
was President and Chief Executive Officer of PCO, Inc., a manufacturer of fiber
optic electronic products. From July 1989 to June 1990, he was President and
Chief Executive Officer of U.S. Memories, Inc., a joint venture that was
intended to be a United States manufacturer of semiconductor memory devices.
Prior to July 1989, Mr. Kane spent 27 years with IBM in various managerial and
technical positions, most recently as Vice President of Industry Operations -
General Technology Division. While at IBM, Mr. Kane served as a director of
SEMATECH and the Semiconductor Industry Association.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

BOARD OF DIRECTORS
During the fiscal year ended April 1, 2000 ("fiscal 2000"), the Board of
Directors met four times and acted by unanimous written consent one time. Each
incumbent director attended all of the meetings of the Board of Directors and of
the committees of the Board on which he served.

The Board of Directors has delegated certain authority to designated committees.
Standing committees of the Board currently include an Audit Committee, a
Compensation Committee and a Stock Benefit Committee, the current membership and
duties of which are set forth below. The Board does not have a nominating
committee or a committee performing the functions of a nominating committee.
Although there are no formal procedures for stockholders to nominate persons to
serve as directors, the Board will consider nominations from stockholders, which
should be addressed to the Company's Secretary at the Company's address set
forth above.

<TABLE>
<CAPTION>
Audit Compensation Stock Benefit
Committee Committee Committee
----------------- ---------------- ---------------
<S> <C> <C> <C>
Sanford L. Kane Sanford L. Kane Sanford L. Kane
Jon B. Minnis Jon B. Minnis Jon B. Minnis
N. Damodar Reddy
</TABLE>

AUDIT COMMITTEE
The Audit Committee consists of two directors and exercises the following
powers: (1) meets with the Company's independent accountants to review the
adequacy of the Company's internal control systems and financial reporting
procedures; (2) reviews the general scope of the Company's annual audit and fees
charged by the independent accountants; (3) reviews and monitors the performance
of non-audit services provided by the independent accountants; and (4) reviews
interested transactions between the Company and any of its affiliates and any
other matter to be passed upon by an audit committee as a matter of law or
pursuant to the rules and regulations of any stock exchange or other securities
market upon which the Company's securities may be listed. The Audit Committee
held two meetings in fiscal 2000.

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<PAGE>

COMPENSATION COMMITTEE
The Compensation Committee consists of three directors and sets all non-stock
compensation for the Company's officers, employees and service providers, other
than directors. The Compensation Committee did not meet in fiscal 2000.

STOCK BENEFIT COMMITTEE
The Stock Benefit Committee consists of two directors and administers the
Company's 1992 Stock Option Plan, 1993 Directors Stock Option Plan, 1996
Employee Stock Purchase Plan and other stock benefit plans for officers,
employees and other service providers; however, the Stock Benefit Committee does
not administer discretionary stock benefit plans for directors. The Stock
Benefit Committee acted by unanimous written consent 77 times in fiscal 2000.

DIRECTORS' COMPENSATION

Directors resident in California do not receive compensation for serving as
members of the Company's Board of Directors. Directors resident outside
California receive a $5,000 fee for each meeting of the Company's Board of
Directors physically attended by such director (provided, however, that no such
director shall be paid more than $20,000 during any fiscal year). All directors
are reimbursed for expenses incurred attending meetings of the Board. In fiscal
1994, Directors Messrs. Minnis and Kane, the Company's two non-employee members
of the Board of Directors, were each granted options to purchase 90,000 shares
of Common Stock, at an exercise price per share of $1.33 which have been
exercised. In fiscal 1998, Directors Messrs. Minnis and Kane were granted
options to purchase 50,000 shares of Common Stock, at an exercise price per
share of $5.50. Each of these options vest in increments of 20% per year on each
of the first five anniversaries subsequent to June 9, 1997, in the case of Mr.
Kane, and May 10, 1997, in the case of Mr. Minnis.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ELECTION OF EACH OF THE NOMINATED DIRECTORS.

Proposal No. 2
Approval of an Amendment to the 1992 Stock Plan

In 1992, the Board of Directors adopted, and the stockholders subsequently
approved, the Company's 1992 Stock Plan (the "1992 Plan"). As a result of a
series of amendments, at July 28, 2000 there were 11,000,000 shares of the
Company's Common Stock authorized for issuance under the 1992 Plan, including
all options which have been granted under the 1992 Plan prior to such date.

At July 10, 2000, options (net of canceled or expired options) covering an
aggregate of 7,965,913 shares of the Company's Common Stock had been granted
under the 1992 Plan, and 3,034,087 shares (other than any shares that might in
the future be returned to the 1992 Plan as a result of cancellation or
expiration of options) remained available for future grant under the 1992 Plan.
The amendment to the 1992 Plan would increase the number of shares of common
stock reserved for issuance by 2,000,000 shares, from 11,000,000 to 13,000,000
shares.

Stockholders are requested in this Proposal 2 to approve the amendment to the
1992 Plan. If the stockholders fail to approve this Proposal 2, the number of
shares authorized for issuance under the 1992 Plan will remain at 11,000,000
shares. The affirmative vote of the holders of a majority of the shares present
in person or represented by proxy and entitled to vote at the meeting, at which
a quorum is present, will be required to approve the amendment to the 1992 Plan.
Abstentions will be counted toward the tabulation of votes cast on this proposal
and will have the same effect as negative votes. Broker non-votes are not
counted in determining whether this proposal has been approved.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL
OF THE AMENDMENT OF THE 1992 STOCK PLAN.

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<PAGE>

The essential features of the 1992 Plan are outlined below:

GENERAL

The 1992 Plan provides for the grant of both incentive and nonstatutory (or
supplemental) stock options. Incentive stock options granted under the 1992 Plan
are intended to qualify as "incentive stock options" within the meaning of
Section 422 of the Code. Nonstatutory stock options granted under the 1992 Plan
are intended not to qualify as incentive stock options under the Code. See
"Federal Income Tax Information" for a discussion of the tax treatment of
incentive and nonstatutory stock options.

PURPOSE

The 1992 Plan was adopted to provide a means by which selected officers and
employees of and consultants to the Company and its affiliates could be given an
opportunity to purchase stock in the Company, to assist in retaining the
services of employees holding key positions, to secure and retain the services
of persons capable of filling such positions and to provide incentives for such
persons to exert maximum efforts for the success of the Company. All of the
Company's approximately 180 regular, full-time employees and consultants are
eligible to participate in the 1992 Plan.

ADMINISTRATION

The 1992 Plan is administered by the Board of Directors of the Company. The
Board has the power to construe and interpret the 1992 Plan and, subject to the
provisions of the 1992 Plan, to determine the persons to whom and the dates on
which options will be granted, the number of shares to be subject to each
option, the time or times during the term of each option within which all or a
portion of such option may be exercised, the exercise price, the type of
consideration and other terms of the option. The Board of Directors is
authorized to delegate administration of the 1992 Plan to a committee composed
of not fewer than two (2) members of the Board. The Board has delegated
administration of the 1992 Plan to the Stock Benefits Committee of the Board. As
used herein with respect to the 1992 Plan, the "Board" refers to the Stock
Benefits Committee, as well as to the Board of Directors itself.

ELIGIBILITY

Incentive stock options may be granted under the 1992 Plan only to employees
(including officers) of the Company and its affiliates. Selected employees
(including officers) and consultants are eligible to receive nonstatutory stock
options under the 1992 Plan.

No incentive stock option may be granted under the 1992 Plan to any person who,
at the time of the grant, owns (or is deemed to own) stock possessing more than
10% of the total combined voting power of the Company or any affiliate of the
Company, unless the option exercise price is at least 110% of the fair market
value of the stock subject to the option on the date of grant, and the term of
the option does not exceed six (6) years from the date of grant. With respect to
incentive stock options granted under the 1992 Plan, the aggregate fair market
value, determined at the time of grant, of the shares of Common Stock with
respect to which such options are exercisable for the first time by an optionee
during any calendar year (under all such plans of the Company and its
affiliates) may not exceed $100,000. 1992 Plan includes a per-employee,
per-fiscal year limitation equal to 700,000 shares of Common Stock.

STOCK SUBJECT TO THE 1992 PLAN

If options granted under the 1992 Plan expire or otherwise terminate without
being exercised, the Common Stock not purchased pursuant to such options again
becomes available for issuance under the 1992 Plan.

TERMS OF OPTIONS

The following is a description of the permissible terms of options under the
1992 Plan. Individual option grants may be more restrictive as to any or all of
the permissible terms described below.

EXERCISE PRICE; PAYMENT. The exercise price of incentive stock options under the
1992 Plan may not be less than the fair market value of the Common Stock subject
to the option on the date of the option grant, and in some cases (see
"Eligibility" above), may not be less than 110% of such fair market value. The
exercise price of nonstatutory

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<PAGE>

options under the 1992 Plan may not be less than 85% of the fair market value of
the Common Stock subject to the option on the date of the option grant. However,
if options were granted with exercise prices below market value, deductions for
compensation attributable to the exercise of such options could be limited by
Section 162(m). See "Federal Income Tax Information."

The exercise price of options granted under the 1992 Plan must be paid either:
(a) in cash at the time the option is exercised; or (b) at the discretion of the
Board, (i) by delivery of other Common Stock of the Company, or (ii) pursuant to
a deferred payment arrangement or in any other form of legal consideration
acceptable to the Board.

OPTION EXERCISE. Options granted under the 1992 Plan may become exercisable in
cumulative installments ("vest") as determined by the Board. Shares covered by
currently outstanding options under the 1992 Plan typically vest at the rate of
20% on each anniversary of the grant date during the optionee's employment or
service as a consultant. Shares covered by options granted in the future under
the 1992 Plan may be subject to different vesting terms. The Board has the power
to accelerate the time during which an option may be exercised. In addition,
options granted under the 1992 Plan may permit exercise prior to vesting, but in
such event the optionee may be required to enter into an early exercise stock
purchase agreement that allows the Company to repurchase shares not yet vested
should the optionee leave the employ of the Company prior to vesting. To the
extent provided by the terms of an option, an optionee may satisfy any federal,
state or local tax withholding obligation relating to the exercise of such
option by a cash payment upon exercise, by authorizing the Company to withhold a
portion of the stock otherwise issuable to the optionee, by delivering
already-owned stock of the Company or by a combination of these means.

TERM. The maximum term of options under the 1992 Plan is ten (10) years, except
that in certain cases (see "Eligibility") the maximum term is six (6) years.
Options under the 1992 Plan terminate three (3) months after termination of the
optionee's employment or relationship as a consultant or director of the Company
or any affiliate of the Company, unless (a) such termination is due to such
person's permanent and total disability (as defined in the Code), in which case
the option may, but need not, provide that it may be exercised at any time
within one year of such termination; (b) the optionee dies while employed by or
serving as a consultant or director of the Company or any affiliate of the
Company, or within three (3) months after termination of such employment or
relationship, in which case the option may, but need not, provide that it may be
exercised (to the extent the option was exercisable at the time of the
optionee's death) within eighteen (18) months of the optionee's death by the
person or persons to whom the rights to such option pass by will or by the laws
of descent and distribution; (c) or the option by its terms specifically
provides otherwise. Individual options by their terms may provide for exercise
within a longer or shorter period of time following termination of employment or
the consulting relationship. The option term may also be extended in the event
that exercise of the option within these periods is prohibited under then
current securities laws.

ADJUSTMENT PROVISIONS

If there is any change in the stock subject to the 1992 Plan or subject to any
option granted under the 1992 Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the 1992 Plan and options
outstanding thereunder will be appropriately adjusted as to the class and the
maximum number of shares subject to such plan, the maximum number of shares
which may be granted to an employee during a fiscal year, and the class, number
of shares and price per share of stock subject to such outstanding options.

EFFECT OF CERTAIN CORPORATE EVENTS

The 1992 Plan provides that, in the event of a dissolution or liquidation of the
Company, specified type of merger or other corporate reorganization, to the
extent permitted by law, any surviving corporation will be required to either
assume options outstanding under the 1992 Plan or substitute similar options for
those outstanding under such plan, or such outstanding options will continue in
full force and effect. In the event that any surviving corporation declines to
assume or continue options outstanding under the 1992 Plan, or to substitute
similar options, then the options will terminate if not exercised prior to such
time.

DURATION, AMENDMENT AND TERMINATION

The Board may suspend or terminate the 1992 Plan without stockholder approval or
ratification at any time or from time to time. Unless sooner terminated, the
1992 Plan will terminate on April 7, 2002.

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<PAGE>

The Board may also amend the 1992 Plan at any time or from time to time.
However, no amendment will be effective unless approved by the stockholders of
the Company within twelve (12) months before or after its adoption by the Board
if stockholder approval is required in order for the Plan to satisfy Section 422
of the Code, Rule 16b-3 ("Rule 16b-3") of the Exchange Act, or the Nasdaq or
securities exchange rules, as applicable. The Board may submit any other
amendment to the 1992 Plan for stockholder approval, including, but not limited
to, amendments intended to satisfy the requirements of Section 162(m) of the
Code regarding the exclusion of performance-based compensation from the
limitation on the deductibility of compensation paid to certain employees.

RESTRICTIONS ON TRANSFER

Under the 1992 Plan, an option may be transferred by the optionee in limited
circumstances only as provided in the optionee's option agreement or pursuant to
a will or by the laws of descent and distribution and, during the lifetime of
the optionee, may be exercised only by the optionee. In addition, shares subject
to repurchase by the Company under an early exercise stock purchase agreement
may be subject to restrictions on transfer which the Board deems appropriate.

FEDERAL INCOME TAX INFORMATION

INCENTIVE STOCK OPTIONS. Incentive stock options under the 1992 Plan are
intended to be eligible for the favorable federal income tax treatment accorded
"incentive stock options" under the Code.

There generally are no federal income tax consequences to the optionee or the
Company by reason of the grant or exercise of an incentive stock option.
However, the exercise of an incentive stock option may increase the optionee's
alternative minimum tax liability, if any.

If an optionee holds stock acquired through exercise of an incentive stock
option for at least two (2) years from the date on which the option is granted
and at least one year from the date on which the shares are transferred to the
optionee upon exercise of the option, any gain or loss on a disposition of such
stock will be long-term capital gain or loss. Generally, if the optionee
disposes of the stock before the expiration of either of these holding periods
(a "disqualifying disposition"), at the time of disposition, the optionee will
realize taxable ordinary income equal to the lesser of (a) the excess of the
stock's fair market value on the date of exercise over the exercise price, or
(b) the optionee's actual gain, if any, on the purchase and sale. Any additional
gain, or any loss, upon the disqualifying disposition will be a capital gain or
loss, which will be long-term or short-term depending on whether the stock was
held for more than one year. Long-term capital gains currently are generally
subject to lower tax rates than ordinary income. The maximum capital gains rate
for federal income tax purposes is currently 20% while the maximum ordinary
income rate is effectively 39.6% at the present time. Slightly different rules
may apply to optionees who acquire stock subject to certain repurchase options
or who are subject to Section 16(b) of the Exchange Act.

To the extent the optionee recognizes ordinary income by reason of a
disqualifying disposition, the Company will generally be entitled (subject to
the requirement of reasonableness, the provisions of Section 162(m) of the Code
and the satisfaction of a tax reporting obligation) to a corresponding business
expense deduction in the tax year in which the disqualifying disposition occurs.

NONSTATUTORY STOCK OPTIONS. Nonstatutory stock options granted under the
1992 Plan generally have the following federal income tax consequences:

There are no tax consequences to the optionee or the Company by reason of the
grant of a nonstatutory stock option. Upon exercise of a nonstatutory stock
option, the optionee normally will recognize taxable ordinary income equal to
the excess of the stock's fair market value on the date of exercise over the
option exercise price. Generally, with respect to employees, the Company is
required to withhold from regular wages or supplemental wage payments an amount
based on the ordinary income recognized. Subject to the requirement of
reasonableness, the provisions of Section 162(m) of the Code and the
satisfaction of a tax reporting obligation, the Company will generally be
entitled to a business expense deduction equal to the taxable ordinary income
realized by the optionee. Upon disposition of the stock, the optionee will
recognize a capital gain or loss equal to the difference between the selling
price and the sum of the amount paid for such stock plus any amount recognized
as ordinary income upon exercise of the option. Such gain or loss will be long
or short-term depending on whether the stock was held for more than one year.
Slightly different rules may apply to optionees who acquire stock subject to
certain repurchase options or who are subject to Section 16(b) of the Exchange
Act.

-7-
<PAGE>

POTENTIAL LIMITATION ON COMPANY DEDUCTIONS. In 1993, the Code was amended to add
Section 162(m), which denies a deduction to any publicly-held corporation for
compensation paid to certain employees in a taxable year to the extent that
compensation exceeds $1,000,000 for a covered employee, as such term is defined
in Section 162(m) and the regulations thereunder. It is possible that
compensation attributable to stock options, when combined with all other types
of compensation received by a covered employee from the Company, may cause this
limitation to be exceeded in any particular year, as happened in fiscal 2000.

Certain kinds of compensation, including qualified "performance-based
compensation," are disregarded for purposes of the deduction limitation. In
accordance with proposed Treasury regulations issued under Section 162(m),
compensation attributable to stock options will qualify as performance-based
compensation, provided that the option is granted by a compensation committee
comprised solely of "outside directors" and either: (I) the option plan contains
a per-employee limitation on the number of shares for which options may be
granted during a specified period, the per-employee limitation is approved by
the stockholders, and the exercise price of the option is no less than the fair
market value of the stock on the date of grant; or (ii) the option is granted
(or exercisable) only upon the achievement (as certified in writing by the
compensation committee) of an objective performance goal established in writing
by the compensation committee while the outcome is substantially uncertain, and
the option is approved by stockholders.

The following table shows the number of shares of Common Stock currently
issuable upon exercise of options granted to the named individuals and groups
under the 1992 Stock Plan during the fiscal year ended April 1, 2000.

<TABLE>
<CAPTION>
Plan Benefits - 1992 Stock Plan

Name and Principal Position Number of Average
Options (1) Exercise Price
--------------------------------------- ------------- --------------
<S> <C> <C>
N. Damodar Reddy 200,000 $11.4161
President and Chief Executive Officer
C. N. Reddy 150,000 $11.4918
Executive Vice President and Chief
Operating Officer
David Eichler 100,000 $4.0625
Bradley Perkins 80,000 $4.5000
Ritu Shrivastava 173,082 $5.7534
Executive officers as a group 703,082 $8.2054
Non-executive officer employee group 1,586,075 $8.2971
</TABLE>

(1) All options granted at fair market value as of date of grant, except to Mr.
Damodar Reddy and Mr. C.N. Reddy who's incentive stock options were granted
at 110% of the fair market as required by the 1992 Stock Plan for
individuals who hold more than 10% of the outstanding shares.

Proposal No. 3
Ratification of Appointment of Independent Accountants

The Board of Directors has appointed PricewaterhouseCoopers LLP as the Company's
independent accountants for the fiscal year ending March 31, 2001, and the
stockholders are being asked to ratify such appointment. PricewaterhouseCoopers
LLP (or its predecessor) has been engaged as the Company's independent
accountants since the Company's inception in 1985. Representatives of
PricewaterhouseCoopers LLP are expected to be present at the Annual Meeting,
will be given an opportunity to make a statement if they desire to do so, and
are expected to be available to respond to appropriate questions.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS.

-8-
<PAGE>

Executive Officers of the Company

Certain information concerning executive officers of the Company, including
their ages of July 28, 2000, is set forth below:

<TABLE>
<CAPTION>
Name Age Position
-------------------- ---- ----------------------------------------------------
<S> <C> <C>
N. Damodar Reddy 61 Chairman, President and Chief Executive Officer
C.N. Reddy 43 Executive Vice President, Chief Operating Officer,
Director and Secretary
David Eichler 51 Vice President, Finance and Administration, and CFO
Bradley Perkins 43 Vice President and General Counsel
Ritu Shrivastava 49 Vice President, Technology Development
</TABLE>

N. Damodar Reddy is the co-founder of the Company and has served as the
Company's Chairman of the Board, Chief Executive Officer and President from its
inception in February 1985. Mr. Reddy also served as the Company's Chief
Financial Officer from June 1998 until January 1999 . From September 1983 to
February 1985, Mr. Reddy served as President and Chief Executive Officer of
Modular Semiconductor, Inc., and from 1980 to 1983, he served as manager of
Advanced CMOS Technology Development at Synertek, Inc., a subsidiary of
Honeywell, Inc. Prior to that time, Mr. Reddy held various research and
development and management positions at Four Phase Systems, a subsidiary of
Motorola, Inc., Fairchild Semiconductor and RCA Technology Center. Mr. Reddy is
a member of the board of directors of two publicly traded companies, Sage, Inc.
and eMagin Corporation. He holds an M.S. degree in Electrical Engineering from
North Dakota State University and an M.B.A. from Santa Clara University. N.
Damodar Reddy is the brother of C.N. Reddy.

David Eichler joined the Company in January 1999, and was appointed Vice
President Finance and Administration and Chief Financial Officer. Prior to
joining the Company, Mr. Eichler was Vice President Finance and Chief Accounting
Officer for Adobe Systems Incorporated in 1998. From 1994 to 1998, he was Senior
Vice President Finance & Administration and Chief Financial Officer for Hyundai
Electronics America. He has also held senior financial management positions at
Syntex Corporation, Oki Semiconductor and Tandem Computers Incorporated.

Bradley A. Perkins joined the Company in January 1999, and was appointed Vice
President and General Counsel. Prior to joining the Company, Mr. Perkins was
Vice President, General Counsel and Secretary at Mission West Properties
(formerly Berg & Berg Developers), from January 1998 to January 1999. From
November 1991 to January 1998, Mr. Perkins was with Valence Technology, Inc.,
where he was Vice President, General Counsel and Secretary. From August 1988 to
November 1991, Mr. Perkins was Assistant General Counsel and Intellectual
Property Counsel with VLSI Technology, Inc.

Ritu Shrivastava joined the Company in November 1993, and was appointed Vice
President - Technology Development in August 1995. Dr. Shrivastava was
designated as an executive officer of the Company in July 1997. Prior to joining
the Company, Dr. Shrivastava worked at Cypress Semiconductor Corporation for
more than 10 years in various technology management positions, the last one
being Director of Technology Development. Prior to that time, Dr. Shrivastava
was with Mostek Corporation for 3 years, responsible for CMOS development. Dr.
Shrivastava served on the Electrical Engineering faculty at Louisiana State
University where he also received his Ph.D.. Dr. Shrivastava completed his
Masters and Bachelor's degrees in Electrical Communication Engineering from
Indian Institute of Science, Bangalore, India and a Bachelor's degree in Physics
from Jabalpur University, India. Dr. Shrivastava is named inventor in over 12
patents related to various technologies, and is a Senior Member of IEEE.

-9-
<PAGE>

Security Ownership of Certain Beneficial Owners And Management

The following table sets forth information that has been provided to the Company
with respect to beneficial ownership of shares of the Company's Common Stock as
of July 10, 2000 (or such other date as may be indicated in the footnote for the
respective person) for (i) each person or entity who is known by the Company to
own beneficially more than 5% of the outstanding shares of Common Stock, (ii)
each executive officer named in the Summary Compensation Table, (iii) each
director of the Company and (iv) all directors and executive officers of the
Company as a group. On July 10, 2000, there were 41,491,580 shares of the
Company's Common Stock outstanding.

<TABLE>
<CAPTION>
Shares Beneficial
Owned (1)(2)
---------------------
Name of Beneficial Owner Number of Percent
Shares (%)
------------------------------------- ------------ --------
<S> <C> <C>
N. Damodar Reddy (3) 7,728,150 18.6
C.N. Reddy (4) 7,589,750 18.3
State of Wisconsin Investment Board 2,407,500 5.8
Jon B. Minnis (6) 849,090 2.1
Sanford L. Kane (7) 140,000 *
Ritu Shrivastava (8) 139,560 *
David Eichler (9) 20,000 *
Bradley Perkins 0 *
All executive officers and 15,477,460 37.3
directors named in the Summary
Compensation Table as a group (5
persons) (10)
</TABLE>

* Less than 1%.
(1) Unless otherwise noted, the Company believes that all persons or entities
named in the table have sole voting and sole investment power with respect
to all shares of Common Stock shown in the table to be beneficially owned by
them, subject to community property laws where applicable.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within sixty (60) days of July 10, 2000 upon the
exercise of options, excluding, however, options granted pursuant to the
Company's 1996 Employee Stock Purchase Plan ("ESPP"), as the shares subject
to option under the ESPP for the next applicable Purchase Date (August 15,
2000) may depend upon the fair market value of the Company's Common Stock on
such Purchase Date, which value is not known as of the date of this Proxy
Statement. Each stockholder's percentage ownership is determined by assuming
that options that are held by such person (but not those held by any other
person) and that are exercisable within sixty (60) days of July 10, 2000
have been exercised.
(3) Includes 345,000 shares held of record by N.D.R. Investments, Inc., of
which N. Damodar Reddy is the sole shareholder. The address of N. Damodar
Reddy is c/o Alliance Semiconductor Corporation, 2575 Augustine Drive,
Santa Clara, California 95054. Includes 40,000 shares subject to options
exercisable within sixty (60) days of July 10, 2000.
(4) Includes 677,500 shares held of record by C.N. Reddy Investments, Inc., of
which C.N. Reddy is the sole shareholder. The address of C.N. Reddy is c/o
Alliance Semiconductor Corporation, 2575 Augustine Drive, Santa Clara,
California 95054. Includes 30,000 shares subject to options exercisable
within sixty (60) days of July 10, 2000.
(5) Represents shares held as of July 6, 2000, as reported on Amendment No. 4 to
Schedule 13G filed by the State of Wisconsin Investment Board on or about
July 10, 2000. The address of the State of Wisconsin Investment Board is
P.O. Box 7842, 112 East Wilson Street, Madison, Wisconsin 53707.
(6) Includes 859,000 shares owned of record by Milpitas Materials Company, of
which Mr. Minnis is the President and a shareholder. Includes 10,000 shares
subject to options exercisable within sixty (60) days of July 10, 2000.
(7) Includes 30,000 shares subject to options exercisable within sixty (60) days
of July 10, 2000.
(8) Includes 99,082 shares subject to options exercisable within sixty (60) days
of July 10, 2000.
(9) Includes 20,000 shares subject to options exercisable within sixty (60) days
of July 10, 2000.
(10)Includes 229,082 shares subject to options exercisable within sixty (60)
days of July 10, 2000.

-10-
<PAGE>

Executive Compensation

The following table sets forth certain information concerning compensation of
(i) the Company's Chief Executive Officer, (ii) the four other most highly
compensated executive officers of the Company serving at April 1, 2000, for the
fiscal year ended April 1, 2000 and each of the Company's past two fiscal years.

<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Annual Compensation Compensation
Awards
---------------------------- -------------
FiscalSalary Bonus Other Securities
Name and Principal Year ($) ($)(1) Annual Underlying
Position Compensation Options
($)(2) (#)(3)
------------------------ ----- ------ ------- ------------ -------------
<S> <C> <C> <C> <C> <C>
N. Damodar Reddy 2000 300,000 797,125(4) - 200,000
President and Chief 1999 300,000 - - -
Executive Officer 1998 300,000 - - -
-
C. N. Reddy 2000 274,992 797,125(4) - 150,000
Executive Vice 1999 274,992 - - -
President and Chief 1998 274,992 - - -
Operating Officer -

David Eichler (5) 2000 200,000 28,469(4) - -
Vice President, Finance 1999 49,259 - - 100,000
and Administration, CFO 1998 - - - -

Bradley Perkins (6) 2000 175,000 - - -
Vice President and 1999 37,159 - - 100,000
General Counsel 1998 - - - -

Ritu Shrivastava 2000 170,640 28,469(4) -
Vice President, 1999 169,328 - 127,081(7) 198,750
Technology Development 1998 158,000 250 - 125,000
</TABLE>

(1) Represents bonuses earned for services rendered during the fiscal year
listed, even if paid after the end of the fiscal year.

(2) Perquisites are excluded as their aggregate value did not meet the
reporting threshold of the lesser of $50,000 or ten per cent (10%) of the
individual's salary plus bonus.

(3) Reflects net options granted (i.e., does not include options issued upon
repricing, where same number of options were canceled pursuant to the
repricing), and excludes grants of options pursuant to the ESPP.

(4) Represents the fair market value of Broadcom Corporation stock at the time
of distribution as a bonus.

(5) Mr. Eichler joined the Company in January 1999.

(6) Mr. Perkins joined the Company in December 1998.

(7) In May 1998, Mr. Shrivastava voluntarily renounced his prior stock option
and the Company agreed to pay Mr. Shrivastava $127,081 as a settlement of
its obligation to reimburse him.

-11-
<PAGE>

Option Grants In Last Fiscal Year

The following table provides information concerning each grant of options to
purchase the Company's Common Stock made during the fiscal year 2000 to the
executive officers named in the Summary Compensation Table above.

Potential Realizable
Securities Individual Value at assumed
Underlying Grants % of Exercise Annual Rates of
Options Total Price Expiration Stock Price
Granted to Per Appreciation for
Employees in Option Term ($)(1)
-------------------------
Grantee Granted Fiscal Year Share Date 5% 10%
(#) (%)(2) ($)(3)
------------------- --------- ------------- --------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
N. Damodar Reddy 40,624(4) 3.5 12.3077 8/31/05 638,125 805,235
N. Damodar Reddy 159,376(4) 13.8 11.1888 8/31/05 2,275,89 2,871,903
C.N. Reddy 40,624(4) 3.5 12.3077 8/31/05 638,125 805,235
C.N. Reddy 109,376(4) 9.5 11.1888 8/31/05 1,561,89 2,418,856
</TABLE>

(1) The above information concerning five per cent (5%) and ten per cent (10%)
assumed annual rates of compounded stock price appreciation is mandated by
the Securities and Exchange Commission. There is no assurance provided to
any executive officer or to any other optionee that the actual stock price
appreciation over the option term will be at the assumed five per cent (5%)
and ten per cent (10%) levels set forth on the table or at any other
defined level. Unless the market price of the Common Stock of the Company
does in fact appreciate over the option term, no value will be realized
from the options grants made to the executive officers or to any other
optionee.

(2) Reflects percentage of total options granted to employees in fiscal 2000.

(3) The exercise price may be paid in cash or pursuant to a cashless exercise
procedure under which the optionee provides irrevocable instructions to a
brokerage firm to sell the purchased shares and to remit to the Company,
out of the sale proceeds, an amount equal to the exercise price.

(4) These options granted pursuant to the Company's 1992 Stock Option Plan are
exercisable as to twenty per cent (20%) of the shares underlying the
option, in five equal annual installments commencing one year from the date
of grant. Each of the reported options is an incentive stock option ("ISO")
to the extent it does not exceed applicable limits set by the tax laws, and
non-qualified stock option for the remainder. For each option that exceeds
such limits, the number of shares underlying the option grant is allocated
between two options, the first an ISO up to the applicable limits set by
the tax laws, and the second a non-statutory option for the balance of the
shares. In each case, vesting continues only so long as employment with the
Company or one of its subsidiaries (or in the case of non-statutory stock
option, one of the Company's affiliates) continues.

Aggregated Option Exercises In Last Fiscal Year and Fiscal Year-End Option
Values

The following table sets forth information concerning shares acquired on
exercise of stock options during fiscal 2000 and the value of stock options held
at the end of fiscal 2000 by each of the executive officers named in the Summary
Compensation Table above.

Number of Securities Value of
Shares Value Underlying Unexercised
Acquired Realized Unexercised Options In-The-Money
on at Fiscal Year End Options at Fiscal
(#)(2) Year End ($)(2)(3)
------------------------- -------------------------
Grantee Exercise(#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
(#)
----------------- ---------- --------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
N. Damodar Reddy 0 0 0 200,000 0 2,004,284
C. N. Reddy 0 0 0 150,000 0 1,491,849
David Eichler 0 0 20,000 80,000 347,500 1,390,000
Brad Perkins 20,000 440,002 0 80,000 0 1,354,960
Ritu Shrivastava 116,293(4) 2,329,231 99,082 74,000 1,566,932 1,147,740
</TABLE>

(1) "Value Realized" represents the fair market value of the shares underlying
the option on the date of exercise based on the per share closing price of
the Company's Common Stock as reported on the Nasdaq National Market, less
the aggregate exercise price, and may not be realized upon the sale of the
shares underlying the option, and does not necessarily indicate that the
optionee sold such shares.

(2) Excludes options pursuant to the Company's 1996 Employee Stock Purchase
Plan for the purchase period in effect at 2000 fiscal year-end, as amount
of shares to be purchased and purchase price per share are not determinable
prior to August 15, 2000.

(3) These values have not been and may never be realized. They are based on the
difference between the respective exercise prices of outstanding stock
options and the closing price of the Company's Common Stock on April 1,
2000 of $21.4375 per share.

-12-
<PAGE>

Certain Transactions

In May 1998, the Company loaned N. Damodar Reddy and C.N. Reddy the sums of
approximately $895,078 and $720,429, respectively, to pay taxes associated with
their respective exercises in May 1998 of options granted in 1993 pursuant to
the Company's 1992 Stock Option Plan. Each of the borrowers executed a
promissory note in favor of the Company with respect to their respective loan.
Each such note provides that on or before December 31, 1998, the borrower shall
repay the outstanding principal, together with interest at a rate of 5.50% per
annum. In December 1998, the Board extended the term of each promissory note by
one year, to December 31, 1999. In December 1999, the Board again extended the
term of each promissory note by one year, to December 31, 2000. Each such note
provides that if the borrower's full-time employment with the Company ceases,
any unpaid principal plus accrued interest shall become immediately due and
payable. Moreover, each such note is secured by certain shares of the Company's
fully-paid and non-assessable Common Stock that borrower had owned for more than
six months prior to the date of the note; in the case of N. Damodar Reddy, the
note is secured by 186,000 shares of Common Stock; in the case of C.N. Reddy,
the note is secured by 150,000 shares of Common Stock. No payments have been due
or made to date with respect to either such note. The aggregate indebtedness at
July 10, 2000 under such notes is approximately $999,690 (in the case of N.
Damodar Reddy) and $804,624 (in the case of C.N. Reddy), respectively.

In June 1998, the Company loaned Sanford L. Kane the sum of $119,997, in
connection with Mr. Kane's exercise of options granted in 1993 pursuant to the
Company's 1992 Stock Option Plan. Mr. Kane executed a promissory note in favor
of the Company with respect to such loan. Pursuant to the note, Mr. Kane agreed
to repay the principal in three equal annual installments, together with
interest at a rate of 5.58% per annum. Mr. Kane repaid the note in December
1999.

The Company has made an $1,000,000 investment in Legacy Systems, Inc., for
which Mr. Kane is Chairman and CEO. Because of the investment, Alliance is
entitled to a board seat, which is presently occupied by Mr. N. Damodar
Reddy. Legacy Systems produces wet-processing semiconductor manufacturing
equipment, and is not a competitor, supplier or customer of Alliance.

In October 1999, the Company formed Alliance Venture Management, LLC, ("Alliance
Venture Management"), a California limited liability corporation, to manage and
act as the general partner in the investment funds the Company intended to form.
Alliance Venture Management does not directly invest in the investment funds
with the Company, but is entitled to a management fee out of the net profits of
the investment funds. This management company structure was created to provide
incentives to the individuals who participate in the management of the
investment funds by allowing them limited participation in the profits of the
various investment funds through the management fees paid by the investment
funds.

In November 1999, the Company formed Alliance Ventures I, LP ("Alliance Ventures
I") and Alliance Ventures II, LP ("Alliance Ventures II"), both California
limited partnerships. The Company, as the sole limited partner, owns 100% of the
shares of each partnership. Alliance Venture Management acts as the general
partner of these partnerships and receives a management fee of 15% of the
profits from these partnerships for its managerial efforts. At Alliance Venture
Management's inception, Series A Units and Series B Units in Alliance Venture
Management were created. The unit holders of Series A units and Series B units
receive management fees of 15% of investment gains realized by Alliance Ventures
I and Alliance Ventures II, respectively. In February 2000, upon the creation of
Alliance Ventures III, LP ("Alliance Ventures III"), the management agreement
for Alliance Venture Management was amended to create Series C Units which are
entitle Alliance Venture Management to receive a management fee of 16% of
investment gains realized by Alliance Ventures III.

-13-
<PAGE>

Each of the owners of the Series A, B and C Units paid the initial carrying
value for their shares of the member units. While the Company owns 100% of the
common units in Alliance Venture Management, it does not hold any series A, B or
C Units and does not participate in the management fees generated by the
management of the investment funds. The Company's senior management hold the
majority of the units of Alliance Venture Management:

<TABLE>
<CAPTION>
Initial
Carrying
Units Type Value
------ ---------------- -------------
<S> <C> <C> <C>
Alliance 10,000 Common Units $2,500.00
Semiconductor
Corporation

N. Damodar Reddy 10,000 Series A Units 2,500.00
10,000 Series B Units 2,500.00
8,000 Series C Units 2,000.00

C.N. Reddy 10,000 Series A Units 2,500.00
10,000 Series B Units 2,500.00
8,000 Series C Units 2,000.00

Bradley Perkins 632 Series A Units 158.00
1000 Series B Units 250.00
933 Series C Units 233.25

David Eichler 421 Series A Units 105.25
764 Series B Units 191.00
600 Series C Units 150.00

Non-executive 10,000 Series A Units 2,500.00
employee and other 12,941 Series B Units 3,235.25
non-employee 15,333 Series C Units 3,833.25
</TABLE>

On May 12, 2000, Alliance Ventures I made a distribution of the Vitesse
Semiconductor Corporation ("Vitesse") stock that had been acquired by Alliance
Ventures I in exchange for its sale of its one million shares of Orologic, Inc.
("Orologic") as follows:

<TABLE>
<CAPTION>
Shares of
Vitesse
-----------
<S> <C>
Alliance 632,876
11.21% shares to be held in 95,417
escrow for Alliance
N. Damodar Reddy 39,977
C.N. Reddy 39,977
Bradley Perkins 2,533
David Eichler 1,690
Non-executive employee 39,977
-----------
Total shares resulting from sale 852,447
of 1,000,000 Orologic shares
===========
</TABLE>

N. Damodar Reddy and C.N. Reddy have formed private venture funds, Galaxy
Venture Partners, L.L.C., and Galaxy Venture Partners II, L.L.C., which invest
in some of the same investments as the Company. Additionally, an outside venture
fund is being formed in which certain of the Company's officers and employees,
as well as the Company itself, are planning to make similar venture investments.

Report on Executive Compensation

NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT")
THAT MIGHT INCORPORATE FUTURE FILINGS, INCLUDING THIS PROXY STATEMENT, IN WHOLE
OR IN PART, THIS SECTION ENTITLED "REPORT ON EXECUTIVE COMPENSATION" SHALL NOT
BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS OR INTO ANY FUTURE FILINGS,
AND SHALL NOT BE DEEMED SOLICITING MATERIAL OR FILED UNDER THE SECURITIES ACT OR
EXCHANGE Act.

REPORT OF COMPENSATION COMMITTEE AND STOCK BENEFIT COMMITTEE

The Compensation Committee of the Board of Directors sets the base salary of the
Company's executive officers and approves individual bonuses for executive
officers. The Stock Benefit Committee of the Board of Directors administers the
Company's 1992 Stock Option Plan and 1996 Employee Stock Purchase Plan under
which grants

-14-
<PAGE>

may be made to executive officers and others. The following is a summary of
policies of the Compensation Committee and Stock Benefit Committee that affect
the compensation paid to executive officers, as reflected in the tables and text
set forth elsewhere in this Proxy Statement.

GENERAL COMPENSATION POLICY
The Compensation Committee and Stock Benefit Committee's overall policies with
respect to executive officers is to offer competitive compensation opportunities
for such persons based upon their personal performance, the financial
performance of the Company and their contribution to that performance. Each
executive officer's compensation package is comprised of three elements: (i)
base salary that reflects individual performance and is designed primarily to be
competitive with salary levels in the industry, (ii) stock-based incentive
awards designed to strengthen the mutuality of interests between the executive
officers and the Company's stockholders, and (iii) for executive officers in the
sales and marketing functions, and for other executive officers in certain other
circumstances, annual or quarterly cash bonuses related to the performance of
the Company for such executive officer's functional area. In addition, from time
the time the Company has forgiven certain debt obligations of executive officers
to the Company.

FACTORS
Several important factors considered in establishing the components of each
executive officer's compensation package for the 2000 fiscal year are summarized
below. Additional factors were taken into account to a lesser degree. The
Compensation Committee and Stock Benefit Committee may in their discretion apply
entirely different factors, such as different measures of financial performance,
for future fiscal years. However, it is presently contemplated that all
compensation decisions will be designed to further the overall compensation
policy described above.

BASE SALARY. The base salary for each executive officer is set on the basis of
personal performance, the salary levels in effect for comparable positions in
similarly situated companies within the semiconductor industry, and internal
comparability considerations. The Compensation Committee believes that the
Company's most direct competitors for executive talent are not limited to the
companies that the Company would use in a comparison for stockholder returns.
Therefore, the compensation comparison group is not the same as the industry
group index used in the section "Comparison of Stockholder Return," below.

STOCK-BASED INCENTIVE COMPENSATION. The Stock Benefit Committee approves
periodic grants of stock options to each of the Company's executive officers and
others under the Company's 1992 Stock Option Plan and administers the Company's
1996 Employee Stock Purchase Plan. The grants under these plans are designed to
align the interests of the optionees with those of the stockholders and provide
each individual with a significant incentive to manage the Company from the
perspective of an owner with an equity stake in the business. Moreover, vesting
schedules of options granted pursuant to the 1992 Stock Option Plan
(historically four or five years from the date of grant) encourage a long-term
commitment to the Company by its executive officers and other optionees. Each
grant pursuant to the 1992 Stock Option Plan generally allows the optionee to
acquire shares of the Company's Common Stock at a fixed price per share (the
fair market value on the grant date) over a specified period of time
(historically, up to one year after full vesting), thus providing a return to
the optionee only if the market price of the shares appreciates over the option
term. The size of the option grant pursuant to the 1992 Stock Option Plan to
each optionee is set at a level that the Stock Benefit Committee deems
appropriate in order to create a meaningful opportunity for stock ownership
based upon the individual's current position with the Company, but also takes
into account the individual's potential for future responsibility and promotion
over the option vesting period, and the individual's performance in recent
periods. The Stock Benefit Committee periodically reviews the number of shares
owned by, or subject to options held by, each executive officer, and additional
awards are considered based upon past performance of the executive officer. The
1996 Employee Stock Purchase Plan affords Company employees (other than owners
of 5% or more of the Company's securities) the opportunity to purchase Company
Common Stock twice a year at a discount to the market value on the date of
purchase, by utilizing funds that have been withheld from the employee's payroll
during the preceding six-month period (employees may elect to have up to 10% of
their payroll withheld for such purpose).

ANNUAL OR QUARTERLY CASH BONUSES. Other than with respect to executive officers
engaged in the sales and marketing functions, the Company historically has not
had a formal cash bonus program for executive officers, although cash bonuses
have been paid from time to time in the past to selected executive officers in
recognition of superior individual performance. For fiscal 2000, officers in the
sales function received bonuses based upon the Company's achievement of certain
sales milestones, and Messrs. Damodar Reddy, C.N. Reddy, Eichler and

-15-
<PAGE>

Shrivastava each received a bonus of Broadcom Corporation common stock based
upon individual performance regarding the Maverick Networks, Inc. investment and
merger with Broadcom Corporation.

CEO COMPENSATION
In setting the compensation payable during fiscal 2000 to the Company's Chief
Executive Officer, N. Damodar Reddy, the Compensation Committee used the same
factors described above for the executive officers. Mr. Reddy was granted two
stock options of 40,629 and 159,376 shares, vesting equally over five years, at
an exercise price of $12.3077 (110% of fair market value on date of grant, as
required by the 1992 Stock Option Plan for incentive stock options granted to
grantees who are 10% or greater shareholders) for the first stock option, an
incentive stock option, and $11.1888 for the second option, a non-qualified
stock option. Additionally, Mr. Reddy received a bonus of Broadcom Corporation
common stock based upon his performance regarding the Maverick Networks, Inc.
investment and merger with Broadcom Corporation, valued at $797,125 based on the
fair market value of the stock on the day of distribution.

EFFECT OF SECTION 162(M) OF THE INTERNAL REVENUE CODE
Section 162(m) of the U.S. Internal Revenue Code limits the tax deductibility by
a corporation of compensation in excess of $1 million paid to any of its five
most highly compensated executive officers. However, compensation which
qualifies as "performance-based" is excluded from the $1 million limit if, among
other requirements, the compensation is payable only upon attainment of
pre-established, objective performance goals under a plan approved by
stockholders.

The Compensation Committee does not presently expect total cash compensation
payable for salaries to exceed the $1 million limit for any individual
executive. Having considered the requirements of Section 162(m), the
Compensation Committee believes that stock option grants to date meet the
requirement that such grants be "performance based" and are, therefore, exempt
from the limitations on deductibility. The Compensation Committee will continue
to monitor the compensation levels potentially payable under the Company's cash
compensation programs, but intends to retain the flexibility necessary to
provide total cash compensation in line with competitive practice, the Company's
compensation philosophy, and the Company's best interests.

Submitted by the Compensation Committee and the Stock Benefit Committee of
the Company's Board of Directors:

COMPENSATION COMMITTEE STOCK BENEFIT COMMITTEE
---------------------- -----------------------
N. Damodar Reddy, Chairman Jon B. Minnis, Chairman
Jon B. Minnis, Member Sanford L. Kane, Member
Sanford L. Kane, Member

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS

The Company presently has no employment contracts, plans or arrangements in
effect for executive officers in connection with their resignation, retirement
or termination of employment or following a change in control or ownership of
the Company.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee, are Messrs. Sanford L. Kane, Jon
B. Minnis and N. Damodar Reddy. The members of the Stock Benefit Committee
are Messrs. Kane and Minnis. Neither Mr. Kane nor Mr. Minnis was at any
time during fiscal 2000 or any other time an officer or employee of the
Company. Mr. Reddy has been President and Chief Executive Officer of the
Company, and Chairman of the Company's Board of Directors, since the
Company's founding in 1985.

-16-
<PAGE>

Comparison of Stockholder Return

NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OR THE EXCHANGE ACT THAT MIGHT
INCORPORATE FUTURE FILINGS, INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART,
THIS SECTION ENTITLED "COMPARISON OF STOCKHOLDER RETURN" SHALL NOT BE
INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS OR INTO ANY FUTURE FILINGS, AND
SHALL NOT BE DEEMED SOLICITING MATERIAL OR FILED UNDER THE SECURITIES ACT OR
EXCHANGE ACT.

The graph below compares the cumulative stockholder return on the Company's
Common Stock from the date of the Company's initial public offering (November
30, 1993) to March 31, 2000 with the cumulative return on the Nasdaq Stock
Market (U.S.) Index and the Nasdaq Electronic Component Stock Index over the
same period (assuming the investment of $100 in the Company's Common Stock and
in each of the indexes on November 30, 1993 and reinvestment of all dividends).

[CHART OMITTED]

<TABLE>
<CAPTION>
11/30/93 3/31/94 3/31/95 3/31/96 3/31/97 3/31/98 3/31/99 3/31/00
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Alliance Semiconductor 100.0 159.4 796.9 270.7 228.5 210.9 70.3 75.5
Corporation

Nasdaq Stock Market (U.S.) 100.0 98.4 109.5 148.7 165.2 250.7 337.0 574.7
Index

Nasdaq Electronic 100.0 108.6 142.1 186.8 327.7 375.0 548.9 1,110.5
Component Stock Index
</TABLE>

-17-
<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company's directors and executive
officers, and persons who own more than 10% of the Company's Common Stock ("10%
Stockholders"), to file with the Securities and Exchange Commission ("SEC")
initial reports of ownership on a Form 3 and reports of changes in ownership of
Common Stock and other equity securities of the Company on a Form 4 or Form 5.
Officers, directors and 10% Stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.

To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during fiscal 2000 all Section 16(a) filing requirements
applicable to its officers, directors, and 10% Stockholders were complied with,
except in the case of a sale by C.N. Reddy on August 30, 1999, which was
inadvertently not reported until October 1999.

Stockholder Proposals

Stockholder proposals that are intended to be presented at the Company's 2001
Annual Meeting of Stockholders must be received by the Company no later than
March 25, 2001.

Other Business

The Board of Directors does not presently intend to bring any other business
before the Annual Meeting and, so far as is known to the Board, no matters are
to be brought before the Annual Meeting except as specified in the notice of
such meeting. As to any business that may properly come before the Annual
Meeting, or any adjournment thereof, however, it is intended that Proxies, in
the form enclosed, will be voted in accordance with the judgment of the persons
voting such Proxies.

--------------------------------------------------------------------------------
Whether or not you plan to attend the meeting in person, you are urged to
sign and promptly mail the enclosed proxy in the return envelope provided so
that your shares will be represented at the meeting.
--------------------------------------------------------------------------------

By Order of the Board of Directors,

/s/ C.N. Reddy

C.N. REDDY
EXECUTIVE VICE PRESIDENT,
CHIEF OPERATING OFFICER AND SECRETARY

-18-
<PAGE>

ALLIANCE SEMICONDUCTOR CORPORATION PROXY FOR
2000 ANNUAL MEETING OF STOCKHOLDERS SEPTEMBER 8, 2000

THIS PROXY IS SOLICITED ON BEHALF OF
ALLIANCE SEMICONDUCTOR CORPORATION'S BOARD OF DIRECTORS

The undersigned hereby appoints N. Damodar Reddy and C. N. Reddy, or either of
them, proxies and attorneys-in-fact, each with full power of substitution and
revocation thereof, on behalf of and in the name of the undersigned, to
represent the undersigned at the 2000 Annual Meeting of Stockholders of Alliance
Semiconductor Corporation (the "Company") to be held at the Company's
headquarters, 2575 Augustine Drive, Santa Clara, California 95054 on Friday,
September 8, 2000 at 10:00 a.m., local time, and at any adjournments or
postponements thereof, and to vote the number of shares the undersigned would be
entitled to vote if personally present at the meeting as directed on the reverse
side of this proxy, and, in their discretion, upon such other matters as may
properly come before the meeting or any adjournments or postponements thereof.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY AND
WILL BE VOTED AS DIRECTED ON THE REVERSE SIDE OF THIS PROXY. IN THE ABSENCE OF
DIRECTION, THIS PROXY WILL BE VOTED FOR THE FOUR NOMINEES FOR ELECTION AND FOR
PROPOSAL 2 and 3. In their discretion, the proxy holders named above are
authorized to vote upon such other business as may properly come before the
meeting or any adjournments or postponements thereof. The Board of Directors
recommends a vote for election of each of the four nominees and for Proposals 2
and 3. The undersigned hereby acknowledges receipt of: (a) the Notice of 2000
Annual Meeting of Stockholders of the Company; (b) the accompanying Proxy
Statement; and (c) the Annual Report to Stockholders for the fiscal year ended
April 1, 2000.

(Continued On The Other Side)

<PAGE>

[ X ] Please mark your votes as in this example

Withhold for All For All Nominees Below
(except as indicated) (except as indicated)

1. Election of Directors [ ] [ ]
SANFORD L. KANE, JON B. MINNIS,
C. N. REDDY AND N. DAMODAR REDDY.
(If you wish to withhold
authority to vote for any
individual nominee, strike
through the nominee's name above.)
(The Board recommends a vote "FOR" all nominees)

For Against Abstain

2. Approve Amendment to the Company's [ ] [ ] [ ]
1992 Stock Plan to increase the
number of shares of common stock
reserved for issuance by 2,000,000
shares, from 11,000,000 to 13,000,000
shares.
(The Board recommends a vote "FOR").

3. Ratification of Appointment of Price-
waterhouseCoopers LLP As The Company's [ ] [ ] [ ]
Independent Accountants.
(The Board recommends a vote "FOR").

I Plan To Attend The Meeting [ ]

Please sign exactly as your name(s) appears on your stock certificate. If shares
of stock stand of record in the names of two or more persons or in the name of
husband and wife, whether as joint tenants or otherwise, both or all of such
persons should sign the proxy. If shares of stock are held of record by a
corporation, the proxy should be executed in full corporate name by the
president or vice president and the secretary or assistant secretary. If shares
of stock are held of record by a partnership, the proxy should be executed in
partnership name by an authorized person. Executors or administrators or other
fiduciaries who execute the above proxy for a deceased stockholder should give
their full title. Please date this proxy.

Whether Or Note You Plan To Attend The Meeting In Person, You Are Urged To Sign
And Promptly Mail This Proxy In The Return Envelope Provided So That Your Shares
May Be Represented At The Meeting.

Signature(s) ___________________________________ Dated: __________________, 2000

Please Vote, Date And Promptly Return This Proxy In The Enclosed Return Envelope
Which Is Postage Prepaid If Mailed In The United States.