ACL Semiconductors Reports 18% Revenue Increase for Second Quarter 2010

-- Positioned as a Leading Distributor of Samsung Memory Products in Southern China --

-- Sees Gradual Increase of Global Demand for Memory Products in Second Half 2010 --

HONG KONG -- ACL Semiconductors (OTC Bulletin Board: ACLO.OB), a leading China-based distributor of Samsung memory electronic products in Hong Kong and Southern China, reported financial results for the second quarter ended June 30, 2010.

Quarterly Highlights:
-- Net revenue up 18% year over year to $89.53 million
-- Gross margin at 2.2%
-- Diluted earnings per share at $0.02 compared to $0.04 a year ago
-- Over 150 customers in Hong Kong and Southern China


Mr. Alan Yang, Chairman and Chief Executive Officer of ACL Semiconductors, commented, "We are excited to report another quarter of year-over-year revenue growth. In the second quarter our total sales turnover was up 18% as compared to the previous year quarter. These outstanding results reflect the success of our business model and the macro economic factors across Hong Kong and Southern China. Momentum there in the electronic sector particularly for memory products continues into the third quarter as demand for consumer electronics remains robust."

For the second quarter of 2010, ACL Semiconductors reported net revenue of $89.53 million, increase from $75.83 million for the second quarter 2009. The year over year revenue growth was primarily due to an increase of sales volume in the PRC market. Net income for the second quarter ended June 30, 2010 was $593,895 compared to net income of $1.1 million for the second quarter of 2009. Earnings per diluted share was $0.02 for the second quarter 2010, as compared to $0.04 in the year ago quarter.

Gross profit for the second quarter 2010 was $1.9 million, down 24.6% from $2.5 million for the second quarter 2009 primarily due to lower margins. Gross margin for the second quarter of 2010 was 2.2%, down from 3.6% for the second quarter 2009. The decrease in gross profit and gross margins is mainly due to the decrease in average selling prices as the market became saturated with excess supply. The saturation was due to the excess supply intended for the United States and Europe that was pushed into the China market causing the selling price to decrease.

Mr. Yang continued, "During the quarter we continued to take initiatives to improve our internal financial performance and minimize unnecessary costs. We recorded a 9.3% decrease in operating expenses and a 4.5% decrease in interest expense, as compared to the corresponding quarter in 2009. We expect the global market demand and average selling price to pick up in the third quarter of 2010 as a result of the broader rebound in the semiconductor market. We are confident in our outlook as the electronics business is expected to grow for the remainder of the year and we are ready to take advantage of the foreseeable growth in China's market. Most importantly, we are proud of the distribution and product research we supply to Samsung as we are positioned to be a leading distributor of Samsung memory products in Southern China."

About ACL Semiconductors

ACL Semiconductors distributes electronic components under the "Samsung" brand name to the Hong Kong and South China markets. The memory chips are used from everything from a mobile phone, digital camera and laptop computer to an MP3 player or Wi-Fi products. For more information about ACL Semiconductors please visit ACL Semiconductors' corporate website at http://www.acl-semicon.com .