Integrated Silicon Solution (ISSI) 8-K Issi Announces Second Quarter Fiscal 2009 Results

FOR IMMEDIATE RELEASE

ISSI ANNOUNCES SECOND QUARTER FISCAL 2009 RESULTS

SAN JOSE, Calif., Apr. 28, 2009 /PRNewswire – FirstCall/ — Integrated Silicon Solution, Inc. (Nasdaq: ISSI) today reported its financial results for its second fiscal quarter ended March 31, 2009.

Revenue in the quarter ended March 31, 2009 was $31.3 million, a 17% decrease from revenue of $37.7 million in the December 2008 quarter and a 46% decrease from revenue of $58.0 million in the March 2008 quarter.  Gross margin for the quarter was 20.7%, compared with 20.5% in the December 2008 quarter and 22.9% in the March 2008 quarter.

The Company reported a net loss for the March 2009 quarter of $3.8 million or ($0.15) per diluted share.  These results compare with a net loss for the December 2008 quarter of $4.1 million or ($0.16) per share.  The Company reported net income for the March 2008 quarter of $2.0 million, or $0.07 per diluted share.

The Company's cash, cash equivalents and short-term investments totaled $44.0 million at March 31, 2009, compared to $45.7 million at December 31, 2008.  In addition, the Company had long-term investments of $21.1 million at March 31, 2009, the same amount as at December 31, 2008.  The Company's inventory at March 31, 2009 totaled $27.7 million, a reduction of $10.4 million from December 31, 2008.

"Demand further weakened in all of our markets during the March quarter due to the worldwide economic slowdown.  However, we believe demand has now stabilized and that customers are nearing the completion of their inventory reductions," said Scott Howarth, ISSI's President and CEO.  "During the March quarter, we took further actions to preserve cash by reducing our spending and inventory significantly which reduced our net loss despite the decline in our revenue.  Our balance sheet remains very strong as we had $65.1 million in cash and investments at March 31," added Mr. Howarth.

Conference Call

A conference call will be held today at 1:30 p.m. Pacific time to discuss this release. To access ISSI's conference call via telephone, dial 1-800-210-9006 by 1:20 p.m. Pacific time. The call will be webcast from ISSI's website at http://www.issi.com.

-more-

ISSI Release

April 28, 2009

Page 2

About the Company

ISSI is a fabless semiconductor company that designs and markets high performance integrated circuits for the following key markets: (i) digital consumer electronics, (ii) networking, (iii) mobile communications, (iv) automotive electronics, and (v) industrial. The Company's primary products are high speed and low power SRAM and low and medium density DRAM. The Company also designs and markets EEPROM, SmartCards and is developing selected non-memory products focused on its key markets. ISSI is headquartered in Silicon Valley with worldwide offices in Taiwan, Japan, Singapore, China, Europe, Hong Kong, India, and Korea. Visit our web site at http://www.issi.com.

Forward Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning our belief that demand has now stabilized and that customers are nearing the completion of their inventory reductions and our  balance sheet remaining strong are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties include supply and demand conditions in the market resulting from adverse conditions in the economy, liquidity and credit concerns or other factors, unexpected reductions in average selling prices for our products, our ability to sell our products for key applications and the pricing and gross margins achieved on such sales, our ability to control or reduce operating expenses, changes in manufacturing yields, order cancellations, order rescheduling, product warranty claims, competition, the level and value of inventory held by OEM customers, or other risks listed from time to time in the Company's filings with the Securities and Exchange Commission, including the Company's Form 10-K for the year ended September 30, 2008 and the Company’s Form 10-Q for the quarter ended December 31, 2008.  The Company assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise.

-###-

CONTACT:

John M. Cobb

Chief Financial Officer

Investor Relations

(408) 969-6600

ir@issi.com

Integrated Silicon Solution, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share data)

	Three Months Ended					Six Months Ended
	March 31,					March 31,
	2009			2008		2009			2008
Net sales	$	31,253		$	58,046	$	68,918		$	121,394
Cost of sales		24,786			44,750		54,718			94,897
Gross profit		6,467			13,296		14,200			26,497
Operating expenses:
Research and development		4,186			4,935		9,394			9,709
Selling, general and administrative		6,408			7,463		13,709			15,125
Total operating expenses		10,594			12,398		23,103			24,834
Operating income (loss)		(4,127	)		898		(8,903	)		1,663
Interest and other income, net		282			1,105		864			3,179
Gain on sale of investments		-			-		-			189
Income (loss) before income taxes and minority interest		(3,845	)		2,003		(8,039	)		5,031
Provision (benefit) for income taxes		(42	)		40		(102	)		100
Income (loss) before minority interest		(3,803	)		1,963		(7,937	)		4,931
Minority interest in net (income) loss of consolidated subsidiaries		(23	)		20		41			19
Net income (loss)	$	(3,826	)	$	1,983	$	(7,896	)	$	4,950
Basic net income (loss) per share	$	(0.15	)	$	0.07	$	(0.31	)	$	0.15
Shares used in basic per share calculation		25,508			28,160		25,556			32,374
Diluted net income (loss) per share	$	(0.15	)	$	0.07	$	(0.31	)	$	0.15
Shares used in diluted per share calculation		25,508			28,436		25,556			32,668

Integrated Silicon Solution, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

	March 31,			September 30,
	2009			2008
	(unaudited)				(1)
ASSETS
Current assets:
Cash and cash equivalents	$	38,233		$	42,175
Short-term investments		5,804			7,840
Accounts receivable, net		19,055			34,741
Inventories		27,662			39,222
Other current assets		2,754			4,717
Total current assets		93,508			128,695
Property, equipment and leasehold improvements, net		23,811			24,555
Long-term investments		21,088			19,304
Purchased intangible assets, net		2,371			2,000
Other assets		1,349			1,397
Total assets	$	142,127		$	175,951
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	13,183		$	35,171
Accrued compensation and benefits		3,118			3,729
Accrued expenses		5,805			8,157
Total current liabilities		22,106			47,057
Other long-term liabilities		667			715
Total liabilities		22,773			47,772
Commitments and contingencies
Minority interest		2,396			789
Stockholders' equity:
Common stock		3			3
Additional paid-in capital		309,771			310,712
Accumulated deficit		(188,327	)		(180,431	)
Accumulated other comprehensive loss		(4,489	)		(2,894	)
Total stockholders' equity		116,958			127,390
Total liabilities and stockholders' equity	$	142,127		$	175,951

(1) Derived from audited financial statements.