AFOP Alliance Fiber Optic Products, Inc.

Alliance Fiber Optic Products, Inc. (NASDAQ:AFOP), an innovative supplier of fiber optic components, subsystems and integrated modules for the optical network equipment market, today reported its financial results for the first quarter ended March 31, 2009.

Revenues for the first quarter of 2009 totaled $7,643,000, a 19% decrease from revenues of $9,401,000 recorded in the first quarter of 2008 and 7% decrease compared with revenues of $8,201,000 for the fourth quarter of 2008. The Company recorded net income for the first quarter of 2009 of $302,000. This compares to net income for the fourth quarter of 2008 of $820,000 and $820,000 for the first quarter of 2008.

Included in expenses for the quarter ended March 31, 2009 was $28,000 of stock-based compensation charges under FAS 123(R). Included in expenses for the quarter ended March 31, 2008 and the fourth quarter of 2008 were $51,000 and $30,000 of stock-based compensation charges under SFAS 123(R), respectively.

Peter Chang, President and Chief Executive Officer, commented, �Despite our revenue decrease in the first quarter reflecting overall economic conditions, we are pleased with our financial performance. We generated quarterly profits over the last twelve quarters and maintained gross margins at or above 30%, while reducing inventory in the quarter ending March 31, 2009.�

�In addition, we gained new customers and new design wins during the quarter. Based on input from our customers and current backlog, we expect that revenues in the second quarter of 2009 will grow sequentially, instead of declining. With higher revenues in the coming quarter, we expect our gross margin will improve and profits will increase as well,� concluded Mr. Chang.

Conference Call

Management will host a conference call at 1:30 p.m. Pacific Time on April 22, 2009 to discuss AFOP�s first quarter 2009 financial results. To participate in AFOP�s conference call, please call 877-407-9210 at least ten minutes prior to the call in order for the operator to connect you. The confirmation number for the call is�319964. AFOP will also provide a live webcast of its first quarter 2009 conference call at AFOP�s website: www.afop.com. An audio replay will be available until May 1, 2009. The dial in for the replay is 877-660-6853. The replay pass-codes (account # 286; conference ID#: 319964) are both required for the replay.

About AFOP

Founded in 1995, Alliance Fiber Optic Products, Inc. designs, manufactures and markets a broad range of high performance fiber optic components and integrated modules. AFOP's products are used by leading and emerging communications equipment manufacturers to deliver optical networking systems to the long-haul, enterprise, metropolitan and last mile access segments of the communications network. AFOP offers a broad product line of passive optical components including interconnect systems, couplers and splitters, thin film DWDM components and modules, fixed and variable optical attenuators, and depolarizers. AFOP is headquartered in Sunnyvale, California, with manufacturing and product development capabilities in the United States, Taiwan and China. AFOP's website is located at http://www.afop.com.

Except for the historical information contained herein, the matters set forth in this press release, including statements as to future market demand, and our expectations regarding second quarter 2009 results, including our expectations regarding our second quarter 2009 revenues, gross margin and profits, and the basis for our expectations, are forward looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including, but not limited to, general economic conditions and trends, the impact of competitive products and pricing, timely introduction of new technologies, timely design acceptance by our customers, the acceptance of new products and technologies by our customers, order trends and customer demand, the timing of customer orders, loss of key customers, ability to ramp new products into volume production, industry-wide shifts in supply and demand for optical components and modules, industry overcapacity, failure of cost control initiatives, financial stability in foreign markets, and other risks detailed from time to time in our SEC reports, including AFOP's quarterly report on Form 10-K for the year ended December 31, 2008. These forward-looking statements speak only as of the date hereof. AFOP disclaims any intention or obligation to update or revise any forward-looking statements.

ALLIANCE FIBER OPTIC PRODUCTS, INC. Condensed Consolidated Balance Sheets (in thousands) � � �

Mar. 31,

Dec. 31, 2009 2008 (Unaudited) ASSETS Current assets: Cash and short-term investments $ 23,402 $ 23,954 Accounts receivable 5,167 4,708 Inventories 4,968 5,614 Other current assets � 492 � 379 Total current assets 34,029 34,655 � Long-term investments 14,483 13,718 Other asset - ARS Right 1,817 2,582 Property and equipment, net 4,357 4,653 Other assets � 179 � 190 Total assets $ 54,865 $ 55,798 � � LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 3,410 $ 3,572 Accrued expenses and other liabilities � 2,683 � 3,374 Total current liabilities 6,093 6,946 � Long-term liability � 828 � 891 Total liabilities 6,921 7,837 � Stockholders' equity 47,944 47,961 � � Total liabilities and stockholders' equity $ 54,865 $ 55,798 � ALLIANCE FIBER OPTIC PRODUCTS, INC. Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) � � � � Three Months Ended Mar. 31, Dec. 31, Mar. 31, 2009 2008 2008 � Revenues $ 7,643 $ 8,201 $ 9,401 � Cost of revenues � 5,345 � 5,662 � 6,455 Gross profit � 2,298 � 2,539 � 2,946 � Operating expenses: Research and development 729 645 898 Sales and marketing 634 485 668 General and administrative � 845 � 812 � 894 Total operating expenses 2,208 1,942 2,460 � Income from operations 90 597 486 Interest and other income, net � 222 � 319 � 396 Net income before tax 312

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916 882 Income tax � 10 � 96 � 62 Net income $ 302 $ 820 $ 820 � Net income per share: Basic $ 0.01 $ 0.02 $ 0.02 Diluted $ 0.01 $ 0.02 $ 0.02 � Shares used in per share calculation: Basic 41,872 41,796 41,392 Diluted 41,897 41,827 44,423 � Included in costs and expenses above: Stock based compensation charges Cost of revenue $ 14 $ 15 $ 22 Research and development 6 6 10 Sales and marketing 4 4 7 General and administrative � 4 � 5 � 12 Total $ 28 $ 30 $ 51