Alliance Fiber Optic Products Declares Special Cash Dividend of $0.02 Per Share

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 declares special cash dividend of two cents per share to be paid on January 15, 2010, to the record holders of AFOP common stock as of the close of business on Dec 31, 2009.

Peter Chang, President and Chief Executive Officer, commented, “AFOP has been profitable since the beginning of 2006 and increased the level of cash and cash equivalent from $29.4M to $41.9M in the end of the third quarter of 2009. As we look at our cash management, our priority is to grow the business through research and development or acquisition of business. However, in the meantime, we need to enhance shareholder values as well, and we believe that a special cash dividend will contribute to this goal.”

“This payout will not affect AFOP commitment to research and development or possible merger and acquisition activities to fuel our growth in the years ahead. In addition, we are confident in our long-term ability to grow revenue, profits and shareholder value through our innovation and execution,” concluded Mr. Chang.

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