Waterloo, Ontario, January 20 2006 - DALSA Corporation (TSX:DSA), an international high performance semiconductor and electronics company, today announced preliminary fourth quarter 2005 financial results. For the quarter, the Company expects revenue to be $41.8 million, which is below the revenue goal of $43.5 to $47.5 million provided on October 27, 2005. At that level of revenue, earnings are expected to be $0.05 per share diluted, which is below Management's expectations. The Company was cash flow positive from operations in the quarter.

"In the fourth quarter, several orders from flat panel display and professional photography customers in the Company's Digital Imaging Business were pushed out, resulting in revenues that were below expectations," said Savvas Chamberlain, CEO of DALSA Corporation. "This unanticipated shortfall, in addition to unfavourable product mix in the Semiconductor Business, contributed to the lower than expected earnings in the quarter. Although we are disappointed we did not meet our financial goals due to these factors, we are encouraged to see that some flat panel display orders pushed out of the fourth quarter are now shipping in the first quarter of 2006. After an unprecedented year long pause in FPD capital equipment build-out in 2005, recent reports market-wide indicate next generation plants will launch in 2006 and our shipment of orders in early 2006 supports that indication."

Final Fourth Quarter Results and Conference Call
The Company will release its final Fourth Quarter 2005 financial results at 4:00pm ET on Thursday, January 26th, 2006. A conference call to discuss the results will be held the same day at 5:00pm ET.

The conference call, followed by the question and answer period, will be broadcast live and open to anyone interested in listening at http://events.onlinebroadcasting.com/dalsa/012606/index.php. The phone numbers for those who wish to participate in the question and answer period are as follows:

Live Conference Access Information:
Local / International Number: 416-850-9150
North American Toll-Free Number: 1-866-809-4939

Instant Replay Access information:
Local Dial-In Number: 402-220-7735
Toll-Free Dial-In Number: 1-800-766-3735
Passcode: 4254668
Expiry: February 9, 2006

About DALSA Corporation
DALSA is an international high performance semiconductor and electronics company that designs, develops, manufactures, and markets digital imaging products and solutions, in addition to providing semiconductor products and services. DALSA's core competencies are in specialized integrated circuit and electronics technology, software, and highly engineered semiconductor wafer processing. Products and services include image sensor components; electronic digital cameras; vision processors; image processing software; and semiconductor wafer foundry services for use in MEMS, high-voltage semiconductors, image sensors and mixed-signal CMOS chips. DALSA is listed on the Toronto Stock Exchange under the symbol "DSA". The Company has its corporate offices in Waterloo, ON and approximately 1000 employees world-wide.

For more information, please contact:

Patrick Myles
Director, Corporate Communications
DALSA Corporation
Tel: (519) 886-6001 Ext. 2177
Fax: (519) 886-3972
E-mail: [email protected]
Internet: www.dalsa.com

This press release contains forward looking statements based on assumptions, uncertainties and management's best estimates of future events. Actual results may differ materially from those currently anticipated. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements are detailed from time to time in DALSA's periodic reports filed with the Ontario Securities Commission and other regulatory authorities. DALSA has no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.