SecProbe.io

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<TYPE>LETTER
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Mail Stop 6010

      June 21, 2005

Mr. Jack L. Saltich
Chief Executive Officer
Three-Five Systems, Inc.
1600 North Desert Drive
Tempe, AZ 85281

      Re:	Three-Five Systems, Inc.
Form 10-K for the Year Ended December 31, 2004
Form 10-K/A for the Year Ended December 31, 2004
Form 10-Q for the Quarter Ended March 31, 2005
		File No. 001-04373

Dear Mr. Saltich:

      We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments.  If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.  After
reviewing this information, we may raise additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Form 10-K for the Year Ended December 31, 2004

Notes to Consolidated Financial Statements

Note 2. Summary of Significant Accounting Policies, page F-9

Property, Plant & Equipment, page F-12

1. We note that you entered into a sale-leaseback transaction for
your building located in Tempe, Arizona in December 2004.  We also
note that you had previously conveyed your ownership in the same
building to the City of Tempe in exchange for a rent-free 75 year
lease.  Please tell us how you accounted for (1) the conveyance of
the building to the City of Tempe in 1994; (2) the re-purchase of
the
building from the City of Tempe for $1,000 in mid-2004; and (3)
the
sale of the building in December 2004.  Include in your response
how
you determined the amounts that you recorded in your financial
statements for each of the items noted above.

Form 10-Q for the Quarter Ended March 31, 2005

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note B. Discontinued Operations, page 7

2. We note that you have completed your exit from the Display
segment
business with the sale of the display business operated out of
your
Massachusetts facility in May 2005, and that this business will be
reported as discontinued operations in the second quarter of 2005.
We also note that you have sold a portion of your EMS business
that
is currently reported as discontinued operations.  Please revise
your
disclosures in future filings to include a table detailing the
results of operations and significant assets and liabilities of
each
of your discontinued operations separately in order to more
clearly
disclose the activities included in discontinued operations.
Refer
to paragraph 47 of SFAS 144.

Item 4. Controls and Procedures, page 25

3. Please revise your disclosure in future filings concerning
changes
in your internal control over financial reporting to indicate
whether
there was any change to your internal control over financial
reporting during the quarter being reported on that has materially
affected, or that is reasonably likely to materially affect, your
internal control over financial reporting.  Refer to Item 308(c)
of
Regulation S-K.

Form 8-K dated February 9, 2005

4. Your disclosures related to the non-GAAP measures included in
Form
8-K dated February 9, 2005 do not include the disclosures required
by
paragraph (e)(1)(i) of Item 10 of Regulation S-K and Question 8 of
the FAQ Regarding the Use of Non-GAAP Financial Measures dated
June
13, 2003.  If you elect to present non-GAAP financial measures in
future Forms 8-K, please revise your presentation to specifically
include a discussion, in sufficient detail, of the following for
each
non-GAAP measure:

* The substantive reasons why management believes the non-GAAP
measure provides useful information to investors;

* The specific manner in which management uses the non-GAAP
measure
to conduct or evaluate its business;

* The economic substance behind management`s decision to use the
measure; and

* The material limitations associated with the use of the non-GAAP
measure as compared to the use of the most directly comparable
GAAP
measure and the manner in which management compensates for these
limitations when using the non-GAAP measure.

Please note that these disclosures are required for each measure
presented that differs from the most directly comparable GAAP
measure.

      As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response.  You may wish to provide us with marked copies of
the amendment to expedite our review.  Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested information.  Detailed cover letters
greatly
facilitate our review.  Please understand that we may have
additional
comments after reviewing your amendment and responses to our
comments.

	 We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed decision.  Since the company and
its management are in possession of all facts relating to a
company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

	You may contact Tom Dyer, Staff Accountant, at (202) 551-3641
or
Kevin Vaughn, Reviewing Accountant, at (202) 551-3643 or me at
(202)
551-3327 if you have questions regarding comments on the financial
statements and related matters.

      Sincerely,

      Michele Golke
      Branch Chief
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Mr. Jack L. Saltich
Three-Five Systems, Inc.
June 21, 2005
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