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December 18, 2008

Ms. Angela Crane

Accounting
Branch Chief

Division of
Corporation Finance

United States
Securities and Exchange Commission

100 F Street,
N.E.

Washington, D.C. 20549

Re: Mosys, Inc.

Form 10-K for the year ended December 31, 2007

Filed March 17, 2008

Form 10-Q for the quarter ended September 30, 2008

Filed November 7, 2008

File No. 000-32929

Dear Ms. Crane:

MoSys, Inc.
(“we” or the “Company”) submits this letter in response to the comments from
the Staff of the Division of Corporation Finance of the Securities and Exchange
Commission (the “Staff”), which were set forth in your letter dated November 25,
2008 (the “Letter”) regarding the above referenced documents.

Form 10-K for the Year Ended December 31,
2007

Financial Statements, page 50

Note 1. The Company and Summary of Significant
Accounting Policies, page 54

Revenue Recognition, page 56

Royalty, page 58

1.              We note from your disclosure that
in 2006 you began recognizing revenue from two types of prepaid royalties,
pre-production royalties and post-production royalties, and the revenue related
to both types of royalties is recognized upon execution of the related
contract.  Based on your disclosure it is
unclear to us why you believe it is appropriate to recognize the revenue in its
entirety upfront at execution of the contract in accordance with the guidance
of SAB Topic 13A.  Please provide us with
the specific terms of your agreements with regards to these prepaid royalties
and the amounts of related revenue you recognized in 2006 and 2007.  Please cite the specific accounting guidance
upon which you based your accounting.

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We have recognized revenue
from prepaid royalties when the revenue recognition criteria set forth in SAB
Topic 13A have been met.  If the
agreements have multiple elements, we have allocated the fair value to each
unit, as prescribed under EITF Issue No. 00-21.

For the year ended December 31,
2007, we recognized no revenue from prepaid royalties.

For the year ended December 31,
2006, we recognized revenue of $2.6 million from prepaid royalties, consisting
of the following:

·                  Pre-production prepaid royalties - we
recognized $1.0 million as license revenue upon execution of a technology
license agreement with a licensee.
The  terms of that agreement
provided:

·                  a
technology license grant allowing the licensee  to use the Company’s technology to build the
licensee’s own products at the 65-nanometer semiconductor manufacturing process
node;

·                  no requirement that the Company
provide any services or support; and

·                  a non-refundable prepaid royalty of
$1.0 million that was not contingent upon the licensee entering production or
ever shipping product containing the Company’s
technology.

Based
on our evaluation of the revenue recognition criteria set forth in   SAB Topic 13A, we determined that the pre-production
prepaid royalty fee paid by the licensee should be recorded as revenue upon    execution of the agreement for the following
reasons:

·                  we executed a formal agreement with
the licensee;

·                  no deliverables or development or
support services were required to be performed by the Company under the
agreement and the license grant was effective upon execution of the agreement;

·                  the fees were non-refundable and not contingent
upon future product shipments by the licensee; regardless of whether the
licensee ever shipped any product, the Company would not be obligated to refund
any of the fees; and

·                  the fees were payable by the licensee
in a time period consistent with the Company’s normal billing terms.

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·                  Post-production prepaid royalties - we
recognized $950,000 as royalty revenues upon execution of license renewal
agreements or amendments with each of three licensees.  Two of these agreements, representing
$450,000 included terms providing that:

·                  the prepaid royalty fees were buy-outs
of future royalty obligations under the original license agreements, under
which each of the licensees already had commenced production and shipment of
products incorporating the Company’s licensed technology;

·                  the royalty buy-out fees were
non-refundable, and regardless of whether the licensees shipped any additional
product, the Company would not be obligated to refund any of the fees; and

·                  the Company had no remaining
performance obligations to the licensees.

The third
agreement, representing $500,000 of up-front revenue, included terms providing:

·                   a license grant allowing the licensee
to use the Company’s technology to manufacture products for itself and its
customers at the 65-nanometer and earlier generation semiconductor
manufacturing process nodes;

·                  a non-refundable prepaid royalty that
was not contingent upon the licensee continuing production of existing products
or beginning production of new products; and

·                  an obligation for the Company to
develop and obtain silicon qualification for memory reference designs for the
90-nanometer and 65-nanometer semiconductor manufacturing process nodes.

Based on our evaluation of
the revenue recognition criteria set forth in SAB Topic 13A, we determined that
those prepaid post-production royalty fees should be recorded as revenue upon
execution of the agreements for the following reasons:

·                  we executed formal agreements with the
licensees;

·                  in the agreements where $450,000 of up-front
revenue was recognized, no deliverables or development or support services were
required because the licensees had already commenced production and shipment of
the royalty-bearing products incorporating the Company’s technology;

·      in
the agreement where $500,000 of up-front revenue was recognized, the agreement
provided for multiple deliverables and we determined that we had established
the fair value of the undelivered element of the

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arrangement
and thus recognized the prepaid royalty fees using the residual method as set
forth in paragraph 12 of EITF No. 00-21;

·                  the prepaid royalty fees were
non-refundable and were not contingent upon future product shipments by the
licensees; and

·                  the prepaid royalty fees were payable
by the licensees within a time period consistent with the Company’s normal
billing terms.

·                  Pre-production prepaid royalties - we
recognized $650,000 as license revenue from three agreements using the
percentage of completion method of accounting as outlined in SOP No. 81-1.
No revenue was recognized upon execution of those agreements because they
included undelivered elements for which there was no objective and reliable
evidence of the fair value (paragraph 16 of EITF No. 21).

2.              In this regard, if material,
please tell us how you considered the prepaid royalties as part of your Results
of Operations discussion in Management’s Discussion and Analysis.  We note your current disclosure states that
you generally recognize royalties in the quarter in which you receive the
licensee’s report.

In the Management’s
Discussion and Analysis section of our annual report on Form 10-K for the
year ended December 31, 2006, we discussed license revenue and royalty
revenue separately, as we consider them two distinct elements of our business
model. We view license revenue as representative of the revenue
streams derived solely from licensing our technology and royalty revenue as
representative of our revenue stream tied to our customers’ success in
manufacturing or selling products utilizing our technology.

For 2006 we did not believe there was a meaningful difference for
MD&A disclosure purposes between license revenues measured as “prepaid
pre-production” royalties and other license revenues, or between royalties
received in the form of “prepaid post-production” royalties and royalties
received under other kinds of royalty provisions.  We classify pre-production prepaid royalties
within reported license revenue because they are paid as part of the initial
license fee and not with respect to products being produced by the
licensee.  We classify post-production
royalties within reported royalty revenues because the revenue is directly tied
to licensees’ use of our technology in their currently shipping commercial
products.  To address the prepaid
royalties would have involved detailed discussions of particular license
agreements, which we did not consider additive to an understanding of our
business model and operations for that year.
In addition, every transaction is the result of a unique negotiation and
the specific

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terms are either required to be kept confidential or are competitively
sensitive for us and our customers, so we generally do not discuss particular
license agreements made in the ordinary course of our business.

Note 4. Asset Acquisitions, page 64

3.              We note that one of the
components of purchased intangible assets related to your 2007 asset purchases
is an assembled workforce.  Please tell
us why you believe this allocation is appropriate based on the guidance in
paragraph 39 of SFAS 141.

We applied the guidance of
EITF Issue No. 98-3 to determine whether our asset purchase transactions
constituted a business combination.  We
evaluated the inputs, processes and outputs related to the acquired assets and
determined:

·                  the transferred assets included
certain technology (know-how), patents, permits, equipment and engineers;

·                  the transferred assets did not include
commercially-ready products, license agreements with third party vendors
enabling us to fully utilize the acquired technology, customer base, sales
force, marketing function or accounting and human resource teams;

·                  the
transferred assets did not include any customers, and none of the technology
acquired was generating any revenue; and

·                  the
degree of difficulty and level of investment necessary to obtain commercially-ready
products, market the products and secure licensees for the products to generate
revenue after the acquisition date was considered significant.

Based on this evaluation, we
concluded that our asset purchase transactions did not constitute a business
combination and should not be accounted for under SFAS No. 141. As a
result, we accounted for the transactions as asset purchases,  and followed the guidance set forth in SFAS No. 142,
paragraph 9, footnote 7, which states:

 “Statement No. 141 requires
intangible assets acquired in a business combination that do not meet certain
criteria to be included in the amount initially recognized as goodwill. Those
recognition criteria do not apply to intangible assets acquired in transactions
other than business combinations.” (emphasis added)

We determined that the assembled workforce was an acquired intangible
asset and recorded it at fair value, which was determined with the assistance
of an independent valuation specialist.

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Form 10Q for Quarter Ended September 30,
2008

Note 1. The Company and Summary of
Significant Accounting Policies, page 6

Investments, page 9

4.              We note that as of September 30,
2008, you had classified $8.3 million (net of $0.9 million in unrealized
losses) of your auction rate securities as long-term investments due to the
disruption in the credit markets that resulted in widespread failed
auctions.  We also note that you used
Level 3 inputs to measure the fair value of the auction rate securities because
there has not been a successful auction since February 2008.  Please address the following:

·                  Please note that paragraphs 32
and 33 of SFAS 157 require an entity to describe the inputs and the information
used to develop those inputs for both recurring and nonrecurring fair value
measurements using significant unobservable inputs (Level 3).  Please explain to us in greater detail about
the methodology and the assumptions you employed to measure the auction rate
securities.  Refer to FSP FAS 157-3 for
further guidance.  Further, please expand
your disclosure to address our concern in future filings.

We
determined that the discounted cash flow method most appropriately estimated
fair value of our auction rate securities (“ARS”) at September 30,
2008.  Other methods considered were the
market and cost approach, but, due to the current illiquidity of the
securities, we believed these methods would not properly reflect fair value.  We used then-current market conditions and
utilized a discounted cash flow valuation model that included the following
significant inputs and considerations:

·                  projected interest income and principal payments through the expected
holding period;

·      a market risk adjusted discount rate, which
was based on actual securities traded in the open market that had similar
collateral composition to the ARS as of September 30, 2008, adjusted for
an expected yield premium of approximately 140 basis points to compensate for
the current lack of liquidity resulting from failing auctions for such
securities; and

·                  no default or collateral value risk adjustments were considered for the
discount rate, because all of the issuers were AAA-rated by nationally
recognized rating agencies, and the ARS were collateralized by student loans,
the repayments of which were substantially guaranteed by the U.S. Department of
Education.

In future filings, we will describe the inputs
and the information used to develop those inputs for both recurring and non-recurring fair value
measurements using significant unobservable inputs and will provide greater
detail about the methodology and the assumptions we employed to measure the
auction rate securities.

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·                  Also in this regard, please
explain to us and expand your disclosure in future filings why the decline in
the fair value of the auction rate securities has not been
other-than-temporary.  Refer to FSP FAS
115-1 for further guidance.

As
noted in SAB Topic 5M, “management should consider all available evidence to
evaluate the realizable value of its investments.”  After considering all such evidence the
Company believed there were no “other than temporary” declines in the fair
value of its ARS at September 30, 2008 for the following reasons:

·                  the creditworthiness of the issuers had not
deteriorated, as they continued to be AAA-rated by the nationally recognized
rating agencies and repayment of the underlying obligations was substantially
guaranteed by the U.S. Department of Education;

·                  interest continued to be paid by the issuers
at the original contractual rates or higher default rates; and

·                  we received a summary of settlement terms
from UBS Financial Services, Inc. (“UBS”) in August 2008, which outlined
potential terms under which UBS would purchase the ARS from the Company at par
value over a period of time between June 2010 and June 2012.  We executed this settlement agreement with
UBS in mid-November 2008. We currently have the ability and intent to hold
our ARS until they can be liquidated in a market that facilitates orderly
transactions or are purchased by UBS under the settlement.

We will
include disclosure in our future filings to explain why we deem the decline in
fair value to not be “other-than-temporary.”

5.              We note that approximately 36% of
your cash equivalents and available for sale securities were measured based on
level 2 inputs.  Your discussion
regarding the inputs used to measure fair value does not appear to be specific
to your investments.  Please tell us more
about the inputs used, including how you obtain these inputs, what they
represent and how you are able to