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February 10, 2009

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

  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 January 14,
2009 (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.              Please refer to our
prior comment 1.  We note that in 2006
you recognized $2.6 million from prepaid royalties consisting of several
intellectual property arrangements.  With
regard to the pre-production prepaid royalties please address the following:

·                  We note that you
recognized revenue upon execution of license agreements.  Please tell us the term of the license
agreement as stated in the agreement and confirm to us that you recognized
revenue upon delivery which does not occur for revenue recognition purposes
until the license term begins.  Please
refer to SAB Topic 13.A.3.d.

The breakdown of the $2.6
million in prepaid royalties by agreement is as follows:

License Agreement A - $1.0
million in pre-production prepaid royalties

License Agreement B - $152,000
in post-production prepaid royalties

License Agreement C - $300,000
in post-production prepaid royalties

License Agreement D - $500,000
in post-production prepaid royalties

License Agreements E, F, G -
$650,000 in pre-production prepaid royalties that were not recognized up-front

Under License Agreement A, we
recognized $1.0 million of prepaid pre-production royalties as license revenue
upon execution of that technology license agreement with a single licensee. The
license grant set forth in License Agreement A stated:

“Subject to the payment of the
License Fees and the terms and conditions herein MoSys hereby grants to
Licensee and Subsidiaries a worldwide, non-exclusive non-transferable (whether
by assignment, sublicense or otherwise), revocable and royalty-bearing license
under MoSys Intellectual Property Rights to create Design Instances for use

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by themselves or by customers in
the design of Licensed Integrated Circuits and to make, have made, and Sell
Licensed Integrated Circuits incorporating such Design Instances (the “MoSys
License”).”

The license term set forth in
License Agreement A stated:

“The term of this Agreement
with regard to each Template Schedule attached to this Agreement shall commence
as of the effective date of such Template Schedule [July 24,
2006] and will remain in force and effect for a period of seven (7) years
with respect to the Template that is the subject of such Template Schedule,
unless earlier terminated as provided for herein.  This Agreement will automatically renew at
the end of each such seven (7) year term for consecutive one (1) year
renewal periods.”

We recognized the entire $1.0 million upon signing in accordance with
SAB Topic 13.A.3.d because that is when the term commenced and the specified
MoSys license was the only delivery we were required to make under the
agreement.

·                  Please tell us if you have
any continuing involvement under the agreement, including, but not limited to,
research and development activities, maintenance of any information used by the
licensee during the license term, agreements to sell products, etc.  Please refer to SAB Topic 13.A.3.f.

As stated above, under License
Agreement A we
had no continuing involvement or substantive obligations subsequent to the
execution of the agreement.  We determined the fees paid up-front by the
licensee for the license grant and royalty prepayment under this agreement had
standalone value to the licensee because it allowed the licensee, as of the
effective date of the agreement to legally commence the development of products
incorporating our technology without violating our intellectual property.  The licensee is a major integrated device manufacturer
that has significant internal development resources who were qualified to work
with our technology with no assistance from our engineering resources.

In
determining revenue recognition in our license arrangements that included
up-front fees, we considered  SAB
Topic 13.A.3.f., which addresses scenarios in which registrants collect an
up-front fee and have continuing involvement with the customers that
paid them such up-front fees. Specifically,
the guidance under SAB Topic 13.A.3.f, footnote 36 states:

“The staff believes that the vendor
activities associated with the up-front fee, even if considered a deliverable
to be evaluated under EITF Issue 00-21, will rarely provide value to the
customer on a standalone basis.”

Our only obligation to the customer was set forth in the following
paragraph from License Agreement A:

“Technical
Meetings: During the period from the effective date of the Template Schedule
Number 3 until the date of first delivery of commercial samples of the Licensed
Integrated Circuit by Licensee to its customer, qualified engineers from MoSys
and Licensee may, upon Licensee’s request, hold a technical meeting at such
time and place as to be mutually agreed to discuss issues concerning 1T-SRAM
Technology and macro design using 1T-SRAM Technology for 65nm.”

We
considered the technical meeting to fall under the definition of “inconsequential
and perfunctory,” as contemplated in SAB Topic 13.A.3.c.  It was deemed that such a meeting, if held,
would have no related cost to the Company.
To date, the licensee has not requested such a technical meeting.  We believed the failure to have a requested
technical meeting would not result in the licensee receiving a refund or
rejecting the license grant, so we considered this obligation to be  inconsequential and perfunctory and did not
account for it as a deliverable under the agreement.

·                  Tell us if the licensee is
obligated to pay you any additional fees during the license term or if it is
anticipated that the licensee will purchase any additional products under the
license agreement.

License Agreement A was a
technology license agreement, not a product purchase agreement. The licensee’s
only additional fee obligation is to pay royalties based on its sale of
products incorporating the licensed technology, once the prepaid royalties have
been exhausted.

2.              With regard to your
post-production prepaid royalties, please respond to the following:

·                  If the prepaid royalties
fees were, in fact, prepaid and relate to future royalty obligations please
clarify why you believe it is appropriate to recognize the revenue prior to the
culmination of the earnings process.
Cite the specific GAAP guidance that supports your accounting.

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Under License Agreement B, we received and recognized as revenue a
$152,000 payment from the licensee for a royalty buyout arrangement.  Under License Agreement C, we received and
recognized as revenue a $300,000 payment from the licensee for a royalty buyout
arrangement. We recognized the prepaid royalties as revenue upon the signing of
each agreement, which we deemed to be the culmination of the earnings processes
because we did not have continuing involvement with the licensee, and we had no
future obligations to the licensee. The prepaid royalty fee was non-cancelable
and non-refundable and payable within the Company’s standard payment terms, so
there was no contingency related to collection.

Under License Agreement D, we
recognized $500,000 of prepaid royalty revenue from a single licensee
upon signing the agreement. A portion of the prepaid royalties, approximately
$134,000, was payment for royalties owed to us for shipments that had occurred
in the six months prior to the execution of the license agreement, which
therefore was not a prepaid royalty but an amount owed for past due royalties.

We note the guidance set forth
in SAB Topic 13A.3.f., which states:

“Unless the up-front fee is in
exchange for products delivered or services performed that represent the
culmination of a separate earnings process, the deferral of revenue is
appropriate.”

We also note Statement of Financial Accounting Concepts No. 5,
which states:

“Revenues are not recognized until earned.  Revenues are considered to have been earned
when the entity has substantially accomplished what it must do to be entitled
to the benefits represented by the revenues.”

We also considered the following factors set forth
in SAB Topic 13 to determine whether a separate earnings event had occurred:

·                  Whether the registrant will incur future
costs under the agreement; and

·                  Whether the registrant’s customers will make
subsequent periodic payments for future products or services.

We
evaluated these specific factors for each of the three license agreements and
determined the following:

·                  We were not obligated to incur nor did we
incur future costs to satisfy the prepaid royalty obligations set forth in the
agreement; and

·                  The licensee was not obligated to purchase or
pay for future products or services from us. At the time of execution, each
agreement granted perpetual licenses to manufacture products that incorporated
the then-existing licensed technology.

As with License Agreement A above, each of these three license
agreements had standalone value to the licensee as of the date of execution of
the agreement because the licensee received the right to use our technology in
manufacturing its products, which was the consideration that we provided for
the payment of the specified amount, in addition to royalties on product
shipments by the licensee in excess of the prepayment.  The prepayment was non-refundable
irrespective of the licensee’s production, however.

·                  With regards to the
$450,000 up-front payment, please tell us if you have had or will have any
continuing involvement with the licensee and, if so, how your revenue
recognition is consistent with SAB Topic 13.A.3.f.

As described in the preceding
response, we received and recognized as revenue a total payment of $452,000 for
royalty buyout arrangements under License Agreements B and C.

The specific language from
License Agreement B is set forth below.

“Licensee shall pay to MoSys,
without additional or further obligation from MoSys, the non-refundable, non
cancelable amount of $152,000 in part payment of royalty, payable within
forty-five days of the Effective Date of this Letter Agreement.”

The specific language from
License Agreement C is set forth below.

“4.2 (d) Royalty Buy-out.
… Licensee shall buy-out all future royalties for the IC with a $300,000 lump
sum payment to MoSys due net thirty days from the Amendment Effective Date.
Subject to such two payments, no

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future royalties for the Project
Schedule 001 IC shall be due MoSys. For the avoidance of doubt, Section 4.2
(Royalties) of the Agreement shall have no further force and
effect with respect to Project Schedule 001.”

We considered SAB Topic
13.A.3.f., which provides guidance for recognition of non-refundable up-front
fees.  We noted that in the examples
provided in SAB Topic 13.A.3.f., the registrants had additional performance
obligations to their customers (i.e., maintaining a website that customers can
access, providing telecommunications services, etc.).  We had no additional performance obligations
to our licensees under License Agreements B and C and viewed these up-front
royalty buyout payments as the culminations of separate earnings processes. The
royalty buyouts represented discrete earnings events, as we had already completed
our obligations to our licensees, and the royalty buyout amounts were
non-refundable, regardless of whether the licensees ever shipped any additional
products containing the licensed technology. We had no continuing involvement
with the licensee under either agreement with respect to these payments.

·                  With regards to the
$500,000 up-front payment, it appears from your response that you have an
ongoing obligation to develop and obtain silicon qualification.  In light of this obligation, please specifically
tell us how you determined it was appropriate to recognize the revenue up-front
based on the guidance of SAB Topic 13.A.3.f., noting footnote 36.

As
noted above, we received this payment under License Agreement D.  We determined that the $500,000 up-front
payment for royalties and underlying license had value to the licensee because
without it, the licensee would not be able to continue manufacturing integrated
circuits for its customers that incorporated the licensed technology.  The agreement was signed in October 2006
(revenue was recognized in the fourth quarter of 2006), but the effective date
of the license grant was retroactive to April 2006, as the licensee had
already commenced the design and manufacture of products incorporating the
licensed technology. The licensee is a major semiconductor foundry that
licenses technology from third parties for use in its manufacturing process.
The licensee prepaid $500,000 of royalties to apply against product shipments
that had commenced in April 2006. As noted above, approximately $134,000
of the $500,000 in prepaid royalties related to product shipments between April 2006
and October 2006.

The specific language from
License Agreement D is set forth below.

“LICENSEE shall pay to MoSys
the following amount of non-refundable, non-cancelable Prepaid Royalty to be
credited against the royalties which are due to MoSys according Section 3
Per Unit Royalty below. The Prepaid Royalty shall be paid in full and due as
follows: US$500,000 net 60 days from execution of the Agreement.”

The
guidance under SAB Topic 13.A.3.f, footnote 36 states: “The staff believes that the vendor activities
associated with the up-front fee, even if considered a deliverable to be
evaluated under EITF Issue 00-21, will rarely provide value to the customer on
a standalone basis.”

The
obligation to obtain silicon qualification was unrelated to the up-front
payment.  Under License Agreement
D, the licensee also paid us for other performance.  We did not recognize those payments as
prepaid royalties up-front.  The
obligation to obtain silicon qualification related to such other performance.

·                  We see your statement as
part of your response to our prior comment 2 that “[You] classify
post-production royalties within reported royalty revenues because the revenue
is directly tied to the licensee’s use of [your] technology in their currently
shipping commercial products.”  Based
upon this classification, it appears that post-production royalties would be
recorded over the term of the agreements as earned, please tell us how this is
consistent with your determination that the $450,000 and $500,000 should be
recognized up-front.

These amounts are discussed above with respect to License Agreements B,
C and D.  As stated above, we recognized
these royalties up-front because we deemed that the earnings process had
culminated in each case.  The
timing of our revenue recognition is distinct from our determination whether to
classify the revenue as license fees or royalties.  Any payment we received before the licensee
successfully incorporates our licensed technology and commences commercial
production, we classify as license fees.
Once the licensee achieves successful incorporation of our licensed
technology and commences commercial production, we generally classify the
payments we recei