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     6-K

September
7, 2005

Ms. Kathleen Collins

Securities and Exchange Commission

100 F Street N.E.

Washington, D.C. 20549

 Re:
Silicom
Ltd.
 Form 20-F for Fiscal Year Ended December 31, 2004

 File No. 000-23288

Dear Ms. Collins:

        On
behalf of Silicom Ltd., an Israeli Company (the “Company”), set forth below are
the Company’s responses to the comments (the “Comments”) of the staff of
the Division of Corporation Finance (the “Staff”) with respect to the Company’s
report on Form 20-F for the fiscal year ended December 31, 2004 (the “Report”),
transmitted by letter dated August 15, 2005 (the “Comment Letter”). For the
convenience of the Staff, we have restated in this letter each of the Comments in the
Comment Letter and numbered each of the responses to correspond with the numbers of the
Comments in the Comment Letter.

Form 20-F for the Year Ended
December 31, 2004

Item 15. Controls &Procedures,
page 62

 1.
We
note that your evaluation was completed “within 90 days of the filing date of this
annual report.” Tell us how you considered Section F of Release No. 33-8238, which
requires that the evaluation be done “as of the end of the period” covered by the
annual or quarterly reports.

Response: The
Company advises the Staff that, as stated in Item 15 of the Report, the evaluation of the
Company’s disclosure controls and procedures referred to the end of the period
covered by the Report and the Company stated that its disclosure controls and procedures
were effective “as of the end of the period covered by this report”. The
Company therefore believes that the disclosure in Item 15 was correct and in compliance
with Section F of the SEC’s Release No. 33-8238.

Ms. Kathleen Collins

September 7, 2005

Page 2 of 3

Report of Independent Registered
Public Accounting Firm, page F-1

2.
We
note that for the year ended December 31, 2002, the Company’s independent public
accounting firm did not audit the financial statements of the Company’s consolidated
subsidiary. Tell us how you considered Article 2-05 of Regulation S-X, which requires
that the report of the other auditors be included in the filing when your principal
auditors rely on such work and make reference to such report. Further guidance may be
found in Section 5J of “International Reporting and Disclosure Issues in the
Division of Corporation Finance” on the Commission’s website at:
http://www.sec.gov/divisions/corpfin/internatl/cfirdissues1104.htm#P442_69217. Also, tell
us whether or not your principal auditors relied on the work of other auditors for the
years ended December 31, 2003 and 2004.

Response: The
Company advises the Staff that it considered both Article 2-05 of Regulation S-X and
Section 5J of “International Reporting and Disclosure Issues in the
Division of Corporation Finance” and that the report of McGladrey & Pullen
Certified Public Accountants (the “Subsidiary’s Auditors”), relating to
the financial statements of the Company’s consolidated subsidiary for the year ended
December 31, 2002, was included as Exhibit 14.2 of the Report. The report by the
Subsidiary’s Auditors was prepared in accordance with PCAOB Standards and does not
contain limitations as to the scope of the audit performed by such auditors. Furthermore,
such report does not refer to deviation from GAAP. The Subsidiary’s Auditors are
registered with the PCAOB. The Company further advises the Staff that its principal
auditors did not rely on the work of other auditors for the years ended December 31, 2003
and 2004.

Note 2 – Significant Accounting
Policies

K. Revenue Recognition, page F-9

3.
We
note from disclosure on page 13 that products are shipped to                prospective
customers for evaluation and qualification                purposes.
Describe your accounting for these arrangements and tell us when
revenue is recognized. We further note that this                evaluation process may
entail customization of your Server                Networking Cards.
Tell us how you account for these customization services. If                you recognize
revenues for such services, then please                provide your revenue recognition
policy.

Response: The
Company advises the Staff that revenue for evaluation and qualification purposes is
recognized upon the earlier of the end of the period during which the customer may return
the products, or acceptance by the customer of the shipped products. With respect to
customization of the Company’s products for the specific needs of customers, the
Company advises the Staff that it does not charge its customers for customization
services and therefore does not recognize any revenues for such services nor does it
recognize revenue from the products until such customization is completed.

Ms. Kathleen Collins

September 7, 2005

Page 3 of 3

4.
We
also note from disclosure on page 18 that OEMs may attempt to return
               unsold products. Tell us whether you offer any
               contingencies such as right of return, price protection, price
concessions, warranties, etc., and tell us the nature of these
               contingencies and your accounting treatment for each.
               Describe significant assumptions, material changes and reasonably likely
               uncertainties.

Response: The
Company advises the Staff that it does not offer its OEMs contingencies such as rights of
return, price protection or price concessions and the Company’s standard agreements
with its OEMs include provisions to such effect. With respect to the inability to return
products the Company refers the Staff to the risk factor titled “The loss or
ineffectiveness of our original equipment manufacturers may have a
material adverse effect on our operations and financial results.” on
page 5 of the Report, which includes disclosure of such matter. The Company does provide
warranties for its products. The costs of such warranties are immaterial and have been
accrued based on historical experience.

        We
have enclosed a letter from the Company including certain acknowledgements required by the
Staff in the Comment Letter.

        Kindly
contact the undersigned at (972-3) 608-7726, if you have any questions or require
additional information.

Very truly yours,

S/David H. Schapiro

David H. Schapiro

cc:
Mr.
Eran Gilad
   Chief Financial Officer

September 7, 2005

 Ms. Kathleen Collins

 Securities and Exchange Commission

 100 F Street N.E.

 Washington, D.C. 20549

 Re:
Silicom
Ltd.
 Form 20-F for Fiscal Year Ended December 31, 2004

 File No. 000-23288

Dear Ms. Collins:

        Reference
is made to the letter dated August 15, 2005, whereby the staff of the Division of
Corporation Finance (the “Staff”) transmitted certain comments (the “Comments”)
to Silicom Ltd., an Israeli Company (the “Company”), with respect to the Company’s
report on Form 20-F for the fiscal year ended December 31, 2004. In connection with its
responses to the Comments, the Company acknowledges that:

1.
the
Company is responsible for the adequacy and accuracy of the disclosure in the filing;

2.
Staff
comments or changes to disclosure in response to Staff comments do not foreclose the
Securities and Exchange Commission (the “Commission”) from taking any action
with respect to the filing; and

3.
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.

Very truly yours,

Silicom Ltd.

BY: /S/ Eran Gilad

Eran Gilad
Chief Financial Officer