SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010

       DIVISION OF
CORPORATION FINANCE

January 14, 2008

By U.S. mail and facsimile to 011 (853) 28323265

Ms. Eliza Y. P. Pang Chief Financial Officer Deswell Industries, Inc. 17B, Edificio Comercial Rodrigues 599 Avenida da Praia Grande Macao
 RE: Deswell Industries, Inc.
  Form 20-F for the fiscal  year ended March 31, 2007
  Filed August 1, 2007   Forms 6-K filed August 17, 2007, and November 20, 2007   File No. 0-26448

Dear Ms. Pang:
We have reviewed your filing and have the following comments.  We have
limited our review of your filing to those issu es we have addressed in our comments.
Where indicated, we think you should revise your  disclosures in future filings in response
to these comments.  If you disagree, we w ill consider your explanation as to why our
comment is inapplicable or a revision is unneces sary.  Please be as detailed as necessary
in your explanation.  In some of our comme nts, we may ask you to provide us with
supplemental information so we may better understand your disclosure.  After reviewing
this information, we may or may not raise additional comments.   Please understand that the purpose of our re view 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 on any other aspect of our
review.  Feel free to call us at the telephone numbers listed at the end of this letter.
 Form 20-F for the year ended March 31, 2007

 Property, Plants and Equipment, page 24

1.   We note that you closed the Shenzhen plastic plant during the year ended March
31, 2007, and that it is held for sale.  Pleas e provide us with a timeline explaining
the underlying events leading up to this action and address th e classification on

Ms. Eliza Y. P. Pang
Deswell Industries, Inc. January 14, 2008 Page 2
your balance sheet, the timing of such  classification, and the appropriate
measurement of this asset throughout FY  2007.  Please see paragraphs 30-39 and
46 of SFAS 144, for further guidance.

In addition, tell us what consideration you gave to reporting such activity as
discontinued operations.  Please see para graphs 41-45 of SFAS 144, for further
guidance.
 Operating and Financial Revi ew and Prospects, page 26

 Operating Results, page 26

2.   We note your explanation for the substant ial increase in sales for the most recent
fiscal year. In future filings please expand such explanations as follows:

- Explain whether the increases desc ribed (for example, from the
telecommunications customer and ne w customers) are expected to
continue at this level for the foreseeable future;
- Explain whether the loss of sales from  existing customers is expected to
continue at the lower level for the foreseeable future;
- Quantify how much of the increases and decreases were due to price
changes, and/or volume;
- Explain whether the significant gains and losses in sales were due to new
products and/or the phasing out of older products.  In other words, provide
more detail about the underlying re asons behind the changes, and their
expected future trends.
 10. Income Taxes, page F-12

3.   As previously requested in comment  2 in our letter dated February 28, 2006,
please expand your disclosures to discu ss the nature of those entities and
jurisdictions which you have determined are not subjec t to income taxes, as
disclosed on page F-13, and the amounts associated with each for each period presented.

4.   We note your discussion on page 6 of the impact that the EIT Law will have
effective January 1, 2008.  Please tell us a nd disclose in future filings in MD&A
the rates you have used to measure your income taxes for the fourth quarter of
fiscal 2008, for each separate taxable entity.

5.   We note your statement on page 31 under the discussion of the change in income
taxes during fiscal 2006 that the decrease in income tax expense in the electronic
& metallic segment was primarily due to the write off of doubtful sales of the

Ms. Eliza Y. P. Pang
Deswell Industries, Inc. January 14, 2008 Page 3
metal division of $1,000,006 and the decrease  in operating income during the year
ended March 31, 2006.  Please tell us and disc lose in future filings the following:

- Please explain to us more clearly what you mean by “doubtful sales.”  In
other words was this a write-off of doubtful accounts receivable?  If so,
was it in excess of your normal allowance for doubtful accounts?  Confirm that your revenue recogniti on policies were and are consistent with Staff
Accounting Bulletin 101;
- The underlying history and reason(s) for the write off;
- How you write-off for tax purposes in the reporting period.

6.   We note your statement on page F-13 th at Jetcrown Dongguan has revised its first
and second tax exemption year from th e calendar year ended December 31, 2004,
and 2005 respectively, to the calendar years ended December 31, 2002, and 2003 respectively.  Please address the following:
 - Please tell us and disclose in future filings the tax rate that Jetcrown
Dongguan used for each period presented.
- You state that an amount of $450,000 a dditional income tax assessments
which are likely to arise has been charged to the consolidated income
statement for the year ended Marc h 31, 2007, relating to the taxable
calendar years ended December 31, 2004, 2005 and 2006, and for the
quarter ended March 31, 2007.  Please tell us and disclose in future filings
in MD&A the nature of the assessmen ts, and reconcile the recognition of
this amount to your provision for income taxes on page F-13.
 Form 6-K dated August 17, 2007

7.   We note you recorded a stock provis ion of $500,000 as a result of “the two
customers pushing-out orders.”  Please provide us with a comprehensive explanation of the following:

- What is meant by pushing out orders;
- Identify the customers;
- Why this caused an inventory provision;
- How you accounted for this provision;
- The literature in support of your accounting.
 Form 6-K filed November 20, 2007

8.   We note the $318,000 goodwill impairment recorded during the second quarter
2008. Please tell us and revise your future filings to comply with the disclosure
requirements of paragraph 47 of SFAS 142.

Ms. Eliza Y. P. Pang
Deswell Industries, Inc. January 14, 2008 Page 4
*    *    *    *

Please respond to these comments by providing the supplemental information
requested within ten business days or tell us when you will provide us with a response.  Please provide us with a supplemental respons e that addresses each of our comments.
Please file your supplemental response on EDGAR as a correspondence file.  We may
raise additional comments after we review your responses.
 To expedite our review, you may wish to provide complete packages to each of
the persons named below.  Each package s hould include a copy of your response letter
and any supplemental information.
 We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filings reviewed by the st aff to be certain that they provided all
information investors require.  Since the co mpany 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
their filings;
• staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking a ny action with respect to the filing;
and
• the company may not assert staff comme nts as a defense in any proceeding
initiated by the Commission or any pers on under the federal s ecurities laws of
the United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.
You may contact Jenn Do, St aff Accountant, at (202) 551-3743, or me at (202)
551-3689 if you have questions regarding comm ents on the financial statements and
related matters.            S i n c e r e l y ,            John M. Hartz         S e n i o r  A s s i s t a n t  C h i e f          Accountant