SecProbe.io

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

       DIVISION OF
CORPORATION FINANCE

February 27, 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 November 20, 2007   File No. 0-26448

Dear Ms. Pang:
We have reviewed your response letter  dated February 17, 2008 and have the
following additional comments.  If you disagree , we will consider your explanation as to
why our comment is inapplicable.  In some of our comments, we may ask you to provide
us with supplemental information so we ma y better understand your disclosure.  After
reviewing this information, we may or may not raise additional comments.
 Form 20-F for the year ended March 31, 2007

 Property, Plants and Equipment, page 24

1.   We have read your response to comment  1.  In the future, please include more
clarifying information con cerning the disposal of l ong-lived assets.  Your
disclosures should include th e underlying reasons why they are classified as held
for use, sale or disposal at each period  end, and if material, why and whether the
disposal is considered a discontinued operation.  Also see paragraphs 47 and 48 of
SFAS 144, for further disclosures.
 10. Income Taxes, page F-12

2.   We have read your response to comment 3 in our letter dated January 14, 2008.
You have told us that the amounts associated with your tax exempted companies are aggregated into the si ngle line item “Effect of inco me for which no income tax

Ms. Eliza Y. P. Pang
Deswell Industries, Inc. February 27, 2008 Page 2
is chargeable” in the ra te reconciliation table on page F-14.  Given the
significance of this reconciling item to your effective tax rates for all periods
presented, please disclose in future fi lings the amounts asso ciated with each
individual tax exempted company, as prev iously requested.  Please also confirm
that you will include the cl arifying information provided in your response related
to the nature of these entities in future filings.

3.   We have read your response to comment 5 in our letter dated January 14, 2008.
You refer us to previously filed Forms 6-K which describe the underlying history
and reason for the $1 million write-off.  In future filings, as applicable, given the materiality of this situation, we believe that you should include, at a minimum, a
brief description of the f acts and circumstances that necessitated the write-off.
 Form 6-K filed November 20, 2007

4.   We have read your response to co mment 8.  We note that you assessed the
implied fair value of the Kwanta goodwill in 1996 and 1999 and found it to be nil.
We also note that Kwanta was dormant in September 2002.  Therefore it is
unclear to us why a goodwill impairment wa s not recorded earlier than the second
quarter of fiscal 2008.  Please advise.

*    *    *    *

As appropriate, please respond to these co mments within 10 business days or tell
us when you will provide us with a response.  Please furnish a letter that keys your
responses to our comments and provides any requested supplemental information.
Detailed response letters  greatly facilitate our  review.  Please file your response letter on
EDGAR.  Please understand that we may have additional comments after reviewing your
responses to our comments.
You may contact Jenn Do at  (202) 551-3743, or me at  (202) 551-3689 if you have
questions regarding these comments.

         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