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CORRESP
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July 12,
2005

VIA
Federal Express and EDGAR

Securities and
Exchange Commission

450 Fifth
Street, N.W.

Washington,
D.C.  20549

Attention:  Kevin Vaughn, Reviewing Accountant

Re:                               Zoran Corporation.

Comments on Form 10-K for the year ended December 31, 2004 and
related filings

File No. 000-27246

Dear Mr.
Vaughn:

Reference is
made to the letter, dated June 21, 2005, addressed to Mr. Karl Schneider,
Chief Financial Officer, of Zoran Corporation (the “Company”),
regarding the above-referenced filings.
Provided below are responses to each of the numbered comments.  Please note that the headings and numbers of
the responses set forth below correspond to the headings and numbers of the
comments contained in the letter.

Form 8-K dated January 25, 2005 and April 28,
2005

1.              We
note your response to prior comment 6.
We note that you do not consider charges for excess and obsolete
inventory, amortization of intangible assets and stock compensation expense to
be part of your “core operating results.”
However, these recurring charges appear to be an integral part of your
ongoing operations.  Revise your
disclosures to clearly state your basis for excluding these charges in your
non-GAAP measure.

The Company advises the Staff that the Company does not consider charges
for obsolete inventory to be an item which should be excluded from our core
operating results.  These charges were
not excluded in the non-GAAP measures previously
disclosed and we do not intend to exclude such charges in our future non-GAAP measures.  The
Company will expand its disclosure regarding the use of non-GAAP
financial measures to provide further basis for excluding charges related to
the amortization of intangible assets and deferred stock compensation as
follows:

“USE OF NON-GAAP
FINANCIAL INFORMATION: In addition to reporting
financial results in accordance with generally accepted accounting principles,
or GAAP, Zoran reports non-GAAP financial results.
Non-GAAP net income (loss) excludes amortization
of acquisition-related intangibles, amortization of deferred stock-based
compensation and in-process research and development expenses.

Non-GAAP net income (loss) gives an
indication of the Company’s baseline performance before gains, losses or other
charges that are considered by management to be outside of our core operating
results.  The Company believes that this
presentation of non-GAAP results of operations provides
useful information to management and investors regarding certain financial and
business trends relating to its financial condition and results of operations
as they exclude charges specifically related to acquisitions made by the
Company which we consider to be outside of our core operating results. The
Company believes when GAAP results of operations are
viewed in conjunction with non-GAAP results of
operations, investors are provided with a more meaningful understanding of the
Company’s ongoing operating performance.
In addition, the Company’s management uses these non-GAAP
measures for reviewing the financial results of the Company and for planning
and forecasting future periods.  These
measures are not in accordance with or an alternative for GAAP
financial statements and may be materially different from non-GAAP measures used by other companies.”

2.              We
note that you continue to present a non-GAAP
statement of operations.  Revise your
presentation to remove the non-GAAP statement of
operations and instead present each of your non-GAAP
measures individually.  Alternatively,
revise your proposed discussion to include all disclosures required by Item
10(e)(1)(i) of Regulation
S-K for each of these non-GAAP financial
measures.  Your disclosures should
address why each of these non-GAAP financial
measures provides useful information to investors regarding your financial condition
and results of information and how each measure is used by
management.  Please provide us with a
full sample of your proposed disclosures to be included in future filings.

In response to the Staff’s comment, the
Company will revise our previously proposed disclosure attached to our letter
dated June 13, 2005 to include all disclosures required by Item 10(e)(1)(i) of Regulation S-K for each of our non-GAAP financial measures.
Please see Exhibit A for a sample of our proposed disclosures to be
included in future filings.

Response Letter Filed June 13, 2005

3.               We note that you did not provide the three
acknowledgements in the form previously requested.  Accordingly, please provide all three
acknowledgements as previously requested in our letter dated April 29,
2005.

The Company acknowledges the following:

•                  The
Company is responsible for the adequacy and accuracy of the disclosure in the
filing;

•                  Staff
comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and

•                  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.

Please call me with any questions regarding this response at (408)
523-6500.

  Sincerely,

  /s/ Karl Schneider

  Karl Schneider

  Senior Vice President of Finance and Chief
  Financial Officer

Exhibit A

ZORAN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per
share data)

(unaudited)

  Three Months Ended

  March 31,

  2005

  2004

  Revenues:

  Hardware
  product revenues

  $

  59,002

  $

  68,029

  Software and
  other revenues

  14,882

  12,608

  Total
  revenues

  73,884

  80,637

  Costs and
  expenses:

  Cost of
  hardware product revenues

  36,964

  45,328

  Research and
  development

  20,100

  18,646

  Selling,
  general and administrative

  23,174

  14,817

  Amortization
  of intangibles

  12,330

  10,343

  Deferred stock
  compensation

  517

  1,827

  Total costs
  and expenses

  93,085

  90,961

  Operating
  loss

  (19,201

  )

  (10,324

  )

  Interest
  & other income, net

  405

  725

  Loss before
  income taxes

  (18,796

  )

  (9,599

  )

  Provision
  for income taxes

  —

  386

  Net loss

  $

  (18,796

  )

  $

  (9,985

  )

  Basic net
  loss per share

  $

  (0.43

  )

  $

  (0.23

  )

  Diluted net
  loss per share

  $

  (0.43

  )

  $

  (0.23

  )

  Shares used
  to compute basic net loss per share

  43,213

  42,522

  Shares used
  to compute diluted net loss per share

  43,213

  42,522

ZORAN CORPORATION

NON-GAAP CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per
share data)

(unaudited)

  Three Months Ended

  March 31,

  2005

  2004

  Revenues:

  Hardware
  product revenues

  $

  59,002

  $

  68,029

  Software and
  other revenues

  14,882

  12,608

  Total
  revenues

  73,884

  80,637

  Costs and
  expenses:

  Cost of
  hardware product revenues

  36,964

  45,328

  Research and
  development

  20,100

  18,646

  Selling,
  general and administrative

  23,174

  14,817

  Total costs
  and expenses

  80,238

  78,791

  Operating
  income (loss)

  (6,354

  )

  1,846

  Interest
  & other income, net

  405

  725

  Income
  (loss) before income taxes

  (5,949

  )

  2,571

  Provision
  for income taxes

  —

  386

  Net income
  (loss)

  $

  (5,949

  )

  $

  2,185

  Basic net
  income (loss) per share

  $

  (0.14

  )

  $

  0.05

  Diluted net
  income (loss) per share

  $

  (0.14

  )

  $

  0.05

  Shares used
  to compute basic net income (loss) per share

  43,213

  42,522

  Shares used
  to compute diluted net income (loss) per share

  43,213

  45,038

ZORAN CORPORATION

RECONCILIATION OF NON-GAAP TO GAAP RESULTS OF OPERATIONS

(in thousands)

(unaudited)

  Three Months Ended

  Three Months Ended

  March 31,

  March 31,

  2005

  2004

  As Reported

  (GAAP)

  Non-GAAP

  Adjustments

  Non-GAAP
  (a)

  As Reported

  (GAAP)

  Non-GAAP

  Adjustments

  Non-GAAP
  (a)

  Revenues:

  Hardware
  product revenues

  $

  59,002

  $

  59,002

  $

  68,029

  $

  68,029

  Software and
  other revenues

  14,882

  14,882

  12,608

  12,608

  Total
  revenues

  73,884

  73,884

  80,637

  80,637

  Costs and
  expenses:

  Cost of hardware
  product revenues

  36,964

  36,964

  45,328

  45,328

  Research and
  development

  20,100

  20,100

  18,646

  18,646

  Selling,
  general and administrative

  23,174

  23,174

  14,817

  14,817

  Amortization
  of intangibles

  12,330

  (12,330

  )(b)

  —

  10,343

  (10,343

  )(b)

  —

  Deferred
  stock compensation

  517

  (517

  )(c)

  —

  1,827

  (1,827

  )(c)

  —

  Total costs
  and expenses

  93,085

  80,238

  (a)

  90,961

  78,791

  (a)

  Operating
  income (loss)

  (19,201

  )

  (6,354

  )(a)

  (10,324

  )

  1,846

  (a)

  Interest
  & other income, net

  405

  405

  725

  725

  Income
  (loss) before income taxes

  (18,796

  )

  (5,949

  )(a)

  (9,599

  )

  2,571

  (a)

  Provision
  for income taxes

  —

  —

  386

  386

  Net income
  (loss)

  $

  (18,796

  )

  $

  (5,949

  )(a)

  $

  (9,985

  )

  $

  2,185

  (a)

  Basic net
  income (loss) per share

  $

  (0.43

  )

  $

  (0.14

  )(a)

  $

  (0.23

  )

  $

  0.05

  (a)

  Diluted net
  income (loss) per share

  $

  (0.43

  )

  $

  (0.14

  )(a)

  $

  (0.23

  )

  $

  0.05

  (a)

  Shares used
  to compute basic net income (loss) per share

  43,213

  43,213

  42,522

  42,522

  Shares used
  to compute diluted net income (loss) per share

  43,213

  43,213

  42,522

  45,038

(a) Non-GAAP
net income (loss) gives an indication of the Company’s baseline performance
before gains, losses or other charges that are considered by management to be
outside of our core operating results.
The Company believes that this presentation of non-GAAP
total costs and expenses, non-GAAP operating income
(loss), non-GAAP income (loss) before income taxes,
non-GAAP net income (loss) and non-GAAP net income (loss) per share provides useful
information to management and investors regarding certain financial and business
trends relating to its financial condition and results of operations as they
exclude charges specifically related to acquisitions made by the Company which
the Company considers to be outside its core operating results.  The Company believes when GAAP
results of operations are viewed in conjunction with non-GAAP
results of operations, investors are provided with a more meaningful
understanding of the Company’s ongoing operating performance.  In addition, the Company’s management uses these
measures for reviewing the financial results of the Company and for planning
and forecasting future periods.  These
measures are not in accordance with or an alternative for GAAP
financial statements and may be materially different from non-GAAP measures used by other companies.

(b) This adjustment reflects
the amortization of intangible assets for the three month periods ended March 31,
2005 and 2004 associated with the acquisitions of Oak Technology, Inc. in August 2003
and Emblaze Semiconductor in July 2004.
These acquired intangible assets are amortized over their estimated
useful lives.  Such amortization expense
does not impact the Company’s cash flows and is excluded by management when
evaluating our core operating results.  (see (a) above)

(c) This adjustment reflects
a deferred stock compensation charge related to the acquisition of Oak
Technology, Inc. in August 2003.
This deferred stock compensation charge does not impact the Company’s
ongoing cash flows and is excluded by management when evaluating our core
operating results. (see (a) above)

ZORAN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

  March 31,

  December 31,

  2005

  2004

  ASSETS

  Current
  assets:

  Cash and
  short-term investments

  $

  81,336

  $

  70,413

  Accounts
  receivable, net

  68,023

  59,863

  Inventory

  34,207

  50,033

  Prepaid
  expenses & other current assets

  17,995

  14,130

  Total
  current assets

  201,561

  194,439

  Property
  & equipment, net

  16,270

  17,190

  Other assets

  54,108

  68,619

  Intangible
  assets, net

  306,567

  319,033

  Total assets

  $

  578,506

  $

  599,281

  LIABILITIES
  AND STOCKHOLDERS’ EQUITY

  Current
  liabilities:

  Accounts
  payable

  $

  27,955

  $

  34,017

  Accrued
  expenses and other liabilities

  53,797

  51,102

  Total
  current liabilities

  81,752

  85,119

  Long term
  liabilities

  13,064

  13,535

  Stockholders’
  equity:

  Common stock

  43

  43

  Additional
  paid-in capital

  705,761

  705,661

  Deferred
  stock-based compensation

  (1,999

  )

  (2,791

  )

  Accumulated
  other comprehensive income

  2,505

  1,538

  Accumulated
  deficit

  (222,620

  )

  (203,824

  )

  Total
  stockholders’ equity

  483,690

  500,627

  Total
  liabilities and stockholders’ equity

  $

  578,506

  $

  599,281