SecProbe.io

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corresp

July 28, 2005

VIA FEDERAL EXPRESS AND EDGAR

Securities and Exchange Commission

100 F Street N.E.

Washington, D.C. 20549-7561

Attention: Michele Gohlke, Branch Chief

    Re:

    Silicon Image, Inc.

    Form 10-K for the year ended December 31, 2004

    Form 8-K dated April 21, 2005

    Form 8-K dated January 25, 2005

Dear Ms. Gohlke:

     Reference is made to the letter, dated May 24, 2005, of the staff (the “Staff”) of the
Securities and Exchange Commission (the “Commission”) addressed to Silicon Image, Inc. (the
“Company”), regarding the above-referenced filings. Provided below are responses to each
of the numbered comments of the Staff. 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 of
the Staff.

Form 8-K dated April 21, 2005

    1.

    We note that your response to our prior comment 5 and see that you have deleted the pro forma
statement of operations. However, we note you continue to include a discussion of pro forma
net income and pro forma net income per share. Since you have retained certain non-GAAP
measures you must provide statements disclosing the reasons why management believes
presentation of each of the individual non-GAAP measures provide useful information to
investors regarding your financial condition and results of operations. Those disclosures
should be specific and substantative to each measure. Revise your Forms 8-K
in future periods to provide all of the disclosures required by Item 10(e)(1)(i) for each
non-GAAP measure presented. See also Question 8 of the FAQ Regarding the Use of Non-GAAP
Financial Measures, dated June 13, 2003. Please provide us with a full sample of your
proposed disclosure.

     We have supplementally attached, for the Staff’s review, a sample template of the Company’s
proposed disclosure to be used as a basis for its press release announcing the Company’s financial
results for the quarter ended June 30, 2005, which will be furnished to the

Securities and Exchange Commission

July 28, 2005

Page 2

SEC as an exhibit to a Form 8-K. Please note that this sample template includes non-GAAP
supplemental financial information, and includes additional specific and substantive disclosure
related to non-GAAP net income and net income per share, and to each non-GAAP measure included in
the non-GAAP supplemental financial information in compliance with Item 10(e)(1)(i). These
disclosures are set forth in both (1) the notes following the table under the caption
“Reconciliation of GAAP to Non-GAAP Net Income” and (2) the notes following the table under the
caption “Non-GAAP Supplemental Financial Information.”

    2.

    Further, we note that you refer to your non-GAAP information as “pro forma” results. The pro
forma terminology has very specific meaning in accounting literature, as indicated by Article
11 of Regulation S-X. Please revise your presentation in future filings to omit the pro forma
terminology when referring to your non-GAAP information.

     The sample earnings press release template attached hereto eliminates the term “pro forma”
when referring to non-GAAP information. Additionally, the Company will revise its presentation in
future filings to omit the term “pro forma” when referring to non-GAAP information.

* * *

     Should the Staff have additional questions or comments regarding the foregoing, please do not
hesitate to contact the undersigned at (415) 875-2455.

    Very truly yours,

/s/ David K. Michaels

David K. Michaels

Enclosures

    cc:

    Darrel Slack, Silicon Image, Inc.

    Patrick Reutens, Esq., Silicon Image, Inc.

    Andrew Y. Luh, Esq., Fenwick & West LLP

    CONTACTS:

    [CHIEF FINANCIAL OFFICER]

    [INVESTOR RELATIONS]

    SILICON IMAGE, INC.

    SILICON IMAGE, INC.

SILICON IMAGE REPORTS [SECOND QUARTER 2005] FINANCIAL RESULTS

[Language describing quarterly financial results]

* Note Regarding Non-GAAP Financial Information

The non-GAAP financial information set forth in this press release is presented for informational
purposes only. Our presentation of non-GAAP financial information excludes stock compensation
expense and amortization of intangible assets. It also excludes patent assertion costs and gains
(losses) on equity investments, which are not directly attributable to our ongoing operations and
are expected to be non-recurring or to be incurred over a limited
period of time. We believe that the exclusion of these items can help
investors better understand our underlying operating performance.
Additionally, items such as these mentioned above have the potential to distort
our ability to provide a meaningful comparison of financial results across reporting periods. For
these reasons, management does not evaluate these items when assessing the performance of our
ongoing operations or when allocating resources.

About Silicon Image

[Information about Silicon Image, Inc.]

Safe Harbor Statement

[Appropriate Safe Harbor Language]

SILICON IMAGE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (GAAP BASIS)

    Three Months Ended

    Six Months Ended

    (unaudited)

    (unaudited)

    June 30,

    March 31,

    June 30,

    June 30,

    June 30,

    (In thousands, except per share amounts)

    2005

    2005

    2004

    2005

    2004

    Revenue:

    Product
Development, licensing and royalties

    Total revenue

    Cost of revenue and operating expenses:

    Cost of revenue (1)

    Research and development (2)

    Selling, general and administrative (3)

    Amortization of intangible assets

    Patent assertion costs

    In-process research and development

    Total cost of revenue and operating expenses

    Loss from operations

    Interest income and other, net

    Gain (loss) on equity investment

    Loss before provision for income taxes

    Provision for income taxes

    Net income (loss)

    Net loss per share — basic

    Net loss per share — diluted

    Weighted average shares — basic

    Weighted average shares — diluted

    (1)

    Includes stock compensation expense (benefit) of ___, ___, ___, ___and ___for the three months ended June
30, 2005, March 31, 2005 and June 30, 2004 and the six months ended June 30, 2005 and June 30, 2004,
respectively.

    (2)

    Includes stock compensation expense (benefit) of ___, ___, ___, ___and ___for the three months ended June
30, 2005, March 31, 2005 and June 30, 2004 and the six months ended June 30, 2005 and June 30, 2004,
respectively.

    (3)

    Includes stock compensation expense (benefit) of ___, ___, ___, ___and ___for the three months ended June
30, 2005, March 31, 2005 and June 30, 2004 and the six months ended June 30, 2005 and June 30, 2004,
respectively.

2

SILICON IMAGE, INC.

RECONCILIATION OF GAAP TO NON-GAAP NET INCOME

    Three Months Ended

    Six Months Ended

    (unaudited)

    (unaudited)

    June 30,

    March 31,

    June 30,

    June 30,

    June 30,

    (In thousands)

    2005

    2005

    2004

    2005

    2004

    GAAP net income (loss):

    Adjustments:

    Stock compensation expense (benefit) applicable to
cost of revenue (1)

    Stock compensation expense (benefit) applicable to
research and development (1)

    Stock compensation expense (benefit) applicable to
selling, general and administrative (1)

    Total stock compensation expense (benefit) (1)

    Amortization of goodwill and intangible assets (2)

    Patent assertion costs (3)

    Loss (gain) on equity investment, net of tax (4)

    Non-GAAP net income (loss)

    (1)

    This adjustment represents expenses (benefit) associated with stock option modifications,
including repricings, and certain stock options issued to employees of acquired companies and to
non-employees in exchange for services. Stock-based compensation expense (benefit) fluctuates based
in large part on changes in our stock price.

    (2)

    This adjustment represents expenses for the amortization of goodwill and intangible assets
recorded in connection with our acquisitions. These ongoing expenses pertain to intangible assets
that are not expected to be replaced when fully amortized, as might a depreciable tangible asset.

    (3)

    This adjustment represents expenses incurred to assert our patents in a pending lawsuit will be
incurred over a limited period of time and are not directly attributable to our ongoing business
operations. We believe these expenses may vary based on events that are unrelated to our ongoing
business operations.

    (4)

    This loss (gain) relates to warrants and stock received by the company from a transaction
involving the licensing of certain of our intellectual property. These gains or losses are
infrequent and unusual, and reflect market and other conditions that are unrelated to our ongoing
business operations.

3

NON-GAAP SUPPLEMENTAL FINANCIAL INFORMATION

The non-GAAP financial information set forth in this press release is presented for
informational purposes only. Our presentation of non-GAAP financial information excludes stock
compensation expense and amortization of intangible assets. It also excludes patent assertion costs
and gains (losses) on equity investments, which are not directly attributable to our ongoing
operations and are expected to be non-recurring or to be incurred
over a limited period of time. We believe that the exclusion of these
items can help investors better understand our underlying operating
performance. Additionally, items such as these mentioned above have the potential to distort
our ability to provide a meaningful comparison of financial results across reporting periods. For
these reasons, management does not evaluate these items when assessing the performance of our
ongoing operations or when allocating resources. Because of these exclusions, the following
presentation is not in accordance with Generally Accepted Accounting Principles (GAAP). A
discussion of the reasons that management believes that the exclusion of these items provides
useful information to investors is set forth in the notes to the table under the caption
“Reconciliation of GAAP to Non-GAAP Net Income” and in the notes to the table below.

    Three Months Ended

    Six Months Ended

    (unaudited)

    (unaudited)

    June 30,

    March 31,

    June 30,

    June 30,

    June 30,

    (In thousands, except per share amounts)

    2005

    2005

    2004

    2005

    2004

    Revenue:

    Product

    Development, licensing and royalties

    Total revenue

    Non-GAAP
cost and operating expenses:

    Non-GAAP cost of revenue (1)

    Non-GAAP research and development (2)

    Non-GAAP selling, general and administrative (3)

    Non-GAAP total cost of revenue and operating
expenses (4)

    Non-GAAP income (loss) from operations (5)

    Interest income and other, net

    Provision for income taxes

    Non-GAAP net income (6)

    Non-GAAP net income per share — diluted (6)

    Weighted average shares*

    *

    Weighted average shares include weighted average shares outstanding during the period, as well as the
dilutive effect of outstanding stock options as if they had been converted to shares during the period in
accordance with the treasury stock method.

4

    1.

    Our management believes that non-GAAP cost of revenue provides useful supplemental
information regarding the company’s business operations. Management believes this non-GAAP
measure facilitates comparisons to our historical and ongoing operating results. Management
also internally uses this non-GAAP measure for forecasting and budgeting purposes. The
following table reconciles GAAP cost of revenue to non-GAAP cost of revenue for the periods
presented below:

    Three Months Ended

    Six Months Ended

    (unaudited)

    (unaudited)

    June 30,

    March 31,

    June 30,

    June 30,

    June 30,

    (In thousands)

    2005

    2005

    2004

    2005

    2004

    GAAP Cost of Revenue

Adjustments:

    Stock compensation expense (benefit)

    Non-GAAP Cost of Revenue

    2.

    Our management believes that non-GAAP research and development expense provides useful
supplemental information regarding the company’s business operations. Management believes
this non-GAAP measure facilitates comparisons to our historical and ongoing operating
results. Management also internally uses this non-GAAP measure for forecasting and budgeting
purposes. The following table reconciles GAAP research and development expense to non-GAAP
research and development expense for the periods presented below:

    Three Months Ended

    Six Months Ended

    (unaudited)

    (unaudited)

    June 30,

    March 31,

    June 30,

    June 30,

    June 30,

    (In thousands)

    2005

    2005

    2004

    2005

    2004

    GAAP Research and Development Expense

Adjustments:

    Stock compensation expense (benefit)

    Non-GAAP Research and Development Expense

    3.

    Our management believes that non-GAAP selling, general and administrative expense provides
useful supplemental information regarding the company’s business operations. Management
believes this non-GAAP measure facilitates comparisons to our historical and ongoing
operating results. Management also internally uses this non-GAAP measure for forecasting and
budgeting purposes. The following table reconciles GAAP selling, general and administrative
expense to non-GAAP selling, general and administrative expense for the periods presented
below:

    Three Months Ended

    Six Months Ended

    (unaudited)

    (unaudited)

    June 30,

    March 31,

    June 30,

    June 30,

    June 30,

    (In thousands)

    2005

    2005

    2004

    2005

    2004

    GAAP
Selling, General and Administrative Expense

Adjustments:

    Stock compensation expense (benefit)

    Non-GAAP
Selling, General and Administrative Expense

    4.

    Our management believes that non-GAAP total cost of revenue and operating expenses provides
useful supplemental information regarding the company’s business operations. Management
believes this non-GAAP measure facilitates comparisons to our historical and ongoing
operating results. Management also internally uses this non-GAAP measure for forecasting and
budgeting purposes. The following table reconciles GAAP total cost of revenue and operating
expenses to non-GAAP total cost of revenue and operating expenses for the periods presented
below:

    Three Months Ended

    Six Months Ended

    (unaudited)

    (unaudited)

    June 30,

    March 31,

    June 30,

    June 30,

    June 30,

    (In thousands)

    2005

    2005

    2004

    2005

    2004

    GAAP Total Cost of Revenue and Operating
Expenses

    Adjustments:

    Stock compensation expense (benefit)

    Amortization of goodwill and intangible assets

    Patent assertion costs

    Non-GAAP Total Cost of Revenue and Operating
Expenses

    5.

    Our management believes that non-GAAP income (loss) from operations provides useful
supplemental information regarding the company’s business operations. Management believes
this non-GAAP measure facilitates comparisons to our historical and ongoing operating
results. Management also internally uses this non-GAAP measure for forecasting and budgeting
purposes. The following table reconciles GAAP income (loss) from operations to non-GAAP
income (loss) from operations for the periods presented below:

    Three Months Ended

    Six Months Ended

    (unaudited)

    (unaudited)

    June 30,

    March 31,

    June 30,

    June 30,

    June 30,

    (In thousands)

    2005

    2005

    2004

    2005

    2004

    GAAP Income (Loss) from Operations

    Adjustments:

    Stock compensation expense (benefit)

    Amortization of goodwill and intangible assets

    Patent assertion costs

    Non-GAAP Income (Loss)