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RESPONSE LETTER

GEMPLUS INTERNATIONAL S.A.

46a, avenue JF Kennedy

2nd floor

L-1855 Luxembourg

Grand Duchy of Luxembourg

October 13, 2005

Via Facsimile: +1 (202) 772-9205

UNITED STATES SECURITIES

AND EXCHANGE COMMISSION

Washington, D.C. 20549

Attention: Robert S. Littlepage, Jr.

    Re: Gemplus International S.A. (the “Company”)

Form 20-F for the fiscal year ended December 31, 2004

Filed June 30, 2005

File No. 000-31052

Dear Mr. Littlepage:

We are responding to the Staff of the Securities and Exchange Commission’s letter dated August 31,
2005, concerning the above-referenced filing. For your convenience, we have repeated the Staff’s
comments before each of our responses below.

2.2 (b) Associates, page F-7

Comment:

1. Please clarify what you mean by the disclosure on page F-7 where you state that your share of
post-acquisition movements in reserves of your associates is recognized in reserves, and tell us
how you addressed this in your US GAAP financial information.

Response:

The statement “our share of post-acquisition movements in reserves of our associates is recognized
in reserves” relates to those equity changes of our associates, other than those recognized in its
profit or loss, that are recognized directly in equity, i.e. currency translation adjustments. This
IFRS policy is in accordance with IAS 28.11. There is no difference between IFRS and US GAAP
related to this accounting.

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2.3 (b) Transactions and balances, page F-7

Comment:

2. Please explain further your disclosure on page F-7 where you state “translation differences on
non-monetary items, such as equities classified as available-for-sale financial assets, are
included in “Other comprehensive income” within shareholders’ equity” and tell us how you addressed
this in your US GAAP financial information.

Response:

Our disclosure, as referenced in the Staff’s comment relates to foreign exchange gains or losses on
available-for-sale financial assets being included in “other comprehensive income” within
shareholders’ equity, until the financial asset is derecognized, at which time the cumulative gain
or loss previously recognized in equity is recognized in profit or loss. AG 83 provides that the
gain or loss is recognized directly in equity under IAS 39, paragraph 55(b) including any related
foreign exchange component, for available-for-sale (“AFS”) financial assets that are not monetary
items under IAS 21 (for example, equity instruments). There is no difference in accounting
treatment under US GAAP that provides that changes in the value of a foreign currency denominated,
AFS security resulting from movements in exchange rates should be reported in the separate
component of shareholders’ equity, until realized.

The Company would propose to revise its future filings with the following:

“Foreign exchange gains or losses on non-monetary items, such as equities classified as
available-for-sale financial assets, are included in “other comprehensive income” within
shareholders’ equity, until the financial asset is derecognized, and such amounts are recognized in
profit and loss.”

2.5 Revenue recognition, page F-9

Comment:

3. We refer to your statement within the Business Overview section “Many chip card sales are
combined and priced or sold together with sales of these services and software for customers within
the applicable reporting segment, and therefore we do not separately report these sales.” For each
reporting segment, please describe to us in more detail the nature of these arrangements in which
you have chip card sales, software sales and service sales. In addition, explain to us your
consideration of EITF 00-21 and SOP 97-2 in accounting for these multiple deliverable revenue
arrangements under US GAAP.

Response:

The Company’s revenue recognition policies applied under IFRS result in no differences with US
GAAP.

Most of the Company’s product sales are related to chip card sales for which the Company provides
the software embedded in the microprocessor of the chip card. For such chip card sales sold in
each segment, the Company also regularly adds certain application software to the chip cards and
provides personalization services. As such, the “software” and data from personalization are
embedded within the finished chip card and shipped to the customer. Revenue on these normal type
production inventories is recognized upon shipment and the meeting of the other revenue recognition
criteria in SAB 104. The Company has no software service obligations to the customer with regard
to the operating system, application software or personalization data included in the product
sales, including no upgrades/enhancements, PCS or other services.

Our statement in the business overview section as referenced in the Staff’s comment above relates
mainly to these normal production inventory sales of chip card products in all segments.

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In certain other cases, the Company provides customized operating systems and chip cards in each
segment.

Where the operating system requires significant customization or configuration, accordingly it is
accounted for under SOP 81-1, as required by paragraph 7 of SOP 97-2. The completion of such
customization or configuration work can take up to six to twelve months, and is accounted for under
the percentage of completion method. An example of this type of arrangement would be the sale of
an “over-the-air-platform” system, which enables telecommunication operators to remotely manage the
SIM cards located in their customers’ handsets, i.e., update applications to provide new
functionality.

The chip card sales are not subject to contract accounting pursuant to paragraph 14 of SOP 81-1.
Revenue related to chip card sales is recognized when the chip cards are delivered and other
requirements of SAB 104 are met, based on the selling prices included in the contract with the
customer, that is also consistent with the prices charged by the Company to other customers for
sales of chip cards sold separately (e.g., not in conjunction with an operating system), as
discussed in the second paragraph of this response.

(a) Sales of goods, page F-9

Comment:

4. We note on page F-39 that you sell prepaid phone cards as part of your Telecommunications
segment. Please clarify for us whether you report this revenue gross as a principle or net as an
agent under US GAAP and explain to us your consideration of EITF 99-19 in making this
determination.

Response:

The Company does not purchase or sell telecommunication usage time. The Company sells prepaid
phone cards to telecommunication operators who have their own usage time loaded in the cards for
the subsequent sale to customers. The Company recognizes revenue gross, since the Company is not
acting in the capacity of an agent and the entire transaction is with the same counterparty. The
Company would propose to clarify this in its future filings.

(b) Sales of services, page F-9

Comment:

5. We note your statement “Revenues are recognized by reference to the stage of completion at the
balance sheet date, provided that the outcome of the contracts can be estimated reliably.” Please
explain to us and revise your filing to discuss how you determine the stage of completion under US
GAAP. If you use a percentage of completion method based on costs incurred to date over total
estimated costs, tell us why you believe this is more appropriate under US GAAP then some type of
output measure such as contract milestones or units of work completed.

Response:

The Company uses the percentage of completion method on contracts related to chip card operating
systems and for services, mainly relating to consulting and software development of applications to
be run on smart cards. Such software applications are developed to customer specifications and are
not sold to other customers. These developments involve mainly internal or external staff costs,
which are measured on the basis of time sheets.

The Company uses a percentage of completion method based on costs incurred to date (mainly staff
costs) over total estimated costs, because this method measures more reliably the percentage of
achievement than milestones or units of work completed.

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Milestone is more a tool used to invoice customers. Progress payments and advances received from
customers often do not reflect the services performed and the actual progress of a project.

In our view, units of work completed are more appropriate for a production process and are not
applicable to the development of personalized operating systems or applications.

2.8 Property, plant and equipment, page F-9

Comment:

6. We note from your disclosure on page F-10 that leases where the Company has substantially all
the risks and rewards of ownership are classified as finance leases. Please tell us in your
response letter whether the lease capitalization criteria under IFRS are identical to those
identified under paragraph 7 of SFAS 13. If not, explain to us in detail your consideration of the
differences in preparing your net income, balance sheet, and cash flow statement reconciliations
and revise your filing to discuss these differences.

Response:

The lease criteria under IFRS and US GAAP are similar but not identical. In accordance with IAS
17, the classification of a lease depends on the substance of a transaction rather than the form of
the contract. A lease should be classified as a finance lease if it transfers substantially all
the risks and rewards incidental to ownership. Paragraph 10 or IAS 17 lists some examples of
situations that would normally lead to the classification of a lease as a finance lease, including:

    a.

    the lease transfers ownership of the asset to the lessee by the end of the lease term;

    b.

    the lessee has the option to purchase the asset at a price that is expected to be
sufficiently lower than the fair value at the date the option becomes exercisable for it to
be reasonably certain, at the inception of the lease, that the option will be exercised;

    c.

    the lease term is for the major part of the economic life of the asset even if title is
not transferred;

    d.

    at the inception of the lease the present value of the minimum lease payments amounts
to at least substantially all of the fair value of the leased asset; and

    e.

    the leased assets are of such a specialized nature that only the lessee can use them
without major modifications.

The criteria under US GAAP are similar to the indicators above. A lease is considered a finance
lease under US GAAP if:

    1.

    the lease transfers ownership of the property to the lessee by the end of the lease
term;

    2.

    the lease contains a bargain purchase option;

    3.

    the lease term is equal to 75 percent or more of the estimated economic life of the
leased property. However, if the beginning of the lease term falls within the last 25
percent of the total estimated economic life of the leased property, including earlier
years of use, this criterion shall not be used for purposes of classifying the lease;

    4.

    the present value at the beginning of the lease term of the minimum lease payments,
excluding that portion of the payments representing executory costs such as insurance,
maintenance, and taxes to be paid by the lessor, including any profit thereon, equals or
exceeds 90 percent of the excess of the fair value of the leased property to the lessor at
the inception of the lease over any related investment tax credit retained by the lessor
and expected to be realized by him. However, if the beginning of the lease term falls
within the last 25 percent of the total estimated economic life of the leased property,
including earlier years of use, this criterion shall not be used for purposes of
classifying the lease.

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A comparison of the two requirements does result in assessment that the two standards are similar
with US GAAP being slightly more prescriptive. The Company recognizes that there are differences
between the two standards and thus analyses all leases under both FAS 13 and IAS 17 independently.
All of the Company’s leases, except as described in our response to comment 11 below, qualify for
accounting as operating leases under both FAS 13 and IAS 17.

The Company, in accordance with Form 20-F, does not reconcile the IAS 7 cash flow to US GAAP.

2.10 Impairment of assets, page F-10

Comment:

7. Please refer to SFAS No. 144 and explain to us any differences in your accounting for impairment
of long-lived assets under IFRS and US GAAP. Advise us of your consideration of SFAS 144 in
accounting for the asset impairments discussed in your Restructuring note on pages F-28 through
F-30 and revise to include the required disclosure of paragraph 26-c and 26-d of SFAS 144.

Response:

Differences between IFRS and US GAAP

SFAS 144 requires that a long-lived asset be written down to its fair value only when the future
gross cash flows expected to be generated by a long-lived asset from its use and expected
disposition are less than the carrying value of the long-lived asset and such carrying value is in
excess of its fair value. Under SFAS 144, an impairment loss may not be reversed if there is a
subsequent recovery in value.

IFRS requires impairment write-down of fixed assets when the asset’s carrying amount exceeds its
recoverable amount, regardless of whether future gross cash flows are insufficient to recover the
carrying value. The recoverable amount is the higher of an asset’s fair value less cost to sale
and value in use. Value in use is the present value of the future cash flows expected to be
obtained from the asset’s use. IFRS requires reversals of impairment losses if there is a
subsequent recovery in value.

Both US GAAP and IFRS require management to evaluate impairment indicators, and if such indicators
are present, for management to perform an impairment test on the related long-lived asset. The
Company evaluated impairment for all Held for Use fixed assets, under both IFRS and US GAAP,
resulting in no related impairments losses under IFRS or US GAAP being necessary, for each of the
three years ended December 31, 2004.

The Company evaluated impairment for all Held for Sale fixed assets, under both IFRS and US GAAP,
resulting in no differences in the evaluation of the impairment losses for each of the three years
ended December 31, 2004, except that the Company reversed an impairment loss under IFRS in 2003,
amounting to € 2,555 thousand, which has not been recognized under US GAAP.

In accordance with SFAS 144 a long-lived asset to be disposed of by sale must be recorded at the
lower of carrying amount or fair value less cost to sell. Costs to sell a long-lived asset include
incremental direct costs to transact the sale and represent the costs that result directly from and
are essential to a sale transaction that would not have been incurred by the entity had the
decision to sell not been made.

Prior to the codification of IFRS 5, IAS 35 prescribed the authoritative guidance for accounting
for impairment losses recognized as a result of the discontinuance of an activity. IAS 35 states
that an announcement of a plan of disposal is an indication that the assets attributable to the
disposal transaction may be impaired or that a previously impairment loss may need to be reversed.
Impairment is tested using the same methodology as described in the previous paragraphs for IFRS.

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Both IFRS and US GAAP require that the fair value of the asset is reduced for estimated selling
costs directly attributable to the transaction. Previously recognized impairment losses on assets
held for sale, however, are required to be reversed in accordance with IFRS while this is not
allowed under US GAAP. The Company has historically evaluated its assets held for sale under both
methodologies which resulted in no reconciling items, except for those items related to