SecProbe.io

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 May 19, 2025

Herman Wong
Chief Financial Officer
Deswell Industries, Inc.
10B, Edificio Associacao Industrial De Macau
32 Rua do Comandante Mata e Oliveria, Macao
Special Administrative Region, PRC

 Re: Deswell Industries, Inc.
 Form 20-F for Fiscal Year Ended March 31, 2024
 File No. 001-33900
Dear Herman Wong:

 We have completed our review of your filing. We remind you that the
company and
its management are responsible for the accuracy and adequacy of their
disclosures,
notwithstanding any review, comments, action or absence of action by the staff.

 Sincerely,

 Division of Corporation
Finance
 Office of Industrial
Applications and
 Services
cc: Carrie Leahy, Esq.
</TEXT>
</DOCUMENT>

CORRESP
 1
 filename1.htm

 May 12, 2025

 United States Securities and Exchange Commission

 Division of Corporation Finance

 100 F Street, N.E.

 Washington, D.C. 20549

 Attention:
 Ms. Jeanne Baker
Mr. Al Pavot
Mr. Nicholas O'Leary
Mr. Conlon Danberg

 Re: Deswell Industries Inc.
Form 20-F filed August 9, 2024
File No. 001-33900

 Dear Ladies and Gentlemen:

 On behalf of our client, Deswell
Industries Inc., a company organized under the laws of the British Virgin Islands (the " Company "), we respond to the
comments contained in the letter from the staff (the " Staff ") of the Securities and Exchange Commission (the " Commission ")
dated May 5, 2025 (the " Comment Letter "), relating to the Company's annual report on Form 20-F for the fiscal
year ended March 31, 2024 filed with the Commission on August 9, 2024 (the " Annual Report ").

 Set forth below are the Company's
responses to the Staff's comments in the Comment Letter. For your convenience, each comment is reproduced in bold-face type below,
followed by the Company's response.

 Annual Report on Form 20-F For Fiscal
Year Ended March 31, 2024

 Summary of Risk Factors, page 6

 1. We note your proposed revisions in response to prior comment 8. We reissue the comment in part. In
your future filings in your summary of risk factors, please describe the significant regulatory and enforcement risks. For example, specifically
discuss risks arising from the legal system in China, including risks and uncertainties regarding the enforcement of laws and that rules
and regulations in China can change quickly with little advance notice. We note your proposed disclosure that the Chinese government may
intervene or influence your operations and offerings conducted overseas. Please acknowledge the risks by the Chinese government to also
exert more oversight and control over those operations and offerings conducted overseas and/or by foreign investment in China-based issuers.

 Response: In response to the Staff's
comment, the Company respectfully proposes to revise the disclosure in its future filings on Form 20-F (with strikethroughs and underlines
showing the changes against the disclosure in the Annual Report) as follows:

 May 12, 2025 Page 2

 Part I, Item 3. Key Information, Summary of Risk Factors, page
6

 · "T he enforcement of laws and rules and
regulations in China can change quickly with little advance notice. Additionally, the PRC laws and regulations and the enforcement of
those that apply or are to be applied to Hong Kong or Macao can change quickly with little or no advance notice.

 · The Chinese government may exert more oversight
and/or control over our operations in China and Macao, or our holdings in Hong Kong, and in offerings conducted overseas by, and/or foreign
investment in, China-based issuers like us. "

 General

 2. In your future filings in your Enforceability of Civil Liabilities section, please also include a discussion
of any limitations on investors being able to effect service of process and enforce civil liabilities in the British Virgin Islands.

 Response: In response to the Staff's
comment, the Company respectfully proposes to revise the disclosure in its future filings on Form 20-F (with strikethroughs and underlines
showing the changes against the disclosure in the Annual Report) as follows:

 Part I, Item 3. Key Information, page 5

 " Enforceability of Civil Liabilities

 We are incorporated under the laws of the BVI.
As a result, it may be difficult or impossible to effect service of process on Deswell within the United States or to recover on judgments
rendered by United States courts against us. There is currently no arrangement providing for the reciprocal enforcement of judgements
between the BVI and the United States. A judgment obtained in United States federal or state courts under which a definite sum of money
is payable as compensatory damages may be brought as a separate cause of action to collect a debt in the BVI. The judgment for which enforcement
is sought must be final and conclusive and from a foreign court of competent jurisdiction. This means enforcing a judgment rendered by
United States courts in the BVI will require a separate cause of action in the BVI, which will lead to additional expenses and delays
for the party seeking to enforcement a judgment against us. As a result, there is uncertainty as to the enforceability in the BVI of judgments
rendered against us by United States courts. "

 If you have further questions
or comments regarding, or require further information or clarification of, any of the responses provide in this letter, please contact
me at cleahy@bodmanlaw.com, 734-930-0120.

 Very truly yours,

 /s/ Carrie Leahy

 Carrie Leahy

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 May 5, 2025

Herman Wong
Chief Financial Officer
Deswell Industries, Inc.
10B, Edificio Associacao Industrial De Macau
32 Rua do Comandante Mata e Oliveria, Macao
Special Administrative Region, PRC

 Re: Deswell Industries, Inc.
 Form 20-F for Fiscal Year Ended March 31, 2024
 Response dated April 21, 2025
 File No. 001-33900
Dear Herman Wong:

 We have reviewed your April 21, 2025 response to our comment letter and
have the
following comments.

 Please respond to this letter within ten business days by providing the
requested
information or advise us as soon as possible when you will respond. If you do
not believe a
comment applies to your facts and circumstances, please tell us why in your
response.

 After reviewing your response to this letter, we may have additional
comments.
Unless we note otherwise, any references to prior comments are to comments in
our March
13, 2025, letter.

Annual Report on Form 20-F For Fiscal Year Ended March 31, 2024
Summary of Risk Factors, page 6

1. We note your proposed revisions in response to prior comment 8. We
reissue the
 comment in part. In your future filings in your summary of risk factors,
please
 describe the significant regulatory and enforcement risks. For example,
specifically
 discuss risks arising from the legal system in China, including risks
and uncertainties
 regarding the enforcement of laws and that rules and regulations in
China can change
 quickly with little advance notice. We note your proposed disclosure
that the Chinese
 government may intervene or influence your operations and offerings
conducted
 overseas. Please acknowledge the risks by the Chinese government to also
exert more
 oversight and control over those operations and offerings conducted
overseas and/or
 by foreign investment in China-based issuers.
 May 5, 2025
Page 2

General

2. In your future filings in your Enforceability of Civil Liabilities
section, please also
 include a discussion of any limitations on investors being able to
effect service of
 process and enforce civil liabilities in the British Virgin Islands.
 Please contact Jeanne Baker at 202-551-3691 or Al Pavot at 202-551-3738
if you
have questions regarding comments on the financial statements and related
matters. Please
contact Nicholas O'Leary at 202-551-4451 or Conlon Danberg at 202-551-4466 with
any
other questions.

 Sincerely,

 Division of
Corporation Finance
 Office of
Industrial Applications and
 Services
cc: Carrie Leahy, Esq.
</TEXT>
</DOCUMENT>

CORRESP
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 filename1.htm

 April 21, 2025
 United States Securities and Exchange Commission

 Division of Corporation Finance

 100 F Street, N.E.

 Washington, D.C. 20549

 Attention:
 Ms. Jeanne Baker

 Mr. Al Pavot

 Mr. Nicholas O'Leary

 Mr. Conlon Danberg

 Re: Deswell Industries Inc.
Form 20-F filed August 9, 2024
File No. 001-33900

 Dear Ladies and Gentlemen:

 On behalf of our client,
Deswell Industries Inc., a company organized under the laws of the British Virgin Islands (the " Company "), we respond
to the comments contained in the letter from the staff (the " Staff ") of the Securities and Exchange Commission (the
" Commission ") dated March 13, 2025 (the " Comment Letter "), relating to the Company's annual
report on Form 20-F for the fiscal year ended March 31, 2024 filed with the Commission on August 9, 2024 (the " Annual Report ").

 Set forth below are the Company's
responses to the Staff's comments in the Comment Letter. For your convenience, each comment is reproduced in bold-face type below,
followed by the Company's response.

 Annual Report on Form 20-F filed
August 9, 2024

 Introduction, page 3

 1. We note that your definition of "China" or "PRC" excludes Hong Kong and Macao.
In your future filings, please clarify that the legal and operational risks associated with your operating in China also apply to your
operations in Hong Kong and Macao.

 Response: In response to the Staff's
comment, the Company respectfully proposes to revise the disclosure in its future filings on Form 20-F (with strikethroughs and underlines
showing the changes against the disclosure in the Annual Report) as follows:

 DETROIT | TROY | ANN ARBOR | CHEBOYGAN | GRAND RAPIDS

 April 21, 2025 Page 2

 Part I, Item 3. Key Information, page 4
 " Our Holding Company Structure

 Deswell
was incorporated in the British Virgin Islands on December 2, 1993. Deswell is not an operating company but rather a holding company
conducting its operations through Deswell's subsidiaries, primarily in Macao and mainland China. This structure involves unique
risks to investors and you may never directly hold equity interests in Deswell's operating entities. You are specifically cautioned
that there are significant legal and operational risks associated with being based in or having the majority of operations in China. The
legal and operational risks associated with being based in and having operations in mainland China also apply to our operations in Macao
and our holdings in Hong Kong. Recently, the PRC government initiated a series of regulatory actions and made a number of public statements
on the regulation of business operations in China, including cracking down on illegal activities in the securities market, enhancing supervision
over China-based companies listed overseas using a Variable Interest Entity structure, adopting new measures to extend the scope
of cybersecurity reviews, and expanding efforts in anti-monopoly enforcement. We do not believe that our subsidiaries in Macao or
mainland China are directly subject to these regulatory actions or statements, as we have not carried out any monopolistic behavior and
our business does not involve the collection of personal information or implicate national security. However, since these statements and
regulatory actions by the PRC government are newly published and detailed official guidance and related implementation rules have not
been issued or taken effect, uncertainties exist as to how soon the regulatory bodies in China will finalize implementation measures,
and the impacts the modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments
and list the Company's securities on an U.S. or other foreign exchange. For a detailed description of risks relating to doing
business in China, see "ITEM 3. Key Information - Risk Factors - Risks Related to Doing Business
in China…""

 Part I

 Item 3. Key Information, page
4

 2. In your future filings, please clearly disclose which subsidiaries or entities are conducting your
business operations and which are holding companies. Additionally, please note which operating subsidiaries are conducting business operations
in China, Hong Kong or Macao.

 Response: In response to the Staff's
comment, the Company respectfully proposes to revise the disclosure in its future filings on Form 20-F (with strikethroughs and underlines
showing the changes against the disclosure in the Annual Report) as follows:

 April 21, 2025 Page 3

 Part
I, Item 3. Key Information, page 4

 " Our Holding Company Structure

 Insert after the
first paragraph…

 Deswell is
a holding company and its principal administrative office is located in Macao. Our primary manufacturing operations are conducted in China
through our subsidiaries, Jetcrown Industrial (Dongguan) Limited, and Dongguan Kwan Hong Electronics Co. Ltd., both of which are located
in Dongguan, China. We conduct trading operations in Macao through our subsidiaries, Kwanasia Electronics (Macao Commercial Offshore)
Ltd. and Jetcrown Industrial (Macao Commercial Offshore) Limited. Our operating subsidiaries are directly owned by intermediate holding
companies located in the BVI and Samoa. Our intermediate holding companies in the BVI include Ideatop Holdings Ltd., Blue Collar Holdings
Ltd., Joint Harvest Industries Ltd., Star Peace Ltd. and Rainbow Hill Ltd. Our intermediate holding company in Samoa is Integrated International
Ltd.. We do not currently have operations in Hong Kong.

 The following diagram illustrates the organizational structure of the
Company and its active subsidiaries at March 31, 2024.

 April 21, 2025 Page 4

 "

 3. In your future filings, please also provide early in the Key Information section the diagram of the
company's corporate structure currently included under the Information About the Company section on page 31.

 Response: In response to the Staff's comment, the
Company respectfully refers to its response to Comment 2 above.

 4. Please disclose the location of your auditor's headquarters.

 Response: In response to the
Staff's comment, the Company respectfully proposes to revise the disclosure in its future filings on Form 20-F (with strikethroughs
and underlines showing the changes against the disclosure in the Annual Report) as follows:

 April 21, 2025 Page 5

 Part I, Item 3. Key Information, page 4

 "The Holding Foreign Companies Accountable
Act

 The Holding Foreign Companies
Accountable Act (the "HFCAA") enacted in 2020, provides that if the auditor of a U.S. listed company's financial
statements is not subject to Public Company Accounting Oversight Board (the "PCAOB") inspections for three consecutive "non-inspection" years,
the Securities and Exchange Commission (the "SEC") is required to prohibit the securities of such issuer from being traded
on a U.S. national securities exchange, such as NYSE and Nasdaq, or in U.S. over-the-counter markets. On December 29,
2022, U.S. Congress passed and the President of the United Stated signed into law the Consolidated Appropriations Act, 2023, which
among other things, amends the HFCAA to shorten the timeframe from three consecutive "non-inspection" years to two consecutive
"non-inspection" years. On December 16, 2021, the PCAOB issued a report to notify the SEC of its determinations
that it is unable to completely inspect or investigate registered public accounting firms headquartered in Mainland China, and identified
the registered public accounting firms in Mainland China that are subject to such determinations. Our auditor, BDO China Shu Lun Pan Certified
Public Accountants LLP, a registered public accounting firm headquartered in Shanghai, China , was identified at that time. On August 29,
2022, we were conclusively listed by the SEC as a "Commission-Identified Issuer" under the HFCAA as having filed audit
reports issued by a registered public accounting firm that could not be inspected or investigated completely by the PCAOB in connection
with the filing of our annual report on Form 20-F for the fiscal year ended March 31, 2022. On December 15, 2022,
the PCAOB issued a report vacating its December 16, 2021 determination and removing Mainland China and Hong Kong from the list
of jurisdictions where it is unable to completely inspect or investigate registered public accounting firms, and a statement released
from the Chairman of the PCAOB stated that the PCAOB has secured complete access to inspect and investigate such registered public accounting
firms headquartered in Mainland China and Hong Kong."

 5. We note your risk factor disclosure on page 22 that states "Deswell and our PRC subsidiaries
(i) are not required to obtain permissions from the China Securities Regulatory Commission, or the CSRC, (ii) are not required to go through
cybersecurity review by the Cyberspace Administration of China, or the CAC, and (iii) have not been asked to obtain or were denied such
permissions by any PRC authority." In your future filings, please disclose here in the Key Information section more prominently
whether you relied on counsel in determining you are not required to obtain permissions from or complete filings with the CAC and CSRC,
and if you did, name your PRC counsel. If you did not rely on counsel, please revise to discuss how you came to that conclusion and explain
why you did not need to consult with counsel in that instance. Additionally, please describe the consequences to you and your investors
if you or your subsidiaries: (i) do not receive or maintain such permissions or approvals, (ii) inadvertently conclude that such permissions
or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and you are required to obtain such permissions
or approvals in the future. Additionally, please update your risk factor disclosure accordingly.

 April 21, 2025 Page 6

 Response: In response to the Staff's
comment, the Company respectfully proposes to revise the disclosure in its future filings on Form 20-F (with strikethroughs and strikethroughs
and underlines showing the changes against the disclosure in the Annual Report) as follows:

 Part I, Item 3. Key Information, page 5

 " Permissions and Licenses Required
from the PRC government for Our Operations and Overseas Securities Offerings

 We are required
to obtain certain licenses and permits from relevant governmental authorities in China in order to operate our business, including business
certificates, plants safety certificates and pollutant discharge permits. As of the date of this annual report, our subsidiaries in China
have obtained business licenses from the PRC government authorities necessary for our business operations in China. We have not relied
upon the opinion of PRC counsel in reaching these conclusions and have instead conducted our own analysis of the PRC laws as applied to
our operations. We have not been asked to obtain any licenses or approvals from the Cyberspace Administration of China (the "CAC")
or the China Securities Regulatory Commission (the "CSRC"). We may be required to obtain additional licenses, permits, registrations,
or approvals for our business operations in the future. We cannot assure you that we or our subsidiaries will be able to obtain, in a
timely manner or at all, or maintain such licenses, permits or approvals, and we or our subsidiaries may also inadvertently conclude that
such permissions or approvals are not required. Any lack of or failure to maintain requisite approvals, licenses or permits applicable
to us or our subsidiaries may have a material adverse impact on our business, results of operations, financial condition and prospects
and cause the value of any securities we offer to significantly decline or become worthless. If we fail to obtain or renew any of these
approvals, licenses, permits or certifications, it could materially and adversely affect our business and results of operations.

 On December
28, 2021, the CAC and other PRC regulatory authorities implemented the Measures for Cybersecurity Review, which became effective
on February 15, 2022. According to the Measures for Cybersecurity Review, operators of critical information infrastructure purchasing
network products and services, and data processors carrying out data processing activities that affect or may affect China's national
security, are required to conduct a cybersecurity review. Operators, including operators of critical information infrastructure and data
processors, who control more than 1 million users' personal information must report to the Cyber Security Review Office for a cybersecurity
review if it intends to be listed in a foreign country. Companies seeking to list their securities on foreign exchanges may be subject
to increased scrutiny by the CAC under the Measures for Cybersecurity Review.

 April 21, 2025 Page 7

 We do not
believe that our PRC subsidiaries are engaged in the operation of critical information infrastructure and data processors, and we do not
control personal information for more than 1 million users. Accordingly, we do not believe that the Measures for Cybersecurity Review
apply to us or our PRC subsidiaries. We cannot assure you that PRC regulatory agencies, including the CAC, would take the same view as
we do, and we cannot assure you that we can fully or timely comply with such legal or regulatory requirements. If we become subject to
cybersecurity inspection and/or review by the CAC or other PRC authorities or are required by them to take any specific actions, it could
cause disruptions to our operations, result in negative publicity regarding our company, and divert our managerial and financial resources.
We may also be subject to significant fines or other penalties, which could materially and adversely affect our business, financial condition
and results of operations.

 On February
17, 2023, the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies
(the "Overseas Listing Trial Measures"), which became effective on March 31, 2023. According to the Overseas Listing
Trial Measures, PRC domestic companies that seek to offer and list securities in overseas markets, directly or indirectly, are required
to comply with CSRC filing procedures.

 Deswell is
incorporated under the laws of the BVI, but our PRC subsidiaries are incorporated under the laws of China. The Overseas Listing Trial
Measures, as currently written, will deem an offering by Deswell of its securities as an indirect offering by our PRC subsidiaries if:
(1) 50% or more of our operating revenue, total profit, total assets or net assets, as documented in our audited consolidated financial
statements for the most recent fiscal year, are accounted for by the PRC subsidiaries; and (2) our main business activities are conducted
in China, or our main place of business is located in China, or the majority of senior management staff in charge of our business operations
and management are PRC citizens or have their usual place of residence located in China.

 April 21, 2025 Page 8

 The CSRC clarified
at a press conference that existing domestic companies that have completed overseas offerings before March 31, 2023, such as us, shall
not be required to perform filing procedures for the completed overseas securities issuance and listing. However, any of our subsequent
securities offering in the same overseas market or subsequent securities offering and listing in other overseas markets may be subject
to the filing requirement with the CSRC. We cannot predict whether the Overseas Listing Trial Measures will apply to any follow-on offerings
that we may conduct in the future or that we will be able to obtain the required approval or accomplish the required filings or other
regulatory procedures in a timely manner. If we fail to comply with the Overseas Listing Trial Measures, the CSRC may s

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<TEXT>
 March 13, 2025

Herman Wong
Chief Financial Officer
DESWELL INDUSTRIES INC
10B, Edificio Associacao Industrial De Macau
32 Rua do Comandante Mata e Oliveria , Macao
Special Administrative Region, PRC

 Re: DESWELL INDUSTRIES INC
 Form 20-F filed August 9, 2024
 File No. 001-33900
Dear Herman Wong:

 We have reviewed your filing and have the following comment(s).

 Please respond to this letter within ten business days by providing the
requested
information or advise us as soon as possible when you will respond. If you do
not believe a
comment applies to your facts and circumstances, please tell us why in your
response.

 After reviewing your response to this letter, we may have additional
comments.

Annual Report on Form 20-F filed August 9, 2024
Introduction, page 3

1. We note that your definition of China or PRC excludes Hong
Kong and Macao.
 In your future filings, please clarify that the legal and operational
risks associated with
 your operating in China also apply to your operations in Hong Kong and
Macao.
Part I
Item 3. Key Information, page 4

2. In your future filings, please clearly disclose which subsidiaries or
entities are
 conducting your business operations and which are holding companies.
Additionally,
 please note which operating subsidiaries are conducting business
operations in China,
 Hong Kong or Macao.
3. In your future filings, please also provide early in the Key Information
section the
 diagram of the company's corporate structure currently included under
the Information
 About the Company section on page 31.
4. Please disclose the location of your auditor s headquarters.
 March 13, 2025
Page 2

5. We note your risk factor disclosure on page 22 that states Deswell
and our PRC
 subsidiaries (i) are not required to obtain permissions from the China
Securities
 Regulatory Commission, or the CSRC, (ii) are not required to go through
 cybersecurity review by the Cyberspace Administration of China, or the
CAC, and
 (iii) have not been asked to obtain or were denied such permissions by
any PRC
 authority. In your future filings, please disclose here in the Key
Information section
 more prominently whether you relied on counsel in determining you are
not required
 to obtain permissions from or complete filings with the CAC and CSRC,
and if you
 did, name your PRC counsel. If you did not rely on counsel, please
revise to discuss
 how you came to that conclusion and explain why you did not need to
consult with
 counsel in that instance. Additionally, please describe the consequences
to you and
 your investors if you or your subsidiaries: (i) do not receive or
maintain such
 permissions or approvals, (ii) inadvertently conclude that such
permissions or
 approvals are not required, or (iii) applicable laws, regulations, or
interpretations
 change and you are required to obtain such permissions or approvals in
the future.
 Additionally, please update your risk factor disclosure accordingly.
Cash Flows through Our Organization, page 5

6. We note your disclosure of the dividends Deswell paid to its investors.
In your future
 filings, please discuss the tax consequences of those dividends paid to
investors.
 Additionally, please quantify any dividends or distributions that a
subsidiary, not just
 the PRC subsidiaries, has made to the holding company and which entity
made such
 transfer, and their tax consequences.
Risks Related to Doing Business in China, page 18

7. Given the Chinese government s significant oversight and discretion
over the conduct
 and operations of your business, in your future filings please revise to
describe any
 material impact that intervention, influence, or control by the Chinese
government has
 or may have on your business or on the value of your securities.
Highlight separately
 the risk that the Chinese government may intervene or influence your
operations at
 any time, which could result in a material change in your operations
and/or the value
 of your securities. We remind you that, pursuant to federal securities
rules, the term
 control (including the terms controlling, controlled by,
 and under common
 control with ) means the possession, direct or indirect, of the
power to direct or
 cause the direction of the management and policies of a person, whether
through the
 ownership of voting securities, by contract, or otherwise.
Summary of Risk Factors, page 6

8. In your future filings in your summary of risk factors, please disclose
the risks that
 your corporate structure and being based in or having the majority of
the company s
 operations in China poses to investors. In particular, describe the
significant
 regulatory, liquidity, and enforcement risks. For example, specifically
discuss risks
 arising from the legal system in China, including risks and
uncertainties regarding the
 enforcement of laws and that rules and regulations in China can change
quickly with
 little advance notice; and the risk that the Chinese government may
intervene or
 influence your operations at any time, or may exert more control over
offerings
 March 13, 2025
Page 3

 conducted overseas and/or foreign investment in China-based issuers,
which could
 result in a material change in your operations and/or the value of your
securities.
 Acknowledge any risks that any actions by the Chinese government to
exert more
 oversight and control over offerings that are conducted overseas and/or
foreign
 investment in China-based issuers could significantly limit or
completely hinder your
 ability to offer or continue to offer securities to investors and cause
the value of your
 securities to significantly decline or be worthless.
General

9. Please create a separate Enforceability of Civil Liabilities section for
the discussion of
 the enforcement risks related to civil liabilities due to your officers
and directors being
 located in China or Hong Kong. Please identify each officer and/or
director located in
 China or Hong Kong and disclose that it will be more difficult to
enforce liabilities
 and enforce judgments on those individuals. For example, revise to
discuss more
 specifically the limitations on investors being able to effect service
of process and
 enforce civil liabilities in China, lack of reciprocity and treaties,
and cost and time
 constraints.
Exhibit 12 - Certification, page 1

10. The certifications provided as Exhibit 12.1 and Exhibit 12.2 for your
Form 20-F for
 fiscal year ended March 31, 2024 do not include paragraph 4(b) referring
to your
 internal control over financial reporting. Please include the
 appropriate certification language in future filings.
 We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence
of action by the staff.

 Please contact Jeanne Baker at 202-551-3691 or Al Pavot at 202-551-3738
if you
have questions regarding comments on the financial statements and related
matters. Please
contact Nicholas O'Leary at 202-551-4451 or Conlon Danberg at 202-551-4466 with
any
other questions.

 Sincerely,

 Division of
Corporation Finance
 Office of
Industrial Applications and
 Services
</TEXT>
</DOCUMENT>

United States securities and exchange commission logo
January 2, 2024
Herman Wong
Chief Financial Officer
Deswell Industries Inc.
10B, Edificio Associacao Industrial De Macau
32 Rua do Comandante Mata e Oliveria, Macao
Special Administrative Region, PRC
Re:Deswell Industries Inc.
Form 20-F for Fiscal Year Ended March 31, 2023
File No. 001-33900
Dear Herman Wong:
            We have completed our review of your filing. We remind you that the company and its
management are responsible for the accuracy and adequacy of their disclosures, notwithstanding
any review, comments, action or absence of action by the staff.
Sincerely,
Division of Corporation Finance
Disclosure Review Program
cc:       Carrie Leahy

CORRESP
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filename1.htm

    CARRIE LEAHY

    CLEAHY@BODMANLAW.COM

    734-930-0120

    December 6, 2023

    BODMAN PLC

    SUITE 400

    201 SOUTH DIVISION STREET

    ANN ARBOR, MICHIGAN

    48104734-930-2494 FAX

    734-761-3780

    United States Securities and Exchange Commission

    Division of Corporation Finance

    100 F Street, N.E.

    Washington, D.C. 20549

    Attention:

    Ms. Jennifer Gowetski

    Mr. Andrew Mew

 Re: Deswell Industries, Inc.

Amendment No. 1 to Form 20-F for the Fiscal Year Ended March 31,

 2023; Response dated December 6, 2023

File No. 001-33900

Dear Ladies and Gentlemen:

  On behalf of our client, Deswell Industries, Inc., a company organized under the laws of the British Virgin Islands (the “Company”), we respond to the comments contained in the letter from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) dated November 22, 2023 (the “November 22 Comment Letter”), relating to the Company’s Amendment No. 1 to the annual report on Form 20-F for the fiscal year ended March 31, 2023 filed with the Commission on September 28, 2023 (the “Amendment”).

Set forth below are the Company’s
responses to the Staff’s comments in the November 22 Comment Letter. The Staff’s comments are retyped below in bold italic
font for your ease of reference.

Amendment No 1. to Form 20-F
for the Fiscal Year Ended March 31, 2023 Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections, page 2.

 1. We note your statement that you reviewed your register of shareholders and public filings made by
its officers, directors and shareholders in connection with your required submission under paragraph (a). Please supplementally describe
any additional materials that were reviewed and tell us whether you relied upon any legal opinions or third party certifications such
as affidavits as the basis for your submission. In your response, please provide a similarly detailed discussion of the materials reviewed
and legal opinions or third party certifications relied upon in connection with the required disclosures under paragraphs (b)(2) and (3).

DETROIT | TROY | ANN ARBOR | CHEBOYGAN | GRAND RAPIDS

December 6, 2023

Page 2

In connection with the required
submission under paragraphs (a), (b)(2) and (b)(3) of Item 16I, the Company respectfully submits that
the Company previously had reviewed and was familiar with the following publicly available documents:

 ● The
                                            beneficial ownership report on Schedule 13 D/A filed by Richard Pui Hon Lau on May 4, 2023
                                            with respect to the Company’s securities.

 ● The
                                            beneficial ownership report on Schedule 13 D/A filed by Richard Pui Hon Lau on October 28,
                                            2022 with respect to the Company’s securities.

 ● The
                                            beneficial ownership report on Schedule 13 D/A filed by Richard Pui Hon Lau on July 6, 2022
                                            with respect to the Company’s securities.

 ● The
                                            beneficial ownership report on Schedule 13 D/A filed by Richard Pui Hon Lau on January 28,
                                            2022 with respect to the Company’s securities.

The Company has not relied upon
any legal opinions or third-party certifications such as affidavits as the basis of its submission. To the Company’s best knowledge,
after examining the Company’s register of shareholders and public filings made by its officers, directors and shareholders (including
the aforementioned Schedule 13 D/As), no shareholder beneficially owned 5% or more of the Company’s total outstanding shares and
voting power as of June 30, 2023 (the most recent practicable date disclosed in Form 20-F), except for the family of Richard Pui Hon Lau,
the Company’s prior Chairman of the Board of Directors until his passing on June 12, 2023, which beneficially owned approximately
61.7% of the Company’s outstanding common shares, and Chin Pang Li, a long-time member and current Chairman of the Board of Directors
owned approximately 10.1% of the Company’s outstanding common shares. The Company believes such reliance on the public filings is
reasonable and sufficient, because major shareholders are legally obligated to file beneficial ownership schedules with the Commission.

Also, given the controlling
ownership of the family of Richard Pui Hon Lau and the ownership of Chin Pang Li, the Company is not owned or controlled by a governmental
entity in a foreign jurisdiction.

On the other hand, since each
of the Company’s consolidated entities is 100% owned, directly or indirectly, by the Company, the Company did not rely upon additional
documentation, to reach its conclusion that none of the consolidated entities is owned or controlled by any foreign government entities.

Amendment No 1. to Form 20-F
for the Fiscal Year Ended March 31, 2023 Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections, page 3.

December 6, 2023

Page 3

 2. In order to clarify the scope of your review, please supplementally describe the steps you have
taken to confirm that none of the members of your board or the boards of your consolidated foreign operating entities are officials of
the Chinese Communist Party. For instance, please tell us how the board members’ current or prior memberships on, or affiliations
with, committees of the Chinese Communist Party factored into your determination. In addition, please tell us whether you have relied
upon third party certifications such as affidavits as the basis for your disclosure.

The Company respectfully submits that it had reviewed
publicly available information and its internal records and conducted inquiries to the members of the board of directors of the Company
and its consolidated foreign operating entities to determine whether each of such individuals is an official of the Chinese Communist
Party. Based on information provided by the applicable individuals, members of the Company’s board of directors did not have current
or prior memberships on, or affiliations with, committees of the Chinese Communist Party. The Company did not rely upon third-party certifications
as the basis for disclosure and does not believe such third-party certifications are appropriate or necessary to its determination.

After taking the foregoing steps, nothing has
come to the Company’s attention suggesting that any such individual is an official of the Chinese Communist Party or has any memberships
or affiliations that could reasonably result in such individual being considered an official of the Chinese Communist Party.

Amendment No 1. to Form 20-F
for the Fiscal Year Ended March 31, 2023 Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections, page 3.

 3. With respect to your disclosure pursuant to Item 16I(b)(5), we note that you have included language
that such disclosure is “to the best of our knowledge.” Please supplementally confirm without qualification, if true, that
your articles and the articles of your consolidated foreign operating entities do not contain wording from any charter of the Chinese
Communist Party.

The Company respectfully
confirms that the Company’s articles and the articles of the Company’s consolidated foreign operating entities does not contain
wording from any charter of the Chinese Communist Party.

Please note that
this statement is being made without “best knowledge” qualification as indicated in the Staff’s comment.

December 6, 2023

Page 4

***

If you have further questions
or comments regarding, or require further information or clarification of, any of the responses provide in this letter, please contact
me at cleahy@bodmanlaw.com, 734-930-0120.

    Very truly yours,

    /s/ Carrie Leahy

    Carrie Leahy

United States securities and exchange commission logo
November 22, 2023
Herman Wong
Chief Financial Officer
Deswell Industries Inc.
10B, Edificio Associacao Industrial De Macau
32 Rua do Comandante Mata e Oliveria, Macao
Special Administrative Region, PRC
Re:Deswell Industries Inc.
Amendment No. 1 to Form 20-F for Fiscal Year Ended March 31, 2023
Response dated September 28, 2023
File No. 001-33900
Dear Herman Wong:
            We have reviewed your September 28, 2023 response to our comment letter and have the
following comments.
            Please respond to this letter within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe a
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this letter, we may have additional comments. Unless
we note otherwise, any references to prior comments are to comments in our September 14,
2023 letter.
Amendment No. 1 to Form 20-F for Fiscal Year Ended March 31, 2023
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections, page 2
1.We note your statement that you reviewed your register of shareholders and public filings
made by its officers, directors and shareholders in connection with your required
submission under paragraph (a).  Please supplementally describe any additional materials
that were reviewed and tell us whether you relied upon any legal opinions or third party
certifications such as affidavits as the basis for your submission.  In your response, please
provide a similarly detailed discussion of the materials reviewed and legal opinions or
third party certifications relied upon in connection with the required disclosures under
paragraphs (b)(2) and (3).

 FirstName LastNameHerman Wong
 Comapany NameDeswell Industries Inc.
 November 22, 2023 Page 2
 FirstName LastName
Herman Wong
Deswell Industries Inc.
November 22, 2023
Page 2
2.In order to clarify the scope of your review, please supplementally describe the steps you
have taken to confirm that none of the members of your board or the boards of your
consolidated foreign operating entities are officials of the Chinese Communist Party.  For
instance, please tell us how the board members’ current or prior memberships on, or
affiliations with, committees of the Chinese Communist Party factored into your
determination.  In addition, please tell us whether you have relied upon third party
certifications such as affidavits as the basis for your disclosure.
3.With respect to your disclosure pursuant to Item 16I(b)(5), we note that you have included
language that such disclosure is “to the best of our knowledge.”  Please supplementally
confirm without qualification, if true, that your articles and the articles of your
consolidated foreign operating entities do not contain wording from any charter of the
Chinese Communist Party.
            Please contact Jennifer Gowetski at 202-551-3401 or Andrew Mew at 202-551-3377 with
any other questions.
Sincerely,
Division of Corporation Finance
Disclosure Review Program
cc:       Carrie Leahy

CORRESP
1
filename1.htm

    CARRIE
    LEAHY

    CLEAHY@BODMANLAW.COM

    734-930-0120

                                            September 28, 2023

                                BODMAN
                                PLC
 SUITE 400
 201 SOUTH DIVISION STREET
 ANN ARBOR, MICHIGAN 48104
 734-930-2494 FAX

                                734-761-3780

    United States Securities and Exchange Commission

    Division of Corporation Finance

    100 F Street, N.E.

    Washington, D.C. 20549

    Attention:        Mr.
    Jimmy McNamara

                            Ms.
    Jennifer Gowetski

    Re:
    Deswell Industries Inc.

    Form 20-F for the Fiscal Year Ended March 31, 2023

File No. 001-33900

    Dear Ladies and Gentlemen:

    On behalf of our client, Deswell Industries Inc., a company organized under the laws of the British Virgin Islands (the “Company”), we respond to the comments contained in the letter from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) dated September 14, 2023 (the “September 14 Comment Letter”), relating to the Company’s annual report on Form 20-F for the fiscal year ended March 31, 2023 filed with the Commission on July 28, 2023 (the “Annual Report”).

    Set forth below are the Company’s responses to the Staff’s comments in the September 14 Comment Letter. The Staff’s comments are retyped below in bold italic font for your ease of reference.

    Form 20-F for the Fiscal Year Ended March 31, 2023

    Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections, page 63

    1. We note that during your fiscal year
ended March 31, 2023 you were identified by the Commission pursuant to Section 104(i)(2)(A) of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
7214(i)(2)(A)) as having retained, for the preparation of the audit report on your financial statements included in the Form 20-F, a
registered public accounting firm that has a branch or office that is located in a foreign jurisdiction and that the Public Company Accounting
Oversight Board had determined it is unable to inspect or investigate completely because of a position taken by an authority in the foreign
jurisdiction. Please provide the documentation required by Item 16I(a) of Form 20-F or tell us why you are not required to do so. Additionally,
please amend your Form 20-F to provide the disclosures required under Item 16I(b) of Form 20-F. Refer to the Staff Statement on the Holding
Foreign Companies Accountable Act and the Consolidated Appropriations Act, 2023, available on our website at https://www.sec.gov/corpfin/announcement/statementhfcaa-040623.

    DETROIT
    |
    TROY
    |
    ANN ARBOR
    |
    CHEBOYGAN
    |
    GRAND RAPIDS

    September 28, 2023

    Page 2

    In response to the Staff’s comment, the Company will file, on or before September 28, 2023, an amendment to the Annual Report (the “Amendment”) to include the disclosures required under Item 16I(b) of Form 20-F.

    Further, in response to Item 16I(a) of Form 20-F, the Company provides the following information to the Commission, which the Company believes establishes that it is not owned or controlled by a governmental entity in China. The following information will also be submitted to the Commission on a supplemental basis as an Exhibit to the Amendment.

    Based on an examination of the Company’s register of shareholders and public filings made by its officers, directors and shareholders, to the Company’s knowledge, no shareholder other than (a) the family of Richard Pui Hon Lau and (b) Chin Pang Li owns more than 5% of the Company’s outstanding common shares. As of June 30, 2023, the family of Richard Pui Hon Lau, the Company’s prior Chairman of the Board of Directors until his passing on June 12, 2023, beneficially owned approximately 61.7% of the Company’s outstanding common shares, and Chin Pang Li, a long-time member and current Chairman of the Board of Directors owned approximately 10.1% of the Company’s outstanding common shares. The outstanding shares beneficially owned by Mr. Li include options to purchase 200,000 shares granted to Mr. Li under the Company’s stock option plan. Further, based on our knowledge and representations by such persons, neither Mr. Li nor the family of Richard Pui Hon Lau is a representative of any government entity in the People’s Republic of China.

    As of June 30, 2023, the directors and executive officers of the Company were as follows: (a) Edward So Kin Chung, Chief Executive Officer; (b) Chin Pang Li, Executive Director of Manufacturing and Administration for Plastic Operations and Chairman of the Board of Directors; (c) Hung-Hum Leung, Non-Executive Director and Member of Audit Committee; (d) Allen Yau-Nam Cham, Non-Executive Director and Chairman of Audit Committee; (e) Wing-Ki Hui, Non-Executive Director and Member of Audit Committee; (f) Herman Wong Chi Wah, Chief Financial Officer; and (g) Ben Poon Yiu Sing, Interim Director and General Manager of Jetcrown Industrial (Dongguan) Limited. Based on our knowledge and representations by the foregoing persons, none of the foregoing persons are representatives of any government entity in the People’s Republic of China.

    Further, the Company is not aware of any government entity in China that is in possession of the power, direct or indirect, to direct or cause the direction of the management and policies of the Company, whether through the ownership of voting securities, by contract, or otherwise.

    Based on the above, the Company is not owned or controlled by a government entity in China.

    ***

    September 28, 2023

    Page 3

    If you have further questions or comments regarding, or require further information or clarification of, any of the responses provide in this letter, please contact me at cleahy@bodmanlaw.com, 734-930-0120.

    Very truly yours,

    /s/ Carrie Leahy

    Carrie Leahy

United States securities and exchange commission logo
September 14, 2023
Herman Wong
Chief Financial Officer
Deswell Industries Inc.
10B, Edificio Associacao Industrial De Macau
32 Rua do Comandante Mata e Oliveria, Macao
Special Administrative Region, PRC
Re:Deswell Industries Inc.
Form 20-F for the Fiscal Year Ended March 31, 2023
File No. 001-33900
Dear Herman Wong:
            We have limited our review of your filing to the submission and/or disclosures as
required by Item 16I of Form 20-F and have the following comment.  In our comment, we may
ask you to provide us with information so we may better understand your disclosure.
            Please respond to this comment within ten business days by providing the requested
information or advise us as soon as possible when you will respond.
            After reviewing your response to this comment, we may have additional comments.
Form 20-F for the Fiscal Year Ended March 31, 2023
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections, page 63
1.We note that during your fiscal year ended March 31, 2023 you were identified by the
Commission pursuant to Section 104(i)(2)(A) of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7214(i)(2)(A)) as having retained, for the preparation of the audit report on your
financial statements included in the Form 20-F, a registered public accounting firm that
has a branch or office that is located in a foreign jurisdiction and that the Public Company
Accounting Oversight Board had determined it is unable to inspect or investigate
completely because of a position taken by an authority in the foreign jurisdiction.  Please
provide the documentation required by Item 16I(a) of Form 20-F or tell us why you are
not required to do so.  Additionally, please amend your Form 20-F to provide the
disclosures required under Item 16I(b) of Form 20-F. Refer to the Staff Statement on the
Holding Foreign Companies Accountable Act and the Consolidated Appropriations Act,
2023, available on our website at https://www.sec.gov/corpfin/announcement/statement-
hfcaa-040623.

 FirstName LastNameHerman Wong
 Comapany NameDeswell Industries Inc.
 September 14, 2023 Page 2
 FirstName LastName
Herman Wong
Deswell Industries Inc.
September 14, 2023
Page 2
            We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
            Please contact Jimmy McNamara at 202-551-7349 or Jennifer Gowetski at 202-551-3401
with any questions.
Sincerely,
Division of Corporation Finance
Disclosure Review Program
cc:       Carrie Leahy

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-4631

       DIVISION OF
CORPORATION FINANCE

Mail Stop 4631
March 17, 2010

via U.S. mail and facsimile

Betty Lam, Chief Financial Officer,   Deswell Industries, Inc. 17B, Edificio Comercial Rodrigues,  599 Avenida da Praia Grande, Macao Special Administrative Region, PRC
 RE: Deswell Industries, Inc.
  Form 20-F for the Fiscal  Year Ended March 31, 2009
  Filed August 14, 2009   File No. 001-33900
Dear Ms. Lam:
 We have completed our review of your Form 20-F and related filings and have no further
comments at this time.
Sincerely,
           T e r e n c e  O ’ B r i e n          A c c o u n t i n g  B r a n c h  C h i e f

CORRESP
1
filename1.htm

corresp

Deswell Industries, Inc.

17B, Edificio Comercial Rodrigues

599 Avenida da Praia Grande

Macao, Special Administrative Region, PRC

Tel: (853) 322096

Fax: (853) 323265

March 8, 2010

Via EDGAR

Terence O’Brien

Accounting Branch Chief

Division of Corporation Finance

Securities and Exchange Commission

Mail Stop 4631

100 F Street, NE

Washington, DC 20549-7010

    Re:

    Deswell Industries, Inc. (“Deswell” or the “Company”)

Form 20-F for the fiscal year ended March 31, 2009

Filed August 14, 2009

Dear Mr. O’Brien:

This is in response to your comment letter of February 22, 2010 to the undersigned as Chief
Financial Officer of the Company. For the convenience of the staff, each comment is repeated
verbatim with the Company’s response immediately following.

Form 20-F for the Fiscal Year Ended March 31, 2009

Note 2 — Summary of Significant Accounting Policies, page F-6

Foreign Currency Translation, page F-8

    1.

    We note your response to prior comment 1 from our letter dated January 13,
2010 and have the following additional comments.

[First Comment]:

    •

    Based on your response, it appears that you had a significant amount of US dollar sales and US
dollar expenses during the year ended March 31, 2008. As such, please provide us with a similar
analysis of each of the salient factors set forth in Appendix A of SFAS 52 to support the use of
the Hong Kong dollar and Chinese renmimbi [sic.] as your functional currencies for the year ended
March 31, 2008. Please ensure that your analysis addresses the percentage of total US denominated
sales that were generated by your Macao subsidiaries.

Terence O’Brien

Accounting Branch Chief

March 8, 2010

Page 2

Response:

As was the case for our year ended March 31, 2009 (“fiscal 2009”), we did have a significant amount
of US dollar sales and US dollar expenses during the year ended March 31, 2008 (“fiscal 2008”).

In accordance with your request, the following is an analysis of our operations in fiscal 2008,
similar to the one we provided in our letter of January 13, 2010 with respect to fiscal 2009, using
the salient factors set forth in Appendix A of SFAS 52.

     Sales Price and Sales Market Indicators (¶¶42(b), (c)):

     There was no significant change in our markets between fiscal 2008 and fiscal 2009. Like in
fiscal 2009, in fiscal 2008

    •

    our markets were worldwide;

    •

    our sales prices were primarily determined by worldwide competition;

    •

    our orders and sales contracts were mostly denominated in U.S. dollars;

    •

    our Macao subsidiaries, functioned as our sales offices, generating nearly 100
percent of our enterprise’s net sales and providing the cash inflow to support cash
outflow for the various members of our operating group;

    •

    most of our customers in each of our operating segments were OEMs and contract
manufacturers, were based across Asia, North America and Europe; and

    •

    our local sales volume in the PRC was insubstantial.

     In fiscal 2008, 54.5% of sales of our plastic products were contracted for in US$ and 45.5% of
our plastic product sales were contracted for in HK$. (This compares to 72.4% of plastic product
sales which were contracted for in US$ and 27.6% in HK$ in fiscal 2009, as we indicated in our
letter of January 13, 2010.)

     In fiscal 2008, 96% of sales of our products in our electronics segment were denominated in
US$ by our customers (compared to approximately 95% in fiscal 2009).

     Expense Indicators (¶42(d)):

     As was the case in fiscal 2009, the key components of expenses for our PRC subsidiaries in
fiscal 2008 were material costs, expatriates payroll, local labor costs and local operating
expenses. Our plastic injection molding operations has a relatively higher percentage of total
expenses paid in RMB than that of the electronic products assembly and metallic parts manufacturing
operations.

     In fiscal 2008, the percentage of total expenses paid in RMB for our plastic operations was
approximately 67% compared to 57% in fiscal 2009. Like fiscal 2009, the remaining payments in
fiscal 2008 were made mostly in US$ and for materials purchases.

     Prior to fiscal 2008, we had expected to increase our purchases locally in the PRC of
material, components and other supplies that we used to manufacture our products, using RMB. Our
purchasing strategy then was to lower the portion of our material purchases from imported sources
for which we paid in US$.

Terence O’Brien

Accounting Branch Chief

March 8, 2010

Page 3

     Because a majority of our expenses that we actually made in fiscal 2008 for our plastic
operations were in RMB, we gave greater weight to expense indicators as the determining factor to
retain RMB as our most appropriate functional currency for our PRC plastic operations.

     In January 2009, we again analyzed our operations for purposes of determining the most
appropriate functional currency. At that time, it became apparent that our strategy to source
materials locally and thereby pay in RMB in order to replace imported materials paid in US$ had not
been successfully implemented. The percentage of total expenses we paid in RMB in our plastic
operations had decreased to 57% in fiscal 2009 from 67% in fiscal 2008. Accordingly, in making
our functional currency analysis, we gave greater weight to the other salient factors specified in
Appendix A of SFAS 52, determining to change the functional currency for our plastic operations in
the PRC from RMB to US$.

     In fiscal 2008, the percentage of total expenses paid in RMB for our electronics operations
was approximately 39% compared to 37% in fiscal 2009 and the remaining payments were also mostly in
US$ for material purchases.

     Financing Indicators and Cash flow Indicators (¶¶42(a),(e):

     Like fiscal 2009, we financed the operations of our PRC manufacturing subsidiaries in fiscal
2008 through intercompany sales revenue they received from our Macao sales subsidiaries and the
cash flows related to the individual assets and liabilities of our PRC subsidiaries and of our
Macao subsidiaries impacted directly on the cash flows of Deswell, the ultimate parent.

     Intercompany transactions and arrangement Indicators (¶42(f)):

     As was the case for fiscal 2009, there was a high volume of intercompany transactions and
extensive interrelationships among the operations of our Macao and PRC subsidiaries and us in
fiscal 2008.

* * * *

In summary, it was not as clear cut as it was in fiscal 2009, when our US$ denominated sales were
substantially higher than our US$ denominated sales in fiscal 2008 and when our expenses paid in
RMB were substantially lower in fiscal 2009 for our plastic operations than they were in fiscal
2008, that the change from RMB and HK$ as our functional currencies to US$ was appropriate. Yet, we
recognize that, in hindsight, it is arguable that the application of the salient factors set forth
in Appendix A of SFAS 52 may have justified the change in our functional currency in fiscal 2008.

Nevertheless, because, the exchange rate of the HK$ to the US$ has been fixed by the Hong Kong
government at HK$7.80 to US$1.00 since 1983, a change in functional currencies to the US$ in fiscal
2008 would have resulted, and the change in functional currencies to the US$ in fiscal 2009
actually resulted, in no material change in our reported results of operations or financial
condition.

Terence O’Brien

Accounting Branch Chief

March 8, 2010

Page 4

The stability of the exchange rates of the HK$ to the US$ is illustrated in the following chart,
which compares the HK$ to the US$ at the end of each of our fiscal quarters in the three-year
period ended March 31, 2009.

    (1)

    HK dollar to US dollar data presented in this chart were derived from the historical
currency converter available at http://forexhistory.net.

    (2)

    If the end of a quarter fell on a Saturday or Sunday, datum is provided as of the previous
Friday.

[Second Comment]:

    •

    Please provide us with your proposed disclosures to address in
Management’s Discussion and Analysis the actual and reasonably likely effects of the
change in your functional currency, including its impact on your results of
operations, liquidity and cash flows.

Response:

We expect that our disclosure to be included in Management’s Discussion and Analysis in our Form
20-F for our year ending March 31, 2010 will be substantially to the following effect:

* * * *

     Prior to January 1, 2009, the functional currencies of our subsidiaries were Hong Kong dollars
and Chinese renminbi, or RMB. Effective January 1, 2009, the functional currencies of all our
subsidiaries were changed to U.S. dollars. The U.S. dollar is considered by management to be the
most appropriate functional currency of Deswell’s

Terence O’Brien

Accounting Branch Chief

March 8, 2010

Page 5

subsidiaries because over the years, and especially in our year ended March 31, 2009, most of
our customers contracted with our subsidiaries in U.S. dollars.

     During the year ended March 31, 2009, 72.4% of our sales of plastic products were denominated
in U.S. dollars, up from 54.5% of plastic product sales during the year ended March 31, 2008.
During the years ended March 31, 2009 and 2008, 95% and 96%, respectively, of sales of products in
our electronics segment were denominated in U.S. dollars by our customers. [We will add comparable
disclosure regarding the denomination of sales of products in our plastics and electronics segments
for our year ending March 31, 2010].

     Primarily because of the stability of the exchange rate between the Hong Kong dollar and the
U.S. dollar, which has existed since the Hong Kong government pegged the exchange rate at HK$7.80
to US$1.00 in 1983, and, to a lesser degree, because of the reversal of the trend of appreciation
of the RMB to the US dollar, beginning around July 1, 2008, and the relative stability in the
exchange rate of the RMB to the U.S. dollar since then, the actual effect of the change in our
functional currency to the U.S. dollar was immaterial to our results of operations, liquidity
and cash flows for our years ended March 31, 2009 [or March 31, 2010.]1 We do not
currently expect that it is reasonably likely that the change in our functional currency to the US
dollar will have a material effect on our results of operations, liquidity or cash flows in future
periods.

     Irrespective of our functional currency, however, if the exchange rate of the RMB to US dollar
again becomes volatile, our results of operations would be affected, positively or negatively,
depending on the amounts of expenses our subsidiaries pay in RMB and whether the RMB depreciates or
appreciates to the US dollar. In view of the current global economic recession, we cannot predict
whether the relative stability in the currency exchange rate of the RMB to the U.S. dollar
experienced during 2009, and which has continued so far into 2010, can be expected to continue
following an economic recovery. In any event, if the RMB resumes appreciating to the U.S. dollar,
our operating costs would increase and our financial results would be adversely affected.

* * * *

    1

    The proposed disclosure for the year ending
March 31, 2010 is based on our results for the nine months ended December 31,
2009 and the respective HK$ and RMB exchange rates to the US$ from July 1, 2008
to December 31, 2009 and is subject to change, if warranted, by the results of
our fourth quarter ended March 31, 2010 when they are known, or by material
changes in the HK$ or RMB exchange rates through March 31, 2010.

Terence O’Brien

Accounting Branch Chief

March 8, 2010

Page 6

If you have any further comments or questions, please do not hesitate to contact the undersigned.

    Sincerely,

DESWELL INDUSTRIES, INC.

    By:
    /s/ Betty Lam

    Betty Lam

    Chief Financial Officer

    cc:

    Ms. Tracey McKoy

Ms. Jeanne Baker

Hagen Ganem, Esq.

Dieter King, Esq.

    }
    c/o Tracey McKoy

via fax: (703) 813-6968

    Mark A. Klein, Esq.

    via email: mark.klein@klgates.com

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-4631

       DIVISION OF
CORPORATION FINANCE

Mail Stop 4631
February 22, 2010

via U.S. mail and facsimile

Betty Lam, Chief Financial Officer,   Deswell Industries, Inc. 17B, Edificio Comercial Rodrigues,  599 Avenida da Praia Grande, Macao Special Administrative Region, PRC
 RE: Deswell Industries, Inc.
  Form 20-F for the Fiscal  Year Ended March 31, 2009
  Filed August 14, 2009   File No. 001-33900
Dear Ms. Lam:

We have reviewed your response letter  dated January 28, 2010 and have the
following additional comments. If you disagree , we will consider your explanation as to
why our comment is inapplicable.    Form 20-F for the Fiscal Year Ended March 31, 2009

 Note 2 – Summary of Significant Accounting Policies, page F-6

 Foreign Currency Tr anslation, page F-8

1. We note your response to prior comment 1 from our letter dated January 13, 2010
and have the following additional comments.

• Based on your response, it appears that you had a si gnificant amount of US
dollar sales and US dollar expenses during the year ended March 31, 2008.
As such, please provide us with a simila r analysis of each of the salient factors
set forth in Appendix A of SFAS 52 to support th e use of the Hong Kong
dollar and Chinese renmimbi as your f unctional currencies for the year ended
March 31, 2008.  Please ensure that your analysis addr esses the per centage of
total US denominated sales that were generated by your Macao subsidiaries.
• Please provide us with your proposed di sclosures to address in Management’s
Discussion and Analysis the actual and reasonably likely effects of the change

Betty Lam, Chief Financial Officer
Deswell Industries, Inc. February 22, 2010 Page 2
in your functional currenc y, including its impact on your results of operations,
liquidity and cash flows.

*    *    *    *

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 ha ve additional comments after reviewing
responses to our comments.   You may contact Tracey McKoy, Staff A ccountant, at (202) 551-3772 or, in her
absence Jeanne Baker at (202) 551-3691 or th e undersigned Accounting Branch Chief at
(202) 551-3355 if you have questions regard ing comments on the financial statements
and related matters. Please c ontact Hagen Ganem, Staff A ttorney, at (202) 551-3330 or
Dieter King, Staff Attorney, at (202) 551-3338 with any legal related questions.

Sincerely,

          T e r e n c e  O ’ B r i e n          A c c o u n t i n g  B r a n c h  C h i e f

CORRESP
1
filename1.htm

SEC Correspondence

Deswell Industries, Inc.

17B, Edificio Comercial Rodrigues

599 Avenida da Praia Grande

Macao, Special Administrative Region, PRC

Tel: (853) 322096

Fax: (853) 323265

January 28, 2010

Via EDGAR

Terence O’Brien

Accounting Branch Chief

Securities and Exchange Commission

Mail Stop 4631

100 F Street, NE

Washington, DC 20549-7010

    Re:

    Deswell Industries, Inc. (“Deswell” or the “Company”)

Form 20-F for the fiscal year ended March 31, 2009

Filed August 14, 2009

Dear Mr. O’Brien:

This is in response your comment letter of January 13, 2010 to the undersigned as Chief Financial
Officer of the Company. For the convenience of the staff, each comment is repeated verbatim with
the Company’s response immediately following.

Form 20-F for the Fiscal Year Ended March 31, 2009

Note 2 — Summary of Significant Accounting Policies, page F-6

Foreign Currency Translation, page F-8

    1.

    We note effective January 1, 2009, your subsidiaries changed their functional
currencies to the U.S. dollar because you considered the U.S. dollar to be the most
appropriate functional currencies of the your subsidiaries. We have the following
comments regarding your accounting and disclosures.

    •

    With reference to salient economic factors set forth in Appendix A of SFAS 52,
please provide us a comprehensive analysis regarding the appropriateness of this
change.

    •

    As indicated in paragraph 46 of SFAS 52, if the functional currency of a
foreign entity changes from the currency of its country to the currency of its parent
company’s country, the translation adjustments that apply to the entity and that have
been accumulated in other comprehensive income in prior years should be retained in
that account. Nonmonetary assets that the entity owned at the end of the period
immediately before

Terence O’Brien

Accounting Branch Chief

January 28, 2010

Page 2

    the change should be translated in subsequent periods at the exchange rate that was
current at the end of that period. Please confirm, and revise future filings to
clarify, that this is how the company accounted for this change. In this regard, please
clarify why as of January 1, 2009, the company re-measured its subsidiaries’ assets and
liabilities and expense items which related to non-monetary assets and liabilities to
U.S. dollars and recorded the resulting net gain in other comprehensive income.

    •

    Please confirm, and expand your disclosures in future filings, that subsequent
to January 1, 2009 you appropriately applied the remeasurement guidance set forth in
paragraph 47 of SFAS 52. Otherwise address the appropriateness of your accounting.

    •

    In future filings please disclose in Management’s Discussion and Analysis the
actual and reasonably likely effects of the change in your functional currency,
including its impact on your results of operations, liquidity, and cash flows.

Response:

     Analysis Conducted in Determination to Change Functional Currency

     Through our subsidiaries, we conduct business in two principal operating segments: plastic
injection molding and electronic products assembling and metallic parts manufacturing.1

     Sales. We use our two subsidiaries located in Macao for marketing and sales of
products and components manufactured from our plastic injection molding operations and products,
components and parts manufactured from our electronic products assembling and metallic parts
manufacturing operations, respectively. These two Macao subsidiaries function as our sales arms,
marketing products to, contracting with, and ultimately selling to, our end customers located
throughout the world, principally original equipment manufacturers, or OEMs, and contract
manufactures to which OEMs outsource manufacturing. Virtually all of our cash is generated by our
Macao subsidiaries’ sales activities and we use that cash to fund and support the operations of our
entire enterprise, including our manufacturing operations conducted in the People’s Republic of
China.

     Product Supply and Manufacturing. Our Macao sales subsidiaries subcontract all
manufacturing activities to our subsidiaries in the PRC. These PRC subsidiaries function as the
manufacturers and suppliers of our products (plastics and electronics) based on demand from our OEM
customers, furnishing over 95 percent of the products, components and parts sold to our OEM
customers through our Macao sales subsidiaries.

    1

    Although our operations are conducted through
two operating segments, we disclose financial information for
three segments for financial reporting purposes, dividing our
electronic products assembling and metallic parts manufacturing into two
segments, and report financial information for each of those segments and for
our plastic injection molding segment.

Terence O’Brien

Accounting Branch Chief

January 28, 2010

Page 3

     Catalyst for Change in Functional Currency to US dollars (“US$”). In the fourth
quarter of our fiscal year ended March 31, 2009, we experienced a significant increase in the
proportion of sales orders from customers in US$. Such increase, which we considered a material
change from our historical experience, was the stimulus that caused us to assess whether our then
use of Hong Kong dollars (HK$) and Chinese renminbi (RMB) as our functional currencies remained
appropriate.

     Criteria Used in Assessment. In making our assessment, we reviewed the salient
economic factors set forth in paragraph 42 of the SFAS 52, each as discussed below.

    Sales Price and Sales Market Indicators (¶¶42(b), (c)):

     Our markets are worldwide; our sales prices are primarily determined by worldwide competition;
and our orders and sales contracts are mostly denominated in the U.S. dollar.

     Our Macao subsidiaries, which function as our sales offices, generate nearly 100 percent of
our enterprise’s net sales and provide the cash inflow to support cash outflow for the various
members of our operating group. Most of our customers in each of our operating segments are OEMs
and contract manufacturers and are based across Asia, North America and Europe. Our local sales
volume in the PRC is considered insubstantial. 2

     The majority of our sales of plastic products are contracted for in US$ and the balance in
HK$.Specifically, during the year ended March 31, 2009, 72.4% of our sales of plastic products were
denominated in US$, up from 54.5% of plastic product sales during the year ended March 31, 2008.
Moreover, over 95% of our sales of electronic products are denominated in US$ by our
customers.

     Expense Indicators (¶42(d)):

     The key components of expenses for our PRC subsidiaries are material costs, expatriates
payroll, local labor costs and local operating expenses. The percentage of total expenses paid in
the local currency RMB for the PRC subsidiaries were approximately 49% and 35% during the years
ended March 31, 2008 and 2009, respectively. The remaining payments were made mostly in US$ and
for material purchases.

    Financing Indicators and Cash flow Indicators (¶¶42(a),(e):

     We finance the operations of our PRC manufacturing subsidiaries either through intercompany
sales revenue they receive from our Macao sales subsidiaries or, when

    2

    We believe that our reported sales by
geographic area, which we determine by reference to the shipping destinations
as directed by our customers, do not necessarily reflect the final destinations
of our products or the actual nationalities of our customers. For example,
product sales in China, which we reported as amounting to 52.8% of our total
net sales for the year ended March 31, 2009, were included in our sales that
were primarily denominated in US$. However, we believe that these sales were to
offshore customers using local China shipping destinations, which in turn,
transshipped our products offshore.

Terence O’Brien

Accounting Branch Chief

January 28, 2010

Page 4

our PRC subsidiaries cannot generate sufficient cash to fund operations, through their receipt
of cash injections from their immediate, or the ultimate, parent corporation.

     Our Macao sales subsidiaries operate outside of Mainland China and sell the products
manufactured and supplied to them by our PRC subsidiaries, which our Macao subsidiaries market and
sell to customers worldwide, primarily generating and receiving US$.

     Subject to applicable PRC regulations, transfers of funds by our PRC subsidiaries in excess of
amounts required to fund their operations can be made to their immediate offshore parent entities
in our enterprise as dividend distributions. Offshore sales generated by our Macao sales
subsidiaries in excess of the amounts necessary to fund our enterprise’s operations are also
transferred to the ultimate parent as dividend distributions.

     Thus, the cash flows related to the individual assets and liabilities of our PRC subsidiaries
and of our Macao subsidiaries impacted directly on the cash flows of Deswell, the ultimate parent.

     Intercompany transactions and arrangement Indicators (¶42(f)):

     As indicated above, there is a high volume of intercompany transactions and there is an
extensive interrelationship among the operations of our Macao and PRC subsidiaries and us.

     Conclusion to Change Our Functional Currency. Having reviewed the above economic
factors individually and collectively, and giving what our management believes is the appropriate
weight to, among other things

    •

    the increases in, and predominance of, US$ denominated sales;

    •

    our reliance on US$ sales generated by our Macao sales subsidiaries to
fund the PRC operations and the transfers of excess funds as dividend payments to
the ultimate parent; and

    •

    albeit of less influence, the lower percentage of total costs and expenses in
RMB for the PRC operations.

our management concluded that the currency of the primary economic environment in which we operate
is the US$ and that the US$ is the most appropriate to use as our functional currency.

Our Accounting for the January 1, 2009 Change in Functional Currency; Future Filings

     In accordance with your request, we hereby confirm that, as indicated in paragraph 46 of SFAS
52:

    •

    the translation adjustments that applied to the Company, and that have been
accumulated in other comprehensive income until December 31, 2008, have been retained
in that account; and

Terence O’Brien

Accounting Branch Chief

January 28, 2010

Page 5

    •

    nonmonetary assets that Deswell owned at December 31, 2008, the end of the period
immediately before the change, were translated in subsequent periods at the exchange
rate that was current at the end of that period.

     We regret the confusion caused by the language in the last two sentences of the fourth
paragraph of Foreign Currencies Translation under Note 2 — Summary of Significant Accounting
Policies of the Notes to our Consolidated Financial Statements and that we did not state clearly in
the Notes that we accounted for the change in functional currency as indicated in the bullets
immediately above. We will revise future filings to clarify that we accounted for the January 1,
2009 change in functional currency as indicated in the bullets immediately above.

Our Post-Change Accounting; Future Filings

     In accordance with your request, we hereby confirm that after January 1, 2009, we followed and
applied the remeasurement guidance set forth in paragraph 47 of SFAS 52. We will expand our
disclosures in future filings to so indicate.

MD&A — Future Filings

     In accordance with your request, we will disclose in Management’s Discussion and Analysis of
future filings the actual and reasonably likely effects of the change in our functional currency,
including its impact on the results of our operations, liquidity and cash flows.

Item 6. Directors, Senior Management and Employees, page 36

    2.

    In future filings, if shares remain available for future issuance under your
1995 Stock Option Plan, please file or incorporate by reference this plan as an exhibit
to your Form 20-F. Please refer to Instruction 4(c) as to exhibits on Form 20-F.

Response:

We did not file or incorporate by reference our 1995 Stock Option Plan as an Exhibit to our fiscal
2009 Form 20-F because no shares remained available at March 31, 2009 for future issuance under
that Plan.

Item 7. Major Shareholders and Related Party Transactions, page 39

    3.

    We note from the beneficial ownership tables on pages 39 and 40 that different
ownership percentages are attributed to Richard Pui Hon Lau as of June 30, 2009. Please
explain to us the reason for this apparent inconsistency and, in future filings, please
ensure that your beneficial ownership tables are consistent. Please refer to Item 7.A
of Form 20-F.

Response:

The reason for the percentage difference for Mr. Lau in the two tables on pages 39 and 40 is that
in preparing the table under the heading “Change in the Percentage Ownership Held by Major
Shareholders” on page 40, we did not include options granted to Mr. Lau to purchase 369,500 shares,
whereas in the table under the heading “Major

Terence O’Brien

Accounting Branch Chief

January 28, 2010

Page 6

Shareholders” on page 39, we included such options in calculating Mr. Lau’s percentage ownership.

In preparing the table on page 39, we read Item 6. H of Form 20-F as requiring the requisite table
to include shares underlying options because Item 6. H(1) of Form 20-F expressly mentions options.

However, Item 7 of Form 20-F does not mention options. Accordingly, in preparing the table
on page 40, we read Item 7 as requiring a two-step process: (1) a threshold determination of who to
include in the table by using the beneficial ownership standard (which includes options), and once
such five percent or greater shareholders were determined, (2) disclosure of percentage ownership
information for such shareholders without regard to their ownership of options.

Evidently, because of your comment on these tables, it is the Staff’s view that such tables should
be consistent, which we take to mean that both should provide the required disclosure using the
beneficial ownership standard. In future filings, we will prepare the
tables accordingly.

Item 10. Additional Information, page 42

    4.

    In future filings, please provide the disclosure regarding “documents on
display” as required by Item 10.H of Form 20-F.

Response:

Your comment is noted and in future filings, we will add the “documents on display” disclosures
specified in Item 10. H. of Form 20-F.

Item 15. Controls and Procedures, page 50 Disclosure Controls and Procedures, page 50

    5.

    In future filings, please revise your discussion under this heading to reflect
that the evaluation of your disclosure controls and procedures is required by paragraph
(b) of Rule 13a-15 and 15d-15 of the Exchange Act

Response:

Your comment is noted and in future filings, we will refer to paragraph (b) of Rule 13a-15 and
15d-15 of the Exchange Act in Item 15 C. Thank you for drawing the typographical error to our
attention.

* * * *

In connection with responding to your comments, we acknowledge that:

    •

    the Company is responsible for the adequacy and accuracy of the
disclosures in its filings;

    •

    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

Terence O’Brien

Accounting Branch Chief

January 28, 2010

Page 7

    •

    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.

* * * *

If you have any further comments or questions, please do not hesitate to contact the undersigned.

    Sincerely,

DESWELL

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-4631

       DIVISION OF
CORPORATION FINANCE

Mail Stop 4631
January 13, 2010

via U.S. mail and facsimile

Betty Lam, Chief Financial Officer,   Deswell Industries, Inc. 17B, Edificio Comercial Rodrigues,  599 Avenida da Praia Grande, Macao Special Administrative Region, PRC
 RE: Deswell Industries, Inc.
  Form 20-F for the Fiscal  Year Ended March 31, 2009
  Filed August 14, 2009   File No. 001-33900
Dear Ms. Lam:

We have reviewed the above referenced filings and have the following 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.

Betty Lam, Chief Financial Officer
Deswell Industries, Inc. January 13, 2010 Page 2   Form 20-F for the Fiscal Year Ended March 31, 2009

 Note 2 – Summary of Significant Accounting Policies, page F-6

 Foreign Currency Tr anslation, page F-8

1. We note effective January 1, 2009, your s ubsidiaries change d their functional
currencies to the U.S. dollar because you cons idered the U.S. dollar to be the most
appropriate functional currencies of the your  subsidiaries.  We have the following
comments regarding your acc ounting and disclosures.

• With reference to salient economic fact ors set forth in Appendix A of SFAS 52,
please provide us a comprehensive analysis  regarding the appr opriateness of this
change.
• As indicated in paragraph 46 of SFAS 52, if the functional currency of a foreign
entity changes from the currency of its country to the currency of its parent
company's country, the translation adjustme nts that apply to the entity and that
have been accumulated in other comprehe nsive income in prior years should be
retained in that account.   Nonmonetary a ssets that the entity owned at the end of
the period immediately before the change should be translated in subsequent
periods at the exchange rate that was cu rrent at the end of that period.  Please
confirm, and revise future filings to clarify, that this is how the company
accounted for this change.  In this rega rd, please clarify why as of January 1,
2009, the company re-measured its  subsidiaries’ assets a nd liabilities and expense
items which related to non-monetary asse ts and liabilities to U.S. dollars and
recorded the resulting net gain in other comprehensive income.
• Please confirm, and expand your disclosures in future filings, that subsequent to
January 1, 2009 you appropriately applied the remeasurement guidance set forth
in paragraph 47 of SFAS 52.  Otherwise address the appropriateness of your
accounting.
• In future filings please disclose in Ma nagement’s Discussion and Analysis the
actual and reasonably likely effects of the change in your functional currency,
including its impact on your results of  operations, liquidity, and cash flows.
 Item 6. Directors, Senior Mana gement and Employees, page 36

2. In future filings, if shares remain av ailable for future issuance under your 1995
Stock Option Plan, please file  or incorporate by reference this plan as an exhibit
to your Form 20-F.  Please refer to Instru ction 4(c) as to exhibits on Form 20-F.

Betty Lam, Chief Financial Officer
Deswell Industries, Inc. January 13, 2010 Page 3  Item 7. Major Shareholders and Re lated Party Transactions, page 39

3. We note from the beneficial ownership tables on pages 39 and 40 that different
ownership percentages are attributed to Richard Pui Hon Lau as of June 30, 2009.
Please explain to us the reason for this apparent inconsistency and, in future
filings, please ensure that your  beneficial ownership tabl es are consistent.  Please
refer to Item 7.A of Form 20-F.

Item 10. Additional Information, page 42
4. In future filings, please provide the disc losure regarding “documents on display”
as required by Item 10.H of Form 20-F.

Item 15. Controls and Procedures, page 50
 Disclosure Controls and Procedures, page 50

5. In future filings, please revise your discus sion under this heading to reflect that
the evaluation of your disclosure controls  and procedures is required by paragraph
(b) of Rule 13a-15 and 15d-15 of the Exchange Act.

*    *    *    *

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 ha ve additional comments after reviewing
responses to our comments.
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filings reviewed by the sta ff to be certain that they have 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 any action with respect to the filing; and

Betty Lam, Chief Financial Officer
Deswell Industries, Inc. January 13, 2010 Page 4
• the company may not assert staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.
  In addition, please be advi sed that the Division of En forcement 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 Tracey McKoy, Staff A ccountant, at (202) 551-3772 or, in her
absence Jeanne Baker at (202) 551-3691 or th e undersigned Accounting Branch Chief at
(202) 551-3355 if you have questions regard ing comments on the financial statements
and related matters. Please c ontact Hagen Ganem, Staff A ttorney, at (202) 551-3330 or
Dieter King, Staff Attorney, at (202) 551-3338 with any legal related questions.

Sincerely,
           T e r e n c e  O ’ B r i e n          A c c o u n t i n g  B r a n c h  C h i e f

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

       DIVISION OF
CORPORATION FINANCE

May 1, 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
  File No. 0-26448

Dear Ms. Pang:  We have completed our review of your Form 20-F and related filings and have no further
comments at this time.
Sincerely,

John M. Hartz Senior Assistant Chief
        Accountant

CORRESP
1
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corresp

Deswell Industries, Inc.

17B, Edificio Comercial Rodrigues

599 Avenida da Praia Grande

Macao, Special Administrative Region, PRC

Tel: (853) 2832-2096

Fax: (853) 2832-3265

April 18, 2008

Via EDGAR

John M. Hartz,

Senior Assistant Chief Accountant

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549-7010

    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 Mr. Hartz:

This is in response your comment letter of February 27, 2008 to the undersigned as Chief Financial
Officer of the Company. For the convenience of the staff, each comment is repeated verbatim with
our response immediately following.

Form 20-F for the year ended March 31, 2007

Property, Plants and Equipment, page 24

    1.

    Comment: We have read your response to comment 1. In the future, please include more
clarifying information concerning the disposal of long-lived assets. Your disclosures should
include the 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.

Response:

Your comment is noted and in the future we will provide more clarification concerning the disposal
of long-lived assets, including the underlying reasons why they are classified as held for use,
sale or disposal, as applicable, at each period end, and if material, why and whether the disposal
is considered a discontinued operation. In that regard, we will also review paragraphs 47 and 48 of
SFAS 144.

10. Income Taxes, page F-12

    2.

    Comment: 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 single line item “Effect of income for which no income tax is chargeable” in the rate
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 filings the amounts
associated with each individual tax exempted company, as previously requested. Please also
confirm that you will include the clarifying information provided in your response related to
the nature of these entities in future filings.

John M. Hartz

Senior Assistant Chief Accountant

April 18, 2008

Page 2

Response:

Your comment is noted and we will disclose in future filings the amounts associated with each
individual tax exempted company if the amounts are material. We confirm that we will include in
future filings clarifying information related to the nature of these entities of the type provided
in response to Comment 3 of your comment letter of January 14, 2008.

    3.

    Comment: 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 facts
and circumstances that necessitated the write-off.

Response:

Your comment is noted and we will provide in future filings a brief description of the facts and
circumstances that necessitated the write-off where related to a discussion of a period covered by
the financial statements presented, and will also provide disclosure elsewhere in the filing, as
appropriate.

Form 6-K filed November 20, 2007

    4.

    Comment: We have read your response to comment 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
was not recorded earlier than the second quarter of fiscal 2008. Please advise.

Response:

The goodwill impairment was not recorded until the second quarter of fiscal 2008 as management
considered it immaterial to our consolidated enterprise because of the relatively small amounts of
consideration Deswell paid in prior fiscal years for the assets giving rise to the acquired
goodwill. Management determined to record the goodwill impairment in the second quarter of fiscal
2008 as a consequence of its continuing consideration and evaluation of the operations of Deswell’s
metal division. Historically, the operations of our metal division have never been material to
Deswell’s operations as a consolidated enterprise. However, since the incident involving doubtful
sales (which we disclosed when we reported our results for the quarter and six months ended
September 30, 2005 and which is the subject of Comment number 5 in your letter of January 14, 2008
and our response letter of February 15, 2008), management has focused, thoroughly evaluated and
strengthened the controls of Deswell’s metal division. Over that time, the scope of Deswell’s
metallic operations have been limited to providing integrated services to OEM customers of our
electronic division customers and metal product sales exclusively to those valuable OEM customers
whose orders could be relied upon to produce profitable results. The operations of our electronic
and metal divisions were again reviewed when Deswell began considering the acquisition of the
remaining minority interest of that group in June 2007. As part of the deliberations and in
assessing the fair value of acquired goodwill of Kwanta in 1996 and 1999, management considered the
contribution of the metal division to the entire enterprise to be relatively small and limited as
they were then (and now) confined to providing internal support services to our electronic
division. Accordingly, at the time the acquisition of the remaining minority interest was
consummated, management’s assessment of the acquired goodwill was that it had been impaired to nil
value and thus reflected the impairment in Deswell’s financial statements for the second quarter of
fiscal 2008.

John M. Hartz

Senior Assistant Chief Accountant

April 18, 2008

Page 3

* * * *

In connection with responding to your comments, we acknowledge that:

    •

    the Company is responsible for the adequacy and accuracy of the
disclosures in its filings;

    •

    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.

* * * *

If you have any further comments or questions, please do not hesitate to contact the undersigned.

    Sincerely,

DESWELL INDUSTRIES, INC.

    By:
    /s/ Eliza Y. P. Pang

    Eliza Y. P. Pang

    Chief Financial Officer

    cc:

    Ms. Jenn Do via email (dop@sec.gov) and fax (202) 772-9368

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

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Deswell Industries, Inc.

17B, Edificio Comercial Rodrigues

599 Avenida da Praia Grande

Macao, Special Administrative Region, PRC

Tel: (853) 322096

Fax: (853) 323265

February 17, 2008

Via EDGAR

John M. Hartz,

Senior Assistant Chief Accountant

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549-7010

    Re:

    Deswell Industries, Inc. (“Deswell” or the “Company”)

    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 Mr. Hartz:

This is in response your comment letter of January 14, 2008 to the undersigned as Chief Financial
Officer of the Company. For the convenience of the staff, each comment is repeated verbatim with
the Company’s response immediately following.

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. Please provide us with a timeline explaining the underlying events
leading up to this action and address the classification on your balance sheet, the timing of
such classification, and the appropriate measurement of this asset through 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 discounted
operations. Please see paragraph 41-45 of SFAS 144, for further guidance.

Response:

The timeline was substantially as follows:

John M. Hartz

Senior Assistant Chief Accountant

February 17, 2008

Page 2

    Q3 2007

    Oct to Dec. 2006

    We closed our injection molding and
assembly departments and dismissed or
relocated our employees to our
Dongguan manufacturing plant

    Q4 2007

    Jan to Mar 2007

    We continued to sell our remaining
inventory and sell and/or transferred
fixed assets to our Dongguan plant.

    Q1 2008

    April to June 2007

    We determined to sell the
Company-owned premises located in
Block G, Wing Village Industrial
Estate, Shekou, Shenzhen, China,
(which could be used for industrial
and commercial purposes) through
commercial property agencies. At that
time, the property market in Shekou,
Shenzhen was very active and robust.
We listed the premises for RMB80
million (approximately US$10.4
million), based on our board’s best
estimate. A property valuation
report was completed by a qualified
real estate appraisal company in PRC,
which was prepared in accordance with
the guidance and regulations of the
local tax bureau for the purpose of
assessing the “value added taxes on
property transfers.” The valuation
report, which was completed in June
2007, is effective for one year until
June 6, 2008. By the end of June
2007, a potential buyer was
identified, negotiations ensued and
an understanding was reached to sell
the premises to the prospective buyer
for RMB75 million (approximately
US$9.8 million). We then had the
agreements for the sale prepared and
presented them to the prospective
buyer.

    Fiscal 2007
Accounting

    As we disclosed in our financial
statements for the year ended March
31, 2007, this property was
classified as long-lived assets held
for use at March 31, 2007 because the
criteria for reclassifying such
property as held for sale (as
specified in paragraph 20 of SFAS
144) had not been met until after the
end of our fiscal year on March 31.
At the time of our preparation of our
Form 20F, management had committed to
a sale plan; the property was
available for immediate sale in its
then present condition; an active
program to locate a buyer had been
initiated; sale of the property was
believed probable and the transfer of
the property was expected to be
completed within one year; the
property was actively marketed for
sale at a price that we believed
reasonable at that time and it was
unlikely at that time that
significant changes would occur to
the plan of sale or that the plan
would be withdrawn.

    Q2 2008

    July to Sept. 2007

    By the end of July, we still had not
received the signed agreements and
the prospective buyer notified us
that it had been arranging funding.
Thereafter, we then received no
further communication from the
prospective buyer and considered that
transaction as proposed had been
abandoned by the prospective buyer.
We then requested our property agents
to solicit other potential buyers for
the premises.

Since the criteria required by paragraph 20 of SFAS 144 was no longer satisfied, we
reclassified the premises as held for use.

The closure of our Shekou manufacturing plant was not reported as a discontinued operation in our
financial statements for the year ended March 31, 2007 based on paragraphs 41-45 of SFAS 144.
Previously, our injection molding manufacturing operations were conducted in two plants, one in
Dongguan and one in Shekou. Gradually during fiscal 2007, we expanded our operations in Dongguan,
which began handling the manufacturing we formerly conducted at our Shekou plant. Hence, our
operations and cash flows from manufacturing operations formerly conducted at our Shekou factory
will not be eliminated from our ongoing manufacturing operations — they have been transferred to
our Dongguan factory. In this situation, the conditions specified in paragraph 42 of SFAS 144 for
reporting discontinued operations would not be met.

John M. Hartz

Senior Assistant Chief Accountant

February 17, 2008

Page 3

Operating and Financial Review and Prospects, page 26

Operating Results, page 26

    2.

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

    –

    Explain whether the increases described (for example, from the
telecommunications customer and new 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 reasons behind the changes, and their expected future trends.

Response:

Your comments are noted and disclosures expanding explanations for any substantial increases in
sales in the manner requested in your comments will be added to future filings, as applicable and,
as to your comments in the first two bullets, to the extent we have reasonable bases for any
forward-looking statements.

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 discuss the nature of those entities and jurisdictions which you have
determined are not subject to income taxes, as disclosed on page F-13, and the amounts
associated with each for each period presented.

Response:

Our companies that are in tax-free jurisdictions are primarily investment holding companies that
are registered in the British Virgin Islands. Moreover, our two major trading subsidiaries,
incorporated in the jurisdiction of Macao, are both income tax exempted by their business licenses
obtained since their incorporation in August 2003 and April 2004. Please refer to page 15 in the
discussion of “Information of the Company — History and Development of Deswell.” The amounts
associated are

John M. Hartz

Senior Assistant Chief Accountant

February 17, 2008

Page 4

reflected in the continuation of Note 10 on Income Taxes on page F-14 “Effect of income for which
no income tax is chargeable.”

    4.

    We note your discussion on page 6 of the impact that the EIT Law will have effective January
1, 2008. Please tell us and 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.

Response:

Following the implementation of the EIT Law effective January 1, 2008, the State Council recently
announced the transition rules for preferential tax policies (Guofa [2007] No.39) of January 2,
2008, for eligible enterprises previously subject to a 15% tax rate or 24% tax rate. As so
announced, the new enterprise income tax rates are:

    Rate under EIT for

    Rate under EIT for

    enterprises previously

    enterprises previously

    Tax Year

    subject to 15% tax rate

    subject to 24% tax rate

                2008

    18%

    25%

    2009

    20%

    25%

    2010

    22%

    25%

    2011

    24%

    25%

    2012

    25%

    25%

The standard tax rates applicable to our subsidiary, Jetcrown Industrial (Dongguan) Limited, will
be 25% from 2008. Our subsidiary, Dongguan Kwan Hong Electronics Co. Limited, was approved as a
“High-tech Enterprise” by the local tax authority in April 2007 and accordingly was to enjoy a
lower national tax rate of 15% for two years until April 2009. We have consulted the local tax
bureau with regard to the tax rate applicable in this situation and were advised to prepay at a
standard tax rate of 25% until the final assessment for preferential tax rate of 15% in our 2008
annual tax return.

    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 expenses in the electronic & metallic segment was
primarily due to the write off of doubtful sales of the metal division of $1,000,006 and the
decrease in operating income during the year ended March 31, 2006. Please tell us and disclose
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 recognition
policies were and are consistent with Staff Accounting Bulletin 101;

John M. Hartz

Senior Assistant Chief Accountant

February 17, 2008

Page 5

    –

    The underlying history and reason(s) for the write off;

    –

    How you write-off for tax purposes in the reporting period.

Response:

We disclosed in our press release of December 14, 2005, which we furnished to the SEC under cover
of Form 6-K on December 19, 2005, the circumstances and details of the doubtful sales immediately
upon their discovery when we reported our results for the quarter and six months ended September
30, 2005. The disclosure was included in Note 2 to our financial statements for the quarter and
nine months ended December 31, 2005 included in our press release of March 13, 2006, which we
furnished to the SEC under cover of Form 6-K on March 15, 2006, and in Note 2 to our financial
statements for the quarter and year ended March 31, 2006 included in our press release of June 23,
2006 (and in the narrative portion of such press release), which we furnished to the SEC under
cover of Form 6-K on June 26, 2006. Ultimately, such doubtful sales resulted in a write-off of
doubtful accounts receivable as disclosed and reported in our financial statements included in our
Annual Report on Form 20-F for the year ended March 31, 2006 filed on July 14, 2006. Please see the
Risk Factor on page 5 entitled We could suffer losses from corrupt or fraudulent business
practices. Conducting business in China is inherently risky,” pages 30 and 34 in MD&A and on pages
56 to 57 under Item 15 “Controls and Procedures — Changes in Internal Controls.”

We confirm that our revenue recognition policies were and are consistent with Staff Accounting
Bulletin 101. The write off of doubtful sales in the metallic division had reduced the taxable
profit of our subsidiary, Dongguan Kwan Hong Electronics Limited, which was comprised of electronic
and metallic divisions.

    6.

    We note your statement on page F-13 that Jetcrown Dongguan has revised its first and second
tax exemption year from the 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 additional income tax assessments which
are likely to arise has been charged to the consolidated income statement for the year
ended March 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 assessments, and reconcile the recognition of
this amount to your provision for income taxes on page F-13.

John M. Hartz

Senior Assistant Chief Accountant

February 17, 2008

Page 6

Response:

The tax rate applicable for Jetcrown Dongguan for calendar years 2002 to 2005 is 24%. Jetcrown
Dongguan was entitled to a full tax exemption for each of the calendar years ended December 31,
2002 and 2003 and a 50% tax exemption for each of the calendar years ended December 31, 2004, 2005
and 2006.

The nature of the assessment is in connection with the amounts of assessable profits and the date
of commencement of the first profitable year. Management believed that it would be in Deswell’s
best interests to reach an immediate resolution with the tax authorities on these issues in order
to avoid expending substantial time, effort and expenses that would have been involved in lengthy
negotiations with the tax authorities. As a result, we made a tax provision of an aggregate of
$450,000, which comprised approximately $154,000, $92,000, $166,000 and $38,000 for taxable
calendar years 2004, 2005 and 2006 and the quarter ended March 31, 2007, respectively.

The assessment and payment for income taxes for calendar years 2004 and 2005 were settled and
concluded in September 2007 at the amount, which as provided. The assessment and payment for
calendar year 2006 were finalized and settled at $101,000 in January 2008 with an over-provision of
$65,000.

Your comments are noted and we will add disclosures in future filings in MD&A the nature of
assessments, and will reconcile the recognition of this amount to our provision for income taxes in
our notes regarding income taxes in our financial statements.

Form 6-K dated August 17, 2007

    7.

    We note you recorded a stock provision 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.

Response:

We and our customers refer to “push out orders” to describe when a customer informs us that it
wishes us to delay the shipment of products the customer has ordered from us after we have ordered
raw materials and components on the basis of its purchase order and have commenced production.

During the quarter ended June 30, 2007, our customers Digidesign Inc. and Peavey Electronics Corp.
informed our Marketing Department that they were pushing out

John M. Hartz

Senior Assistant Chief Accountant

February 17, 2008

Page 7

delivery of orders. Based on experience, our Marketing Department anticipated that a portion of the
product orders covered by the push outs might ultimately be cancelled as consequence of the lower
than expected commercial acceptance of the products we manufacture for them by their customers. We
have been reviewing our inventory and engaged in negotiations with both Digidesign

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

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

   March 20, 2006

via U.S. Mail and facsimile to 011 (853) 323265

C.P. Li
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, 2005
		Filed July 8, 2005

		File No. 0-26448

Dear Mr. Li:

We have completed our review of your Form 20-F and related filings
and have no further comments at this time.

      Sincerely,

      Nili Shah
      Branch Chief

??

??

??

??

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

         DIVISION OF
CORPORATION FINANCE

</TEXT>
</DOCUMENT>

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17B, Edificio Comercial Rodrigues

599 Avenida da Praia Grande

Macao

Tel: (853) 322096

Fax: (853) 323265

March 14, 2006

Via EDGAR

Nili Shah

Branch Chief

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549-7010

    Re:

    Deswell Industries, Inc. (the “Company”)

    Form 20-F for the fiscal year ended March 31, 2005

    Filed July 8, 2005

    File No. 0-26448

Dear Ms. Shah:

This is in response your comment letter of February 28, 2006 to C. P. Li of the Company. For the
convenience of the staff, each comment is repeated verbatim with the Company’s response immediately
following.

Form 20-F for the fiscal year ended March 31, 2005

Financial Statements

    8.

    Income Taxes, page 66

    1.

    We note your response to prior comment 5 in our letter dated January 30, 2006 and have
the following comments:

    •

    For each subsidiary subject to a tax holiday or other concession, as detailed on page
66, please tell us and disclose, in future filings, when each of your tax holidays and
other concessions expire. Please also tell us and disclose the applicable tax rate after
the expiration of the tax holiday or other concession.

Nili Shah

Branch Chief

March 14, 2006

Page 2

Response:

As we have
disclosed on page 66 of our Form 20-F, the enterprise income tax in China is
generally charged at 33%, in which 30% is for national tax and 3% is for local tax. Assuming these
rates remain the same, these would be the rates upon expiration of our tax holidays and other concessions.
For the companies detailed on page 66 of our Form 20-F, the applicable tax rates are as
follows for the tax year ended December 31, 2005:

    •

    Jetcrown Industrial (Shenzhen) Limited continued to enjoy tax concession as an
“Export-oriented Enterprise” with a tax rate of 10%. The tax concession rate could
only be applied with the PRC Tax Bureau after the completion of the calendar year.

    •

    Dongguan Kwan Hong Electronics Company Limited is in process of applying for
approval as an “Export-oriented Enterprise” with a tax rate of 10%; otherwise, it would
enjoy tax rate of 15% as a “High-tech Enterprise” plus a local tax of 3%. At the
moment, the approval has not yet been granted.

    •

    Jetcrown Industrial (Dongguan) Limited commenced its second tax exemption year with
nil tax.

Your comments regarding future filings are noted and disclosure will be added in future filings
regarding when each of our tax holidays and other concessions expire and the applicable tax rate
after the expiration of the tax holiday or other concession.

    •

    We note your conclusion that you have no deferred tax assets or liabilities as a
result of operations in tax-free jurisdictions and various tax holidays and
concessions. Please tell us the amount and nature of each type of temporary taxable or
deductible difference associated with your subsidiaries subject to tax holidays and
concessions. Please also tell us, in detail, your basis for what appears to be a
determination that all temporary differences associated with these subsidiaries will
reverse prior to the end of the tax holiday. For example, we note that you depreciate
your fixed assets for book purposes between three and 50 years. However, your
disclosures on page 66 indicate that you only receive a 100% exemption from taxes for
two years, followed by a 50% exemption for three years. Thus, it would appear that
certain temporary differences will reverse alter the expiration of your tax holidays,
thereby requiring recognition of a deferred tax asset or liability.

Response:

We are not aware of any temporary taxable or deductible difference associated with our China
subsidiaries subject to tax holidays and concessions as mentioned above. For the depreciation of
fixed assets in these subsidiaries, the depreciation rates charged were consistent with that
allowable under the relevant taxation regulations. Hence no timing differences are raised. The
tax exemption of 100% or 50% are in reference to the tax on each year’s profits and no temporary
differences will be reversed after the expiration of tax holidays.

Nili Shah

Branch Chief

March 14, 2006

Page 3

    2.

    We note your response to prior comment 6 in our letter dated January 30, 2006. We assume
that the entities referred to in your response that are not subject to any tax
jurisdictions are the same as those disclosed under “Others” on page 67 of your Form 20-F.
In future filings, given the increasing impact of the income earned by entities in tax
free jurisdictions, expand your disclosures to discuss the nature of the aforementioned
entities and jurisdictions, and the amounts associated with each for each period
presented.

Response:

Your assumption that the entities referred to in our response of January 30, 2006 are not subject
to any tax jurisdictions are the same as those disclosed under “Others” on page 67 of your Form
20-F is correct. Companies in Macao are exempted from income tax as qualifying corporations under
its offshore commercial service investment incentive scheme.

Your comments regarding future filings are noted and disclosure will be added in future filings
that discusses the nature of the aforementioned entities and jurisdictions, and the amounts
associated with each for each period presented.

If you have any further comments or questions, please do not hesitate to contact the undersigned.

    Sincerely,

DESWELL INDUSTRIES, INC.

    By:
    /s/ C. P. Li

    C. P. Li

    Chief Financial Officer

    Cc:

    Ms. Jenn Do via fax: (202) 772-5368, and email: dop@sec.gov

    Mark A. Klein, Esq. via email: mklein@klng.com

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

February 28, 2006

via U.S. mail and facsimile to 011 (853) 323265

C.P. Li
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, 2005
		Filed July 8, 2005

		File No. 0-26448

Dear Mr. Li:

      We have reviewed your response letter dated February 20,
2006
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 may better understand your disclosure.  After
reviewing this information, we may or may not raise additional
comments.

Form 20-F for the fiscal year ended March 31, 2005

Financial Statements

8. Income Taxes, page 66

1.  We note your response to prior comment 5 in our letter dated
January 30, 2006 and have the following comments:
* For each subsidiary subject to a tax holiday or other
concession,
as detailed on page 66, please tell us and disclose, in future
filings, when each of your tax holidays and other concessions
expire.
Please also tell us and disclose the applicable tax rate after the
expiration of the tax holiday or other concession.
* We note your conclusion that you have no deferred tax assets or
liabilities as a result of operations in tax-free jurisdictions
and
various tax holidays and concessions.  Please tell us the amount
and
nature of each type of temporary taxable or deductible difference
associated with your subsidiaries subject to tax holidays and
concessions.  Please also tell us, in detail, your basis for what
appears to be a determination that all temporary differences
associated with these subsidiaries will reverse prior to the end
of
the tax holiday.  For example, we note that you depreciate your
fixed
assets for book purposes between three and 50 years.  However,
your
disclosures on page 66 indicate that you only receive a 100%
exemption from taxes for two years, followed by a 50% exemption
for
three years.  Thus, it would appear that certain temporary
differences will reverse after the expiration of your tax
holidays,
thereby requiring recognition of a deferred tax asset or
liability.

2.  	We note your response to prior comment 6 in our letter dated
January 30, 2006.  We assume that the entities referred to in your
response that are not subject to any tax jurisdictions are the
same
as those disclosed under "Others" on page 67 of your Form 20-F.
In
future filings, given the increasing impact of the income earned
by
entities in tax free jurisdictions, expand your disclosures to
discuss the nature of the aforementioned entities and
jurisdictions,
and the amounts associated with each for each period presented.

*    *    *    *

      As appropriate, please respond to these comments 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-
3255 if you have questions regarding these comments.

								Sincerely,

								Nili Shah
								Branch Chief

??

??

??

??

Mr. C.P. Li
Deswell Industries, Inc.
February 28, 2006
Page 2

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

         DIVISION OF
CORPORATION FINANCE

</TEXT>
</DOCUMENT>

CORRESP
1
filename1.htm

corresp

17B, Edificio Comercial Rodrigues

599 Avenida da Praia Grande

Macao

Tel: (853) 322096

Fax: (853) 323265

February 20, 2006

Via EDGAR

Nili Shah

Branch Chief

Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549-7010

    Re:

    Deswell Industries, Inc. (the “Company”)

Form 20-F for the fiscal year ended March 31, 2005

Filed July 8, 2005

File No. 0-26448

Dear Ms. Shah:

This is in response your comment letter of January 30, 2006 to C. P. Li of the Company. For the
convenience of the staff, each comment is repeated verbatim with the Company’s response immediately
following.

Form 20-F for the fiscal year ended March 31, 2005

Item 5. Operating and Financial Review and Prospects, page 24

Operating Results, page 24

    1.

    We note your discussion of the comparisons between fiscal years on pages 25-29.
In future filings, please address the following:

    •

    Discuss, in detail, exactly why your gross margins have been
decreasing steadily over the past five fiscal years, continuing into the
quarters of fiscal 2006. Please quantify the impact of price reductions and
raw material, in particular resin, price increases on the gross margin of each
segment. Refer to Item 5A and 5D of Form 20-F.

    •

    Discuss the sales and gross profit trends of the electronic
products assembling segment in greater detail. It appears that this segment
may

Nili Shah

Branch Chief

February 20, 2006

Page 2

    quickly eclipse the performance of the plastic injection molding segment.
We note that net sales for the electronic products segment more than doubled
during fiscal 2005.

Response:

Your comments are noted and disclosure will be added in future filings.

Liquidity and Capital Resources, page 30

    2.

    We note your table of contractual obligations and commercial commitments on
page 31. We have the following comments:

    •

    In future filings, please include a “Total” column, as shown in
Item 5F of Form 20-F.

Response:

Your comment is noted and disclosure will be added in future filings.

    •

    You disclose purchase obligations for the year ending March 31,
2006 of $8,695,000. However, it is not clear to us what this amount
represents, particularly in light of the fact that you do not engage in
long-term contracts with customers or suppliers. Please tell us, and disclose
in future filings to the extent material within this section and your
commitments and contingencies note, the nature of your purchase obligations.

Response:

The purchase obligations so disclosed were the amount of our outstanding purchase orders to our
vendors as of March 31, 2005. Of $8,695,000, $1,260,000 stemmed from our plastic segment and
$7,435,000 from our electronic & metallic segment.

Your comment is noted and disclosure regarding the nature of our purchase obligations, to the
extent material, will be added in future filings within Liquidity and Capital Resources and our
commitments and contingencies footnote to our notes to financial statements.

Item 11. Quantitative and Qualitative Disclosures About Market Risks, page 52

    3.

    You state that China’s law and regulations regulate dividend distribution and
repatriation by your China subsidiaries. Such dividends will be declared from retained
earnings, but the amount of retained earnings will be limited by the amount of dividends
that can be declared by your subsidiaries. Please provide us with the detailed
computations you performed demonstrating that the restricted retained earnings do not
exceed the 25% threshold, pursuant to Rule 4-08(e)(3) of Regulation S-X. If the
restricted net assets exceed the 25% threshold, revise your

Nili Shah

Branch Chief

February 20, 2006

Page 3

    financial statements in future filings to include the required Rule 4-08(e)(3)
disclosures and Schedule I, which is discussed under Rules 5-04 and 12-04 of
Regulation S-X.

Response:

In fact, for our China subsidiaries, there are no restrictions on the dividend distribution from
retained earnings, except when we decided to reinvest any of such subsidiary’s retained earnings.
If such application of reinvestment of retained earnings is made, the amount of dividend
distribution will then be limited by the retained earnings remaining in the subsidiary.

None of our Chinese subsidiaries had any restricted net assets nor restricted retained earnings for
the year ended March 31, 2005.

Your comment is noted and if our restricted net assets at the end of our fiscal years in the future
exceed the 25% threshold, we will include in our financial statements in future filings the
required disclosures and Schedule I.

Item 15. Controls and Procedures, page 53

    4.

    We note your disclosure regarding your disclosure controls and procedures. We
have the following comments:

    •

    If true, confirm to us that your chief executive officer and
chief financial officer concluded that your disclosure controls and procedures
are effective to ensure that information required to be disclosed by the
Company in reports that it files under the Securities Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the SEC, and that your officers concluded that your
disclosure controls and procedures are also effective to ensure that
information required to be disclosed in the reports that you file or submit
under the Exchange Act is accumulated and communicated to your management,
including your chief executive officer and chief financial officer, to allow
timely decisions regarding required disclosure. See Exchange Act Rule
13a-15(e). Please revise to comply with the requirement in future filings.

Response:

In accordance with your comment, we confirm to you that our chief executive officer and chief
financial officer concluded that our disclosure controls and procedures are effective to ensure
that information required to be disclosed by the Company in reports that it files under the
Securities Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the rules and forms of the SEC, and that our officers concluded that our disclosure
controls and procedures are also effective to ensure that information required to be

Nili Shah

Branch Chief

February 20, 2006

Page 4

disclosed in the reports that you file or submit under the Exchange Act is accumulated and
communicated to our management, including our chief executive officer and chief financial officer,
to allow timely decisions regarding required disclosure.

This comment is noted and disclosures will be made to comply with the requirement in future
filings.

    •

    If true, please confirm in your response that there have been
no changes in internal control over financial reporting that occurred during
the period covered by the annual report that have materially affected, or are
reasonably likely to materially affect your internal control over financial
reporting. Refer to Item 15(d) of Form 20-F. Please revise your future
filings to comply with this disclosure requirement.

Response:

In accordance with your comment, we confirm that there have been no changes in internal control
over financial reporting that occurred during the period covered by our Annual Report on Form 20-F
for the year ended March 31, 2005 that have materially affected, or are reasonably likely to
materially affect our internal control over financial reporting.

This comment is noted and disclosures will be made to comply with the requirement in future filings

Financial Statements

    8.

    Income Taxes, page 66

    5.

    Please tell us the facts and circumstances that have led to the recognition of
no deferred tax assets for the two most recent fiscal years, and deferred tax
liabilities of only $15,000 at March 31, 2004, resulting in nil deferred tax expenses
for the years ended March 31, 2003 and 2004, and $15,000 deferred tax expense for the
year ended March 31, 2005.

Response:

The assessment is made with reference to FASB statement No. 109 “Accounting for Income taxes” and
to the facts and circumstances of any transactions that might have taxable temporary differences
giving rise to deferred tax liabilities or assets and the extent of realization.

In note 8 — Income Taxes of our audited financial statements, we detailed the tax status of our
various operations. Most of our subsidiaries are either not subject to any tax jurisdictions or
are enjoying tax holidays and concessions in China. As a consequence, there are no material
transactions having timing differences giving rise to deferred tax assets or liabilities.

Nili Shah

Branch Chief

February 20, 2006

Page 5

After the assessment, management concluded that no deferred tax assets or deferred tax liabilities
should be recognized in such years.

    6.

    Please tell us the nature of the line item “Effect of income for which no
income tax is payable” in your reconciliation table on page 67. Citing relevant
accounting literature, please also tell us why the transactions included in this line
do not give rise to deferred taxes.

Response:

The line item “Effect of income for which no income tax is payable” is related to income of
entities that are not subject to any tax jurisdictions, which income, therefore, did not give rise
to any deferred taxes.

* * * *

In connection with responding to your comments, we acknowledge that:

    •

    the Company is responsible for the adequacy and accuracy of the
disclosures in its filings;

    •

    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.

* * * *

If you have any further comments or questions, please do not hesitate to contact the undersigned.

    Sincerely,

DESWELL INDUSTRIES, INC.

    By:
    /s/ C. P. Li

    C. P. Li

    Chief Financial Officer

    Cc:

    Ms. Jenn Do via fax: (202) 772-5368, and email: dop@sec.gov

Mark A. Klein, Esq. via email: mklein@klng.com

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

           						    January 30, 2006

By U.S. mail and facsimile to 011 (853) 323265

C.P. Li
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, 2005
		Filed July 8, 2005

		File No. 0-26448

Dear Mr. Li:

      We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your disclosures in
future filings in response to these comments.  If you disagree, we
will consider your explanation as to why our comment is
inapplicable
or a revision is unnecessary.  Please be as detailed as necessary
in
your explanation.  In some of our comments, 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 review 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 fiscal year ended March 31, 2005

Item 5. Operating and Financial Review and Prospects, page 24

Operating Results, page 24
1. We note your discussion of the comparisons between fiscal years
on
pages 25-29.  In future filings, please address the following:
* Discuss, in detail, exactly why your gross margins have been
decreasing steadily over the past five fiscal years, continuing
into
the quarters of fiscal 2006. Please quantify the impact of price
reductions and raw material, in particular resin, price increases
on
the gross margin of each segment.  Refer to Item 5.A and 5.D of
Form
20-F.
* Discuss the sales and gross profit trends of the electronic
products assembling segment in greater detail.  It appears that
this
segment may quickly eclipse the performance of the plastic
injection
molding segment.  We note that net sales for the electronic
products
segment more than doubled during fiscal 2005.

Liquidity and Capital Resources, page 30

2.  	We note your table of contractual obligations and commercial
commitments on page 31.  We have the following comments:
* In future filings, please include a "Total" column, as shown in
Item 5.F of Form 20-F.
* You disclose purchase obligations for the year ending March 31,
2006 of $8,695,000.  However, it is not clear to us what this
amount
represents, particularly in light of the fact that you do not
engage
in long-term contracts with customers or suppliers.  Please tell
us,
and disclose in future filings to the extent material within this
section and your commitments and contingencies note, the nature of
your purchase obligations.

Item 11. Quantitative and Qualitative Disclosures About Market
Risk,
page 52
3. You state that China`s law and regulations regulate dividend
distribution and repatriation by your China subsidiaries.   Such
dividends will be declared from retained earnings, but the amount
of
retained earnings will be limited by the amount of dividends that
can
be declared by your subsidiaries.  Please provide us with the
detailed computations you performed demonstrating that the
restricted
retained earnings do not exceed the 25% threshold, pursuant to
Rule
4-08(e)(3) of Regulation S-X.  If the restricted net assets exceed
the 25% threshold, revise your financial statements in future
filings
to include the required Rule 4-08(e)(3) disclosures and Schedule
I,
which is discussed under Rules 5-04 and 12-04 of Regulation S-X.

Item 15. Controls and Procedures, page 53

4.	We note your disclosure regarding your disclosure controls
and
procedures.  We have the following comments:
* If true, please confirm to us that your chief executive officer
and
chief financial officer concluded that your disclosure controls
and
procedures are effective to ensure that information required to be
disclosed by the Company in reports that it files under the
Securities Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms
of
the SEC, and that your officers concluded that your disclosure
controls and procedures are also effective to ensure that
information
required to be disclosed in the reports that you file or submit
under
the Exchange Act is accumulated and communicated to your
management,
including your chief executive officer and chief financial
officer,
to allow timely decisions regarding required disclosure.  See
Exchange Act Rule 13a-15(e).  Please revise to comply with the
requirement in future filings.
* If true, please confirm in your response that there have been no
changes in internal control over financial reporting that occurred
during the period covered by the annual report that have
materially
affected, or are reasonably likely to materially affect, your
internal control over financial reporting.  Refer to Item 15(d) of
Form 20-F.  Please revise your future filings to comply with this
disclosure requirement.

Financial Statements

8. Income Taxes, page 66

5.	Please tell us the facts and circumstances that have led to
the
recognition of no deferred tax assets for the two most recent
fiscal
years, and deferred tax liabilities of only $15,000 at March 31,
2004, resulting in nil deferred tax expense for the years ended
March
31, 2003 and 2004, and $15,000 deferred tax expense for the year
ended March 31, 2005.

6.	Please tell us the nature of the line item "Effect of income
for
which no income tax is payable" in your reconciliation table on
page
67.  Citing relevant accounting literature, please also tell us
why
the transactions included in this line do not give rise to
deferred
taxes.

*    *    *    *

      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 response 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 should
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 staff to
be
certain that they provided all information investors require.
Since
the company 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 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.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Jenn Do, Staff Accountant, at (202) 551-
3743,
or me at (202) 551-3255 if you have questions regarding comments
on
the financial statements and related matters.

								Sincerely,

								Nili Shah
								Branch Chief
??

??

??

??

Mr. C.P. Li
Deswell Industries, Inc.
January 30, 2006
Page 4

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

         DIVISION OF
CORPORATION FINANCE

</TEXT>
</DOCUMENT>