DESWELL INDUSTRIES, INC. ANNOUNCES CHANGE IN INDEPENDENT DIRECTOR

HONG KONG (January 4, 2000) - Deswell Industries, Inc. (NASDAQ NM Symbol: DSWL) today announced the following changes to its Board of Directors.

Appointment of Independent Director - Mr. Hung-Hum Leung The Company is pleased to announce that Mr. Hung-Hum Leung was appointed to the Company's Board of Directors and Audit Committee effective December 10, 1999. Mr. Leung, 52, has over twenty-five years of experience in the electronic manufacturing field. He received his Bachelor of Science degree in 1971 from the National Taiwan University. Mr. Leung was the founder of Sharp Brave Holdings Ltd., a Hong Kong public company listed in the Hong Kong Stock Exchange. He was the Chairman of Sharp Brave Holdings Ltd. during 1991 to 1995. Since 1995, Mr. Leung has been an independent consultant to the electronics industry.

Resignation of Independent Director - Mr. W.Y. Kam The Company also regrets to announce that Mr. W. Y. Kam resigned from the Board of Director effective on November 30, 1999 for personal reasons.

Deswell manufactures injection-molded plastic parts and components and electronic products and subassemblies and metallic products for original equipment manufacturers ("OEMs") and contract manufacturers at its factories in the People's Republic of China. The Company produces a wide variety of plastic parts and components used in the manufacture of consumer and industrial products; printed circuit board assemblies using surface mount ("SMT"), and pin-through hole ("PHT") interconnection technologies; and finished products such as telephones, telephone answering machines, sophisticated studio-quality audio equipment and computer peripherals. The Company's customers include Mita Industrial (H.K.) Limited, Namtai Electronics (Shenzhen) Co. Ltd., Inter-Tel Incorporated, Behringer Holdings (Pte) Ltd. and VTech Communications Ltd. To learn more about Deswell Industries, Inc., please visit the Company's web site at www.deswellindustries.com.

To learn more about Deswell Industries, Inc., please visit the Company's web site at www.deswellindustries.com.