DESWELL INDUSTRIES, INC. ACHIEVES RECORD SALES IN JULY 2000

HONG KONG (September 14, 2000) - Deswell Industries, Inc. (Nasdaq Symbol: DSWL) today announced it achieved record monthly sales in July of $7.0 million, a 56% increase over sales of $4.5 million for July 1999.

The substantial increase in sales is mainly attributable to the increase in orders from new and existing customers, an increase in plastic production capacity at the Company’s new Dongguan plants, and the increase in double injection orders. 

Deswell manufactures injection-molded plastic parts and components, 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 Kyocera Mita Industrial Co. (H.K.) Limited, Epson Precision (H.K.) Ltd., Namtai Electronics (Shenzhen) Co. Ltd., Inter-Tel Incorporated Vtech Communications Ltd.

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