DESWELL INDUSTRIES, INC. POSTPONES 2001 ANNUAL SHAREHOLDER MEETING

HONG KONG (September 18, 2001) - Deswell Industries, Inc. (Nasdaq: DSWL) today announced it has postponed its annual shareholder meeting. The event was to be held on September 24, 2001 in Los Angeles. In light of the recent events, the Company is rescheduling the meeting and will issue a release within the next few weeks to provide the details.

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., Peavey Electronics Corporation and Emerson.

Contact:
John G. Nesbett
Lippert/Heilshorn & Associates, Inc.
212-838-3777, ext. 6631
e-mail: jgn@lhai.com