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Deswell Announces $4 Million Stock Buyback Plan

Deswell Industries, Inc. (Nasdaq: DSWL) today announced that its board of directors unanimously approved on March 14, 2012, a share repurchase program authorizing Deswell’s management to purchase up to US$4 million of Deswell’s outstanding common shares during the next two years.. The authorized repurchases are to be made from time to time in open-market transactions, in block transactions or through privately negotiated transactions. The timing, volume and nature of share repurchases will be at the sole discretion of management, will be dependent on market conditions and other factors and are intended to be subject to Securities and Exchange Commission (SEC) Rule 10b-18 requirements. It is also expected that such share repurchases will be effected in accordance with a plan in conformity with SEC Rule 10b5-1. The program does not obligate Deswell to acquire any particular number or dollar amount of its common shares and may be suspended, modified, extended or discontinued at any time. No assurance can be given that any particular number or dollar amount of common stock will be repurchased.

"The stock buyback plan affirms our confidence in the long-term prospects for our Company,” stated Franki Tse, chief executive officer. “It is facilitated by our strong capital structure and liquidity and not only does it represent a good investment for our Company, but it also demonstrates our commitment to increase shareholder value.”

As of December 31, 2011, Deswell had approximately $28 million in cash and Deswell intends to use available cash balances to fund the share repurchase program.

About Deswell

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 finished products such as telephones, telephone answering machines, sophisticated studio-quality audio equipment and computer peripherals. The Company’s customers include Vtech Telecommunications Ltd. and Digidesign Inc.

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