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                                                                    EXHIBIT 11.1

                            DESWELL INDUSTRIES, INC.

        CODE OF ETHICS FOR CHIEF EXECUTIVE AND SENIOR FINANCIAL OFFICERS

         Deswell Industries, Inc, is committed to conducting its business in
accordance with applicable laws, rules and regulations and the highest standards
of business ethics and to full and accurate financial disclosure in compliance
with applicable law. This Code of Ethics, applicable to the Company's Chairman,
Chief Executive Officer, President, Chief Financial Officer and Chief Accounting
Officer (or persons performing similar functions including financial controllers
and treasurers), and those persons listed each year in the Company's Annual
Report on Form 20-F as an officer of a subsidiary of the Company (together,
"SENIOR OFFICERS"), sets forth specific policies to guide you in the performance
of your duties.

         As a Senior Officer, you must not only comply with applicable law. You
also have a responsibility to conduct yourself in an honest and ethical manner;
and you have leadership responsibilities that include creating a culture of high
ethical standards and commitment to compliance, maintaining a work environment
that encourages employees to raise concerns, and promptly addressing employee
compliance concerns.

         This Code of Ethics is intended to supplement any code of business
conduct and ethics that may be adopted by the Company, if so adopted. You will
also be bound by the requirements and standards set forth in any such code of
business conduct and ethics, if adopted, as well as those set forth in this Code
of Ethics and other applicable policies and procedures.

COMPLIANCE WITH LAWS, RULES AND REGULATIONS

         You are required to comply with the laws, rules and regulations that
govern the conduct of our business and to report any suspected violations in
accordance with the section below entitled "Compliance with Code of Ethics."

CONFLICTS OF INTEREST

         A conflict of interest occurs when your private interests interfere in
any way, or even appear to interfere, with the interests of the Company. Your
obligation to conduct the Company's business in an honest and ethical manner
includes the ethical handling of actual or apparent conflicts of interest
between personal and business relationships.

         Before making any investment, accepting any position or benefits,
participating in any transaction or business arrangement or otherwise acting in
a manner that creates or appears to create a conflict of interest, you must make
full disclosure of all facts and circumstances to, and obtain the written
approval of, the Chair of the Audit Committee of the Board of Directors, or if
the Chair of the Audit Committee is not available within a reasonable period of
time, then any member of the Audit Committee.

DISCLOSURES

         It is Company policy to make full, fair, accurate, timely and
understandable disclosure in compliance with all applicable laws and regulations
in all reports and documents that the Company files with, or submits to, the
Securities and Exchange Commission and in all other public communications made
by the Company. As a Senior Officer, you are required to promote compliance
policy by all employees and to abide by Company standards, policies and
procedures designed to promote compliance with this policy.

COMPLIANCE WITH THE CODE OF ETHICS

         If you know of or suspect a violation of applicable laws, rules or
regulations or this Code of Ethics, you must immediately report that information
to any member of the Audit Committee of the Board of Directors. No one will be
subject to retaliation because of a good faith report of a suspected violation.

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         Violations of this Code of Ethics may result in disciplinary action, up
to and including discharge, The Audit Committee of the Board of Directors shall
determine, or shall designate appropriate persons to determine, appropriate
action in response to violations of this Code.

WAIVERS OF THE CODE OF ETHICS

         If you would like to seek a waiver of the Code of Ethics you must make
full disclosure of your particular circumstances to the Chairman of the Audit
Committee of the Board of Directors.

NO RIGHTS CREATED

         This Code of Ethics is a statement of certain fundamental principles,
policies and procedures that govern the Company's Senior Officers in the conduct
of Deswell's business, It is not intended to and does not create any rights in
any employee, customer, supplier, competitor, shareholder or any other person or
entity.