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UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549




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Form 10-K/A

Amendment No. 1


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended December 31,
    2003                                             
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to          .                                  

Commission File Number 0-26660



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ESS Technology, Inc.

(Exact name of Registrant as specified in its
charter)


|                                                                                         |  |                                         
|---------------------------------------------------------------------------------------- |  | ----------------------------------------
|California                                                                               |  | 94-2928582                              
|(State or other jurisdiction of
    incorporation or organization)                       |  | (I.R.S. Employer
    Identification No.)
|                                                                                        
|48401 Fremont Blvd.,
    Fremont, California(Address of principal executive
    offices) |  | 94538(Zip Code)                         

Registrants telephone number, including
area code:

(510) 492-1088


Securities registered pursuant to
Section 12(b) of the Act:

None


Securities registered pursuant to
Section 12(g) of the Act:

Common Stock, no par value


(Title of Class)


Indicate by check
mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) 
 of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant

 was required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days.     Yes þ          No o

Indicate by check
mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the registrants
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this
Form 10-K or any amendment to this
Form 10-K.     o

Indicate by check
mark whether the registrant is an accelerated filer (as defined
in Rule 12b-2 of the
Act).     Yes þ          No o

The aggregate
market value of the voting and non-voting common equity held by
non-affiliates of the registrant, computed by reference to
$9.75, the closing price of ESS Technology, Inc.s common
stock as reported on the Nasdaq National Market on June 30,
2003, the last business day of the registrants most
recently completed second fiscal quarter, was approximately
$255,185,316. The aggregate market value of the voting stock
held by non-affiliates of the registrant as of December 31,
2003, based upon the closing sale price of $17.03, reported by
the Nasdaq National Market on that date, was approximately
$475,319,885. Shares of common stock held by each officer and
director and by each person who owned 5% or more of the
registrants outstanding common stock on that date have
been excluded in that such persons may be deemed to be
affiliates. This determination of affiliate status is not
necessarily a conclusive determination for other purposes.

As of
April 28, 2004, the registrant had approximately
39,367,511 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.



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EXPLANATORY NOTE

ESS Technology, Inc. (the Company,
ESS, we, us or
our) is filing this Amendment No. 1 on
Form 10-K/ A to our Annual Report on Form 10-K for the
fiscal year ended December 31, 2003 (the
Report) for the purpose of including information
that was to be incorporated by reference from our definitive
proxy statement pursuant to Regulation 14A of the
Securities and Exchange Act of 1934. We will not file our proxy
statement within 120 days of our fiscal year ended
December 31, 2003, and are, therefore, amending and
restating in their entirety Items 10, 11, 12, 13 and 14 of
Part III of the Report. This Amendment also reflects a
correction to a typographical error in Item 12.
Specifically, in the Equity Compensation Plan Information table
in Item 12, the total for Number of Securities Remaining
Available for Future Issuance Under Equity Compensation Plans
(excluding securities reflected in column (a)) is 5,052,546
and not 5,552,546. In addition, in connection with the filing of
this Amendment and pursuant to Rules 12b-15 and 13a-14
under the Securities Exchange Act of 1934, as amended, we are
including with this Amendment certain currently dated
certifications. Except as described above, no other amendments
are being made to the Report. This Form 10-K/ A does not
reflect events occurring after the March 15, 2004 filing of
our Report, modify or update the disclosure contained in the
Report in any way other than as required to reflect the
amendments discussed above and reflected below.



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ESS TECHNOLOGY, INC.

TABLE OF CONTENTS






|             |  |                                                                      |  |      |    | 
|------------ |  | -------------------------------------------------------------------- |  | ---- | -- | 
|             |  |                                                                      |  | Page
|             |  |                                                                      |  |     
|PART III     |  |                                                                      |  |     
|Item 10.     |  | Directors and Executive
    Officers of the Registrant               |  |      | 2  | 
|Item 11.     |  | Executive Compensation                                               |  |      | 4  | 
|Item 12.     |  | Security Ownership of
    Certain Beneficial Owners and Management   |  |      | 12 | 
|Item 13.     |  | Certain Relationships and
    Related Transactions                   |  |      | 14 | 
|Item 14.     |  | Principal Accountant Fees
    and Services                           |  |      | 15 | 
|PART IV      |  |                                                                      |  |     
|Item 15.     |  | Exhibits, Financial
    Statement Schedules, and Reports on Form 8-K |  |      | 16 | 
|Signature    |  |                                                                      |  |      | 17 | 
|EXHIBIT 31.1
|EXHIBIT 31.2



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##### Table of Contents






PART III






|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors and Executive Officers of the
    Registrant

Our current directors were elected at the 2003
annual meeting of shareholders to serve as directors until the
2004 annual meeting of shareholders, until their respective
successors have been elected and qualified or until such
directors earlier resignation or removal. The information
of members of the Board of Directors as of March 15, 2004
is set forth below:

|                      |  |     |    |                      |  |                                                                                                             |  |  |      | 
|--------------------- |  | --- | -- | -------------------- |  | ----------------------------------------------------------------------------------------------------------- |  |  | ---- | 
|                      |  |     |    |                      |  | Director                                                                                                   
|Name of Nominee       |  | Age |    | Principal Occupation |  | Since                                                                                                      
|                      |  |     |    |                      |  |                                                                                                            
|Fred S.L. Chan        |  |     | 57 |                      |  | Chairman of the Board of Directors of the Company                                                           |  |  | 1986 | 
|Robert L. Blair       |  |     | 56 |                      |  | President and Chief Executive Officer of the
    Company                                                    |  |  | 1999 | 
|Peter T. Mok(1)(2)(3) |  |     | 50 |                      |  | President and CEO of KLM Capital Management,
    Inc.                                                       |  |  | 1993 | 
|Dominic Ng(1)         |  |     | 45 |                      |  | Chairman, President and CEO of East West BanCorp                                                            |  |  | 1998 | 
|David S. Lee(1)(2)(3) |  |     | 66 |                      |  | Chairman of the Board for eOn Communications
    Corporation, Cortelco and Cidco Communications Corporation |  |  | 2000 | 
|Alfred J. Stein(1)    |  |     | 71 |                      |  | Director of Advanced Power Technology                                                                       |  |  | 2003 | 



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|    |                                                                              
|--- | -----------------------------------------------------------------------------
|(1) | Member of the Audit Committee of the Board.                                  
|   
|(2) | Member of the Compensation Committee of the Board.                           
|   
|(3) | Member of the Corporate Governance and Nominating
    Committee of the Board.

Except as set forth below, each of the directors
has been engaged in the principal occupation set forth next to
his name above during the past five years. There are no family
relationships among any of the directors or executive officers
of the Company.

Fred S.L. Chanhas
been a director since January 1986 and has served as our
Chairman of the Board since October 1992. Mr. Chan is also
the Chairman of the Board for Vialta, Inc. (Vialta)
and has served in that capacity since September 1999.
Mr. Chan served as President and Chief Executive Officer of
Vialta from September 1999 to August 2001. Mr. Chan served
as our President from November 1985 until October 1996 and from
February 1997 to September 1999. He served as our Chief
Executive Officer from June 1994 until September 1999.
Mr. Chan served as our Chief Financial Officer from October
1992 to May 1995. From 1984 to 1985, Mr. Chan was founder,
President and Chief Executive Officer of AC Design, Inc., a VLSI
chip design center that provides computer aided design (CAD),
engineering and other design services. From 1982 to 1984, he was
co-founder, President and Chief Executive Officer of CADCAM
Technology, Inc., a company in the business of computer aided
engineering (CAE) systems development. Mr. Chan holds
B.S.E.E. and M.S.C. degrees from the University of Hawaii.
Mr. Chan is the spouse of Annie M.H. Chan, a former
director of the Company.

Robert L. Blairhas
been our President and Chief Executive Officer since September
1999. Mr. Blair was elected as a director in 1999.
Mr. Blair served as our Executive Vice President of
Operations from April 1997 to September 1999. From December 1994
to March 1997, he was our Vice President of Operations. From
December 1991 to November 1994, he was Senior Vice President of
Operations (Software Packaging & Printing Division) of
Logistix Corporation, a software turnkey company, and from 1989
to November 1991, he was Vice President and co-owner of Rock
Canyon Investments, a real estate development-planning firm in
California. From 1986 to 1989, he held various positions at
Xidex Corporation, a computer diskette manufacturer, including
President and General Manager at XEMAG, a division of Xidex
Corporation. From

2



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1973 to 1986, he held several positions including
Vice President, High Reliability Operations at Precision
Monolithics, Inc.


Peter T. Mokhas
served as a director since May 1993. Mr. Mok is currently
the President and Chief Executive Officer of KLM Capital
Management, Inc., a venture capital management company, and has
served in that capacity since July 1996. From July 1994 to July
1996, Mr. Mok was Senior Manager, Investment Banking, of
DBS Ltd. From June 1992 to July 1994, he was Senior Vice
President, Manager and a director of Transpac Capital, Inc., a
venture capital management company that is a wholly owned
subsidiary of Transpac. Mr. Mok holds a B.S. degree in
Business Administration from San Jose State University.
Mr. Mok also serves on the boards of several private
companies.

Dominic Nghas
served as a director since May 1998. Mr. Ng is Chairman,
President and Chief Executive Officer of East West BanCorp and
has served in that capacity since 1998. He has been the
President and CEO of East West BanCorp since 1992. Prior to
joining the Bank, he served as President of Seyen
Investment, Inc. Mr. Ng is also a member of the Board
of PacifiCare Health Systems.

David S. Leehas
served as a director since March 2000. Mr. Lee is currently
the Chairman of the Board for eOn Communications Corporation,
Cortelco and Cidco Communications Corporation. Prior to that, he
served as President and Chairman of Data Technology Corporation,
which he bought and merged with Qume Corporation in 1988. From
1983 to 1985, he served as Vice President of ITT and as Group
Executive and Chairman of its Business Information Systems
Group. Mr. Lee held positions of Executive Vice President
of ITT Qume from 1978 to 1981 and President from 1981 to 1983.
Mr. Lee co-founded Qume Corporation in 1973 and served as
Executive Vice President until it was acquired by ITT
Corporation in 1978. Mr. Lee currently serves on the Board
of Directors for the following business related
ventures: iBasis Inc., Linear Technology Corporation,
Accela Inc., Daily Wellness Co. as well as numerous non-business
related ventures. He was an advisor to both President Bush and
President Clinton through the Advisory Committee on Trade Policy
and Negotiation and additionally to Governor Pete Wilson through
the California Economic Development Corporation. He currently is
a member of the Presidents council on the
21st Century Workforce, appointed by President George
Bush, Jr. Mr. Lee is also a Regent of the University
of California.

Alfred J. Steinis
an independent consultant to technology companies and has spent
more than 45 years in the semiconductor industry. From 1982
until 1999 Mr. Stein served as Chairman of the Board and
Chief Executive Officer of VLSI Technology, Inc., which was
acquired by Philips Electronics in 1999. Previously,
Mr. Stein served as Chief Executive Officer of Arrow
Electronics, Vice President and Assistant General Manager of
Motorolas Semiconductor Sector, and Vice President and
General Manager for the Electronics Devices Division of Texas
Instruments. Currently, Mr. Stein serves on the boards of
Advanced Power Technology, Electronics Boutique and several
private startup companies. Mr. Stein holds a
B.S. degree in physics from St. Marys University
of Texas and an M.S. degree in mathematics from Southern
Methodist University.

Information concerning our executive officers
required by this Item is incorporated by reference from the
section captioned Executive Officers of the
Registrant set forth at the end of Part I.

Audit Committee and Audit Committee Financial
Expert

The Board has a standing Audit Committee. The
Board has affirmatively determined that each director who serves
on the Audit Committee is independent, as the term is defined by
applicable Nasdaq and Securities and Exchange Commission
(SEC) rules. During 2003, the Audit Committee of the
Board of Directors of the Company consisted of David Lee, Peter
Mok, Alfred Stein and Dominic Ng. Mr. Ng, the Chairman of
the Audit Committee, was also an audit committee financial
expert as defined by SEC rules.

Section 16(a) Beneficial Ownership
Reporting Compliance

Section 16 of the Securities Exchange Act of
1934 requires the Companys directors and officers, and
persons who own more than 10% of the Companys common stock
to file initial reports of ownership and

3



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##### Table of Contents



reports of changes in ownership with the SEC and
the Nasdaq National Market. Such persons are required by SEC
regulation to furnish the Company with copies of all
Section 16(a) forms that they file.


Based solely on its review of the copies of such
forms furnished to the Company and written representations from
the executive officers and directors, the Company believes that
all Section 16(a) filing requirements for the year ended
December 31, 2003 were satisfied on a timely basis, except
that Patrick Ang and James B. Boyd each inadvertently filed a
late Form 4 in June 2003, reporting a stock option grant
received in May 2003.

Code of Ethics

The Company has adopted a Code of Ethics that
applies to all of its employees including its principal
executive officer, principal financial and accounting officer,
controller and certain other senior financial management. The
Code of Ethics is posted on the Companys website at
http://www.ESSTECH.com. If any substantive amendments are
made to the Code of Ethics or grant of any waiver, including any
implicit waiver, from a provision of the Code of Ethics to the
Companys Chief Executive Officer, Chief Financial Officer
or Controller, the Company will disclose the nature of such
amendment or waiver on its website or in a report on
Form 8-K.






|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

Summary Compensation Table

The following table shows the
(1) compensation earned by the individual who served as the
Companys Chief Executive Officer during the fiscal year
ended December 31, 2003 and each of the other most highly
compensated individuals who served as an executive officer of
the Company during the fiscal year ended December 31, 2003
(the Named Executive Officers), and (2) the
compensation received by each such individual for the
Companys two preceding fiscal years where applicable.

|                            |                            |             |      |                     |  |              |         |                 |  |             |         |         |  |   |    |       |  |  |         |         | 
|--------------------------- | -------------------------- | ----------- | ---- | ------------------- |  | ------------ | ------- | --------------- |  | ----------- | ------- | ------- |  | - | -- | ----- |  |  | ------- | ------- | 
|                            |                            |             |      |                     |  |              |         |                 |  | Long Term  
|                            |                            |             |      |                     |  | Compensation
|                            |                            |             |      | Annual Compensation |  |             
|                            |                            |             |      |                     |  | Securities  
|                            |                            |             |      |                     |  | Other Annual |         | Underlying     
|Name and Principal Position |                            | Fiscal Year |      | Salary              |  | Bonus        |         | Compensation(1) |  | Options (#)
|                            |                            |             |      |                     |  |              |         |                 |  |            
|Fred S.L. Chan              |                            |             | 2003 |                     |  | $            | 328,000 |                 |  | $           | 662,000 |         |  | $ | 64 |       |  |  |        |        
|                            | Chairman of the Board of   |             |      | 2002                |  |              | $       | 213,830         |  |             |         |        |  |   | $  | 1,032 |  |  |         | 140,000 | 
|                            | Directors                  |             |      | 2001                |  |              | $       | 248,000         |  |             | $       | 260,000 |  |   | $  | 966   |  |  |         | 590,000 | 
|Robert L. Blair             |                            |             | 2003 |                     |  | $            | 328,000 |                 |  | $           | 150,000 |         |  | $ | 64 |       |  |  | 400,000 |        
|                            | President and CEO          |             |      | 2002                |  |              | $       | 328,756         |  |             |         |        |  |   | $  | 828   |  |  |         | 160,000 | 
|                            |                            |             |      | 2001                |  |              | $       | 260,000         |  |             | $       | 260,000 |  |   | $  | 966   |  |  |         | 168,000 | 
|Patrick Ang                 |                            |             | 2003 |                     |  | $            | 200,000 |                 |  |             |        |         |  | $ | 15 |       |  |  | 40,000  |        
|                            | COO and Executive Vice     |             |      | 2002                |  |              | $       | 200,000         |  |             |         |        |  |   | $  | 360   |  |  |         | 30,000  | 
|                            | President                  |             |      | 2001                |  |              | $       | 9,103           |  |             |         |        |  |   | $  | 35    |  |  |         | 200,000 | 
|James B. Boyd               |                            |             | 2003 |                     |  | $            | 198,333 |                 |  | $           | 50,000  |         |  | $ | 34 |       |  |  | 40,000  |        
|                            | CFO, Senior Vice President |             |      | 2002                |  |              | $       | 184,583         |  |             |         |        |  |   | $  | 820   |  |  |         | 30,000  | 
|                            | and Assistant Secretary    |             |      | 2001                |  |              | $       | 170,000         |  |             | $       | 51,000  |  |   | $  | 522   |  |  |         | 190,000 | 



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|    |                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes dollar value of premiums paid by the
    Company under the Companys group term life insurance
    policy and accidental death and dismemberment policy on behalf
    of each Named Executive Officer.

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Stock Option Grants in Last Fiscal
Year

The following table provides certain information
with respect to stock options granted to the Named Executive
Officers in the last fiscal year. In addition, as required by
SEC rules, the table sets forth the hypothetical gains that
would exist for the options based on assumed rates of annual
compound stock price appreciation during the option term.

|                   |  |                      |         |                               |  |             |     |                              |  |                |      |        |  |  |      |  |  |   |           |  |  |   |           | 
|------------------ |  | -------------------- | ------- | ----------------------------- |  | ----------- | --- | ---------------------------- |  | -------------- | ---- | ------ |  |  | ---- |  |  | - | --------- |  |  | - | --------- | 
|                   |  |                      |         |                               |  |            
|                   |  | Individual Grants(1) |         |                              
|                   |  |                      |         | Potential Realizable Value at
|                   |  | Number of            |         | Percent of Total              |  |             |     | Assumed Annual Rates of     
|                   |  | Securities           |         | Options/SARs                  |  |             |     | Stock Price Appreciation for
|                   |  | Underlying           |         | Granted to                    |  | Exercise of |     |                              |  | Option Term(2)
|                   |  | Options/SARs         |         | Employees in                  |  | Base Price  |     | Expiration                   |  |               
|Name               |  | Granted(#)           |         | Fiscal Year(%)(3)             |  | ($/SH)(4)   |     | Date                         |  | 5%($)          |      | 10%($)
|                   |  |                      |         |                               |  |             |     |                              |  |                |      |       
|Fred S.L. Chan     |  |                      |        |                               |  |             |    |                              |  |                |     |        |  |  |     |  |  |   |          |  |  |   |          | 
|Robert L. Blair(5) |  |                      | 375,590 |                               |  |             | 15% |                              |  | $              | 9.78 |        |  |  | 2013 |  |  | $ | 2,310,100 |  |  | $ | 5,854,247 | 
|Robert L. Blair(6) |  |                      | 24,410  |                               |  |             | 1%  |                              |  | $              | 9.78 |        |  |  | 2013 |  |  | $ | 150,136   |  |  | $ | 380,474   | 
|Patrick Ang(7)     |  |                      | 40,000  |                               |  |             | 2%  |                              |  | $              | 7.62 |        |  |  | 2013 |  |  | $ | 191,687   |  |  | $ | 485,773   | 
|James B. Boyd(8)   |  |                      | 40,000  |                               |  |             | 2%  |                              |  | $              | 7.62 |        |  |  | 2013 |  |  | $ | 191,687   |  |  | $ | 485,773   | 



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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | No stock appreciation rights were granted to the
    Named Executive Officers in the last fiscal year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(2) | The potential realizable value illustrates value
    that might be realized upon exercise of the options immediately
    prior to the expiration of their terms, assuming the specified
    compounded rates of appreciation of the market price per share
    for the date of grant to the end of the option term. Actual
    gains, if any, on stock option exercise are dependent upon a
    number of factors, including the future performance of the
    common stock and the timing of option exercises, as well as the
    optionees continued employment throughout the vesting
    period. There can be no assurance that the amounts reflected in
    this table will be achieved. Potential realizable value is not
    calculated for options that were canceled during the fiscal year
    ended 2003.
|   
|(3) | The Company granted stock options representing
    2,494,600 shares to employees in the last fiscal year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(4) | The exercise price may be paid in cash, in shares
    of common stock valued at fair market value on the exercise date
    or through a cashless exercise procedure involving a same-day
    sale of the purchased shares, to the extent permissible under
    applicable law.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(5) | 93,897 shares shall vest on July 8,
    2004; 1/48th of 375,590 shares shall vest monthly on the
    8th day of each month commencing on August 8, 2004 through
    July 8, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(6) | 6,103 shares shall vest on July 8,
    2004; 1/48th of the 24,410 shares shall vest monthly on the
    8th day of each month commencing on August 8, 2004 through
    July 8, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(7) | 1/48th of the 40,000 shares shall vest
    monthly on the 23rd day of each month commencing on
    June 23, 2004 through May 23, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(8) | 1/48th of the 40,000 shares shall vest
    monthly on the 23rd day of each month commencing on
    June 23, 2004 through May 23, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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Aggregate Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values

The following table sets forth certain
information concerning the exercise of options by each of the
Named Executive Officers during fiscal year 2003, including the
aggregate amount of gains on the date of exercise. In addition,
the table includes the number of shares covered by both
exercisable and unexercisable stock options as of
December 31, 2003. Also reported are values of
in-the-money options that represent the positive
spread between the respective exercise prices of outstanding
stock options and $17.03 per share, which was the closing
price of the Companys common stock as reported on the
Nasdaq National Market on December 31, 2003.

|                |  |             |   |             |  |                        |   |                       |  |             |         |               |  |  |         |  |  |   |           |  |  |   |           | 
|--------------- |  | ----------- | - | ----------- |  | ---------------------- | - | --------------------- |  | ----------- | ------- | ------------- |  |  | ------- |  |  | - | --------- |  |  | - | --------- | 
|                |  |             |   |             |  |                        |   |                       |  |            
|                |  |             |   |             |  | Number of Securities   |   |                      
|                |  |             |   |             |  | Underlying Unexercised |   | Value of Unexercised 
|                |  |             |   |             |  | Options at Fiscal      |   | In-the-Money Options 
|                |  | Shares      |   |             |  | Year-End (#)           |   | at Fiscal Year-End(2)
|                |  | Acquired on |   | Value       |  |                        |   |                      
|Name            |  | Exercise    |   | Realized(1) |  | Exercisable            |   | Unexercisable         |  | Exercisable |         | Unexercisable
|                |  |             |   |             |  |                        |   |                       |  |             |         |              
|Fred S.L. Chan  |  |             |  |             |  |                        |  |                       |  |             | 453,333 |               |  |  | 276,667 |  |  | $ | 5,363,297 |  |  | $ | 2,349,277 | 
|Robert L. Blair |  |             |  |             |  |                        |  |                       |  |             | 331,723 |               |  |  | 670,999 |  |  | $ | 2,667,173 |  |  | $ | 4,497,175 | 
|Patrick Ang     |  |             |  |             |  |                        |  |                       |  |             | 108,333 |               |  |  | 161,667 |  |  | $ | 739,914   |  |  | $ | 1,092,786 | 
|James B. Boyd   |  |             |  |             |  |                        |  |                       |  |             | 122,500 |               |  |  | 117,500 |  |  | $ | 1,488,987 |  |  | $ | 1,044,063 | 



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|    |                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Value Realized represents the fair
    market value of the shares of common stock underlying the option
    on the date of exercise less the aggregate exercise price of the
    option.                                                                                                                                                                                          
|   
|(2) | These values, unlike the amounts set forth in the
    column entitled Value Realized, have not been, and
    may never be, realized and are based on the positive spread
    between the respective exercise prices of outstanding options
    and the closing price of the Companys common stock on
    December 31, 2003, the last day of trading for the fiscal
    year 2003.

Compensation of Directors

Directors of the Company do not receive cash
compensation for their services, except that non-employee
directors currently receive the quarterly retainer and meeting
fees indicated below. The directors are also reimbursed for
their reasonable expenses in attending meetings of the Board of
Directors.

|                                         |                        |   |       |       | 
|---------------------------------------- | ---------------------- | - | ----- | ----- | 
|Quarterly Retainer                       |                        | $ | 5,000 |      
|Meeting Fee*                             |                        | $ | 2,000 |      
|Additional Quarterly Committee Retainer: |                        |   |       |      
|                                         | Audit Committee Chair  |   | $     | 4,000 | 
|                                         | Audit Committee Member |   | $     | 2,000 | 
|                                         | Other Committee Chair  |   | $     | 500   | 



---



|  |                                                          
|- | ---------------------------------------------------------
|* | $1,000 for each meeting attended via conference
    call.

Effective April 24, 2004, non-employee
directors receive the quarterly retainer and meeting fees
indicated below:

|                                         |                        |   |       |       | 
|---------------------------------------- | ---------------------- | - | ----- | ----- | 
|Quarterly Retainer                       |                        | $ | 5,000 |      
|Scheduled Meeting Fee*                   |                        | $ | 2,000 |      
|Special Meeting Fee**                    |                        | $ | 500   |      
|Additional Quarterly Committee Retainer: |                        |   |       |      
|                                         | Audit Committee Chair  |   | $     | 4,000 | 
|                                         | Audit Committee Member |   | $     | 2,000 | 
|                                         | Other Committee Chair  |   | $     | 1,000 | 
|                                         | Other Committee Member |   | $     | 500   | 

6



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##### Table of Contents





---



|  |                                                                    
|- | -------------------------------------------------------------------
|* | $1,000 for each scheduled meeting attended via
    conference call.



|   |                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------
|** | For each special meeting, attended in person or
    via conference call, where board actions are required

Non-employee directors of the Company are
automatically granted options to purchase shares of the
Companys common stock pursuant to the terms of the
Companys 1995 Directors Stock Option Plan (the
Directors Plan). Each non-employee director upon
becoming a member of the Board is granted an option to
purchase 40,000 shares of common stock under the
Directors Plan (the Initial Grant). Thereafter, on
the date of the annual meeting of shareholders each year, each
non-employee director who will continue as a director is
automatically granted an additional option to
purchase 10,000 shares of common stock under the
Directors Plan (the Subsequent Grant), provided the
director has then served for six (6) months. Options
granted under the Directors Plan have an exercise price equal to
the fair market value of the Companys common stock on the
date of grant with a term of no more than ten years. The fair
market value of the common stock is determined based on the
closing sales price on the Nasdaq National Market on the date of
grant. Initial Grants become exercisable with respect to 25% of
the shares on the first anniversary of the date of grant and
with respect to 1/48th of the shares on the same date of each
succeeding month. Subsequent Grants vest and become exercisable
with respect to 1/48th of the shares on the same date as the
date of grant each month following the grant.

On the date of each annual meeting of
shareholders, each member of the Audit Committee (including the
Chairman) is granted an additional option to
purchase 5,000 shares of common stock, vesting ratably
over 12 months so long as he or she continuously serves as
a member of the Audit Committee. In addition, the Chairman of
the Audit Committee is granted an additional option to
purchase 5,000 shares of common stock, vesting ratably
over 12 months so long as he or she continuously serves as
a member of the Audit Committee. Initially, such grants are pro
rated based on the number of months a member serves prior to
receiving their first annual grant. Directors joining the Audit
Committee between annual meetings of shareholders receive a pro
rated Audit Committee grant. These options have an exercise
price equal to the fair market value of the Companys
common stock on the date of grant with a term of ten years. The
fair market value of the common stock is determined based on the
closing sales price on the Nasdaq National Market on the date of
grant.

Compensation Committee Interlocks and Insider
Participation

The Compensation Committee of the Board of
Directors currently consists of David Lee and Peter Mok. No
member of the Compensation Committee or executive officers of
the Company has a relationship that would constitute an
interlocking relationship with executive officers or directors
of another entity.

Report of the Compensation Committee on
Executive Compensation



| |        
| | -------
| | General

The Compensation Committee, consisting entirely
of independent directors as defined by Nasdaq rules, acts on
behalf of the Board to establish the general compensation policy
of the Company for all employees of the Company. The
Compensation Committee administers the Companys incentive
and equity plans, including the 1995 Equity Incentive Plan, the
1995 Employee Stock Purchase Plan, the 1997 Equity Incentive
Plan and the 2002 Non-Executive Stock Option Plan. The
Compensation Committee also reviews compensation for the
executive officers of the Company, including its Chairman, CEO
and other executive officers named in the Summary Compensation
Table (the Named Executive Officers).

It is the Compensation Committees
philosophy to link the Named Executive Officers
compensation to corporate performance. Thus, under the
Companys compensation policy, a designated portion of the
Named Executive Officers total compensation is tied to the
Companys performance objectives and individual objectives
set forth at the beginning of the Companys fiscal year.
The base salary, target bonuses, target total cash compensation
and stock option grants of the Named Executive Officers are
determined in part by the Compensation Committee reviewing data
on prevailing compensation practices of comparable technology
companies, with whom the Company competes for executive talent,
and evaluating such information in connection with the
Companys corporate goals. The Named Executive
Officers performance is measured

7



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##### Table of Contents



against objectives established for the Named
Executive Officers, as determined by the Compensation Committee
in its discretion.


In addition to their base salary, the
Companys Named Executive Officers are eligible to receive
cash bonuses and to participate in the 1995 Equity Incentive
Plan, the 1995 Employee Stock Purchase Plan and the 1997 Equity
Incentive Plan. Long-term equity incentives for the Named
Executive Officers are achieved through the granting of stock
options under the 1995 Equity Incentive Plan and the 1997 Equity
Incentive Plan. Stock options have value for the Named Executive
Officers only if the price of the Companys stock increases
above the fair market value on the date of grant and the Named
Executive Officers remain in the Companys employ for the
period required for the shares to vest.



| |                                       
| | --------------------------------------
| | Compensation of Executive
    Officers

During the fiscal year that ended on
December 31, 2003, the Companys executive
compensation program was comprised of the following key
components: base salary, annual bonus and equity-based
incentives.

Base Salary.Base
salaries for the Companys executive officers other than
the CEO are based upon recommendations by the CEO, taking into
account such factors as salary norms in comparable companies, a
subjective assessment of the nature of the position and the
contribution and experience of the officer.

Annual Bonus.The
Companys cash bonus program seeks to motivate executive
officers to work effectively to achieve the Companys
financial performance objectives and to reward them when such
objectives are met.

Equity-Based Incentive
Compensation.Stock options are an
important component of the total compensation of executive
officers. The Company believes that stock options align the
interests of each executive with those of the shareholders. They
also provide executive officers a significant, long-term
interest in the Companys success and help retain key
executive officers in a competitive market for executive talent.
The Companys 1995 Equity Incentive Plan and 1997 Equity
Incentive Plan authorize the Compensation Committee to grant
stock options to executive officers. The number of shares owned
by, or subject to options held by, each executive officer is
periodically reviewed and additional awards are considered based
upon past performance of the executive and the relative holdings
of other executive officers in the Company. The option grants
generally utilize four-year vesting periods to encourage
executive officers to continue contributing to the Company, and
they expire not later than ten years from the date of grant.



| |                                                
| | -----------------------------------------------
| | Compensation of the Chief Executive
    Officer

The Companys compensation plan for the CEO
includes the same elements and performance measures as the plans
of the Companys other executive officers, except the CEO
does not make recommendations to the Compensation Committee
regarding his own base salary. The Compensation Committee
evaluates the performance of the Companys CEO, sets his
base compensation and determines bonuses and awards stock or
option grants, if any. Mr. Blairs base salary for
fiscal year 2003 was $328,000 compared to $328,756 for fiscal
year 2002. Mr. Blairs bonus for fiscal year 2003 was
$150,000 compared to $0 for fiscal year 2002.

8



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##### Table of Contents





| |                                            
| | -------------------------------------------
| | Deductibility of Executive
    Compensation

The Compensation Committee has considered the
impact of Section 162(m) of the Internal Revenue Code of
1986, as amended, which disallows a deduction for any publicly
held corporation for individual compensation exceeding
$1 million in any taxable year for the CEO and the four
other most highly compensated executive officers, unless such
compensation meets the requirements for the
performance-based exception to the general rule.
Since the cash compensation paid by the Company to each of its
executive officers is expected to be below $1 million, the
Compensation Committee believes that this section will not
affect the tax deductions available to the Company. It will be
the Compensation Committees policy to qualify, to the
extent reasonable, the executive officers compensation for
deductibility under applicable tax law.



| |                       
| | ----------------------
| | Compensation Committee
|
| | David S. Lee, Chairman
| | Peter T. Mok          

9



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##### Table of Contents



PERFORMANCE GRAPH

The following graph shows a comparison of the
five-year cumulative total return for the Companys common
stock, Nasdaq Stock Market (US) Index and the RDG Technology
Composite Index (a published industry index). The graph assumes
the investment of $100 in the Companys common stock and in
each of the indexes on December 31, 1998, and reinvestment
of all dividends. The stock price performance on the following
graph is not necessarily indicative of future stock price
performance.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL
RETURN

AMONG ESS TECHNOLOGY, INC., THE NASDAQ STOCK
MARKET (U.S.) INDEX


AND THE RDG TECHNOLOGY COMPOSITE
INDEX


(COMPARISON CHART)

STOCK PRICE PERFORMANCE

December 31, 1998 
December 31, 2003


|                           |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|-------------------------- |  | ----- | ------ | ---- |  | ---- | ------ | ---- |  | ----- | ------ | ---- |  | ---- | ------ | ---- |  | ----- | ------ | ---- |  | ---- | ------ | ---- |  | ----- | ------ | ---- |  | ---- | ------ | ---- |  | ----- | ------ | ---- |  | ---- | ------ | ---- |  | ----- | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ | 
|                          
|                          
|DATE                       |  | 12/98 |        | 3/99 |  | 6/99 |        | 9/99 |  | 12/99 |        | 3/00 |  | 6/00 |        | 9/00 |  | 12/00 |        | 3/01 |  | 6/01 |        | 9/01 |  | 12/01 |        | 3/02 |  | 6/02 |        | 9/02 |  | 12/02 |        | 3/03 |  | 6/03 |        | 9/03 |  | 12/03
|                          
|                          
|ESS TECHNOLOGY, INC.       |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Investment Value           |  |       | 100.00 |      |  |      | 103.12 |      |  |       | 268.75 |      |  |      | 265.00 |      |  |       | 443.76 |      |  |      | 350.00 |      |  |       | 290.00 |      |  |      | 286.26 |      |  |       | 102.50 |      |  |      | 115.00 |      |  |       | 212.00 |  |  |  | 204.40 |  |  |  | 425.20 |  |  |  | 414.80 |  |  |  | 350.80 |  |  |  | 123.00 |  |  |  | 125.80 |  |  |  | 119.20 |  |  |  | 195.00 |  |  |  | 215.60 |  |  |  | 340.60 | 
|NASDAQ STOCK MARKET (U.S.) |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Investment Value           |  |       | 100.00 |      |  |      | 112.52 |      |  |       | 123.11 |      |  |      | 129.54 |      |  |       | 192.96 |      |  |      | 228.23 |      |  |       | 200.45 |      |  |      | 188.13 |      |  |       | 128.98 |      |  |      | 86.78  |      |  |       | 83.55  |  |  |  | 76.16  |  |  |  | 67.61  |  |  |  | 68.17  |  |  |  | 71.20  |  |  |  | 66.62  |  |  |  | 62.17  |  |  |  | 56.07  |  |  |  | 69.52  |  |  |  | 78.81  |  |  |  | 87.61  | 
|RDG TECHNOLOGY COMPOSITE   |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |      |  |      |        |      |  |       |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        | 
|Investment Value           |  |       | 100.00 |      |  |      | 108.36 |      |  |       | 120.59 |      |  |      | 124.18 |      |  |       | 157.96 |      |  |      | 174.10 |      |  |       | 163.58 |      |  |      | 150.64 |      |  |       | 117.38 |      |  |      | 100.99 |      |  |       | 110.01 |  |  |  | 86.33  |  |  |  | 104.39 |  |  |  | 100.18 |  |  |  | 83.24  |  |  |  | 67.75  |  |  |  | 76.77  |  |  |  | 76.06  |  |  |  | 88.09  |  |  |  | 95.24  |  |  |  | 104.01 | 

10



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##### Table of Contents








|         |                                                                   
|-------- | ------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial
    Owners and Management

Equity Compensation Plan Information

The following table summarizes information with
respect to options under ESS equity compensation plans at
December 31, 2003:

Equity Compensation Plan
Information(1)

|                                                                   |       |                         |           |                      |  |                                 |      |      |  |  |           |           | 
|------------------------------------------------------------------ | ----- | ----------------------- | --------- | -------------------- |  | ------------------------------- | ---- | ---- |  |  | --------- | --------- | 
|                                                                   |       |                         |           |                      |  | Number of Securities Remaining 
|                                                                   |       | Number of Securities to |           | Weighted-Average     |  | Available for Future Issuance  
|                                                                   |       | be Issued upon Exercise |           | Exercise Price of    |  | Under Equity Compensation Plans
|                                                                   |       | of Outstanding Options, |           | Outstanding Options, |  | (excluding securities          
|                                                                   |       | Warrants and Rights     |           | Warrants and Rights  |  | reflected in column (a))       
|Plan Category                                                      |       | (a)(2)                  |           | (b)                  |  | (c)                            
|                                                                   |       |                         |           |                      |  |                                
|Equity compensation
    plans approved by
    security holders     |       |                         | 8,364,250 |                      |  | $                               | 9.58 |      |  |  | 3,256,646 | (3)(4)   
|Equity compensation
    plans not approved
    by security holders |       |                         | 201,850   |                      |  | $                               | 9.62 |      |  |  | 1,795,900 |          
|                                                                   |       |                         |           |                      |  |                                 |      |      |  |  |           |          
|                                                                   | Total |                         |           | 8,566,100            |  |                                 | $    | 9.58 |  |  |           | 5,052,546 | 
|                                                                   |       |                         |           |                      |  |                                 |      |      |  |  |           |          



---



|    |                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes only options outstanding under ESS
    stock option plans, as no stock warrants or rights were
    outstanding as of December 31, 2003.                                                                                                                                       
|   
|(2) | In addition, 26,146 outstanding options assumed
    in connection with the acquisition of Platform Technologies.
    These assumed options have a weighted average exercise price of
    $0.03 per share. No additional options may be granted under
    the Platform Technologies plan.
|   
|(3) | A maximum of 2,379 of such shares are available
    for issuance pursuant to future restricted stock awards under
    the 1995 Equity Incentive Plan.                                                                                                                                   
|   
|(4) | Includes 611,733 shares of common stock
    reserved for future issuance under the 1995 Employee Stock
    Purchase Plan.                                                                                                                                                               

In May 2002, ESS adopted the 2002 Non-Executive
Stock Option Plan (the 2002 Plan), which has not
been approved by shareholders, and reserved a total of
2,000,000 shares of the Companys common stock for
issuance thereunder. The 2002 Plan allows for granting of stock
options to ESS non-executive employees and consultants,
and options granted under the 2002 Plan are non-statutory stock
options. Under the 2002 Plan, options granted generally vest 25%
at the end of the first year, after the anniversary date of the
date of grant, and ratably thereafter over the remaining vesting
period.

11



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##### Table of Contents



Common Ownership of Certain Beneficial Owners
and Management

The following table sets forth certain
information, as of March 15, 2004, known to the Company
regarding the beneficial ownership of the Companys common
stock that has been provided to the Company with respect to the
beneficial ownership of share of (1) each person known by
the Company to be the beneficial owner of more than 5% of the
Companys common stock, (2) each of the Companys
directors, (3) each of the Named Executive Officers, and
(4) all directors and executive officers as a group. Except
as otherwise noted, the address of each person listed in the
table is c/o ESS Technology, Inc., 48401 Fremont
Blvd., Fremont, CA 94538.

|                                                   |                                    |                              |           |                |  |                 |      |   |  |  |           |         | 
|-------------------------------------------------- | ---------------------------------- | ---------------------------- | --------- | -------------- |  | --------------- | ---- | - |  |  | --------- | ------- | 
|                                                   |                                    |                              |           |               
|                                                   |                                    | Shares Beneficially Owned(1) |           | Options       
|                                                   |                                    |                              |           | Exercisable on
|                                                   |                                    | Number of                    |           | Percent of     |  | or Before      
|Name and Address                                   |                                    | Shares                       |           | Common Stock   |  | May 14, 2004(1)
|                                                   |                                    |                              |           |                |  |                
|Fred S.L. Chan, Chairman(2)                        |                                    |                              | 5,040,344 |                |  |                 | 12.8 | % |  |  | 511,667   |        
|Annie M.H. Chan(2)                                 |                                    |                              | 5,040,344 |                |  |                 | 12.8 | % |  |  |          |        
|Barclays Global Investors, NA and affiliate(3)     |                                    |                              | 2,944,450 |                |  |                 | 7.5  | % |  |  |          |        
|                                                   | 45 Fremont Street                  |                              |           |                |  |                 |      |   |  |  |           |         | 
|                                                   | San Francisco, CA 94105            |                              |           |                |  |                 |      |   |  |  |           |         | 
|Robert L. Blair, President and CEO                 |                                    |                              | 407,276   |                |  |                 | 1.0  | % |  |  | 386,055   |        
|Patrick Ang, COO and Executive Vice President      |                                    |                              | 132,917   |                |  |                 | *    |   |  |  | 132,917   |        
|James B. Boyd, CFO, Senior Vice President and      |                                    |                              |           |                |  |                 |      |   |  |  |           |        
|                                                   | Assistant Secretary                |                              |           | 136,385        |  |                 |      | * |  |  |           | 135,000 | 
|Dominic Ng, Director                               |                                    |                              | 55,626    |                |  |                 | *    |   |  |  | 55,626    |        
|                                                   | c/o East West BanCorp              |                              |           |                |  |                 |      |   |  |  |           |         | 
|                                                   | 415 Huntington Drive               |                              |           |                |  |                 |      |   |  |  |           |         | 
|                                                   | San Marino, CA 91108               |                              |           |                |  |                 |      |   |  |  |           |         | 
|David S. Lee, Director                             |                                    |                              | 47,605    |                |  |                 | *    |   |  |  | 47,605    |        
|                                                   | c/o eOn Communications Corporation |                              |           |                |  |                 |      |   |  |  |           |         | 
|                                                   | 105 Cochrane Circle                |                              |           |                |  |                 |      |   |  |  |           |         | 
|                                                   | Morgan Hill, CA 95037              |                              |           |                |  |                 |      |   |  |  |           |         | 
|Peter T. Mok, Director                             |                                    |                              | 24,584    |                |  |                 | *    |   |  |  | 24,584    |        
|                                                   | c/o KLM Capital Management, Inc.   |                              |           |                |  |                 |      |   |  |  |           |         | 
|                                                   | 10 Almaden Blvd. Suite 988         |                              |           |                |  |                 |      |   |  |  |           |         | 
|                                                   | San Jose, CA 95113                 |                              |           |                |  |                 |      |   |  |  |           |         | 
|Alfred J. Stein                                    |                                    |                              | 15,000    |                |  |                 | *    |   |  |  | 15,000    |        
|All executive officers and directors as a group(4) |                                    |                              | 5,859,737 |                |  |                 | 14.9 | % |  |  | 1,308,454 |        



---



|  |                                                                                   
|- | ----------------------------------------------------------------------------------
|* | Less than one percent of the outstanding shares
    of the Companys common stock.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Unless otherwise indicated below, the persons and
    entities named in the table have sole voting and sole investment
    power with respect to all shares shown as beneficially owned,
    subject to community property laws where applicable and except
    as indicated in the other footnotes to this table. As of
    March 15, 2004, 39,365,019 shares of the
    Companys common stock were issued and outstanding. Shares
    of common stock subject to options that are currently
    exercisable or exercisable within 60 days after
    March 15, 2004 are deemed to be outstanding and to be
    beneficially owned by the person holding such options for the
    purpose of computing the percentage ownership of such person but
    are not treated as outstanding for the purpose of computing the
    percentage ownership of any other person.
|   
|(2) | Includes 0 shares held by Fred S.L. Chan.
    This amount includes 3,248,677 shares held by the Annie
    M.H. Chan Living Trust. This amount also includes
    280,000 shares held by a trust benefiting Michael Y.J.
    Chan. Mee Sim Lee, Sung Kook Kim and Myong Shin Kim are trustees
    of the above-mentioned trust. David, Edward and Michael Chan are
    sons of Fred S.L. Chan and Annie M.H. Chan. This amount does not
    include shares held in trust for the benefit of Edward Y.C. Chan
    and shares held in trust for the benefit of David Y.W. Chan,
    adult children who do not reside with the Chans. This amount
    also includes                                                                                                                                                                                                       

12



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##### Table of Contents



| |                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1,000,000 shares held by Annie M.H. Chan,
    which are subject to forward sales contracts as to which
    Ms. Chan has voting, but not dispositive power. Includes
    options exercisable within 60 days of March 15, 2004
    held by Mr. Chan to purchase 511,667 shares of
    the Companys common stock.



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | The Schedule 13G filed by Barclays Global
    Investors, NA with the SEC on February 17, 2004 indicates
    that Barclays Global Investors, NA, Barclays Global Fund
    Advisors, Barclays Bank PLC and Barclays Capital Securities
    Limited collectively have sole power to direct the voting and
    disposition of 2,944,450 shares. The shares reported are
    held in trust accounts for the economic benefit of the
    beneficiaries of those accounts.
|   
|(4) | Includes 280,000 shares held by entities
    affiliated with certain director as described in Note (2).                                                                                                                                                                                                                                                                                                                                                            






|         |                                                   
|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions

Transactions with Management and
Others

The Company has entered into indemnification
agreements with the Companys directors and certain
officers for the indemnification of and advancement of expenses
to these persons to the fullest extent permitted by law. The
Company also intends to enter into these agreements with the
Companys future directors and certain future officers.

Pursuant to the Companys articles of
incorporation, bylaws and the Companys indemnification
agreements with its officers and directors, the Company is
obligated to indemnify and advance expenses of its officers and
directors under certain circumstances to the fullest extent
permitted by California law. After the Company revised its
revenues and earnings guidance for the third quarter of 2002 on
September 12, 2002, several holders of its common stock,
purporting to represent the corporation, brought derivative
suits against the Company as a nominal defendant and certain of
the Companys officers and directors. These actions have
been consolidated and are proceeding as a single action entitled
ESS Cases. In connection with the ESS Cases, during
fiscal 2003, the Company paid an aggregate of $529,059 for joint
expenses, as to which there has been no allocation of expenses
among defendants.

Except as set forth above, in fiscal year 2003,
the Company has not been a party to any transaction exceeding
$60,000 in value with any of the Companys directors,
nominees for election as a director, executive officers, holders
of more than 5% of the Companys common stock or any member
of the immediate family of any such persons, other than normal
compensation arrangements that are described in Item 11 of
this Report.

Certain Business Relationships

Fred S.L. Chan, the Companys Chairman of
the Board, beneficially owns approximately 39% of the
outstanding shares of Vialta, the former majority-owned
subsidiary of the Company. Mr. Chan currently serves as
Vialtas Chairman of the Board of Directors. Each company
pays Mr. Chan a base salary separately.

Under existing relationships between ESS and
Vialta, for the sale of certain ESS products, the rental of
certain ESS real estate properties, and the provision of certain
services, ESS charged Vialta a total of $1.7 million, net
of miscellaneous charges from Vialta, in fiscal year 2003.

13



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|         |                                           
|-------- | ------------------------------------------
|Item 14. | Principal Accountant Fees and
    Services

Fees Paid to PricewaterhouseCoopers
LLP

The following table lists the aggregate fees paid
for professional services rendered by PricewaterhouseCoopers LLP
for all Audit Fees, Audit-Related Fees,
Tax Fees, and All Other Fees for the
last two fiscal years. Certain amounts for the fiscal year 2002
have been reclassified to conform to the 2003 presentation.

|                   |                            |                |         |             |           |   |         |         |           | 
|------------------ | -------------------------- | -------------- | ------- | ----------- | --------- | - | ------- | ------- | --------- | 
|                   |                            | Fiscal Year    |         | Fiscal Year
|                   |                            | 2003           |         | 2002       
|                   |                            |                |         |            
|Audit Fees         |                            | $              | 379,950 |             |           | $ | 400,000 |        
|Audit-Related fees |                            | $              | 365,750 |             |           |   |        |        
|Tax Fees:          |                            |                |         |             |           |   |         |        
|                   | Tax compliance/preparation |                | $       | 783,265     |           |   | $       | 535,620 |          
|                   | Other tax services         |                | $       | 78,200      |           |   | $       | 325,000 |          
|                   |                            |                |         |             |           |   |         |        
|                   |                            | Total Tax Fees |         | $           | 861,465   |   |         | $       | 860,620   | 
|All Other Fees     |                            | $              | 2,220   |             |           |   |        |        
|                   |                            |                |         |             |           |   |         |        
|                   |                            | Total          |         | $           | 1,609,385 |   |         | $       | 1,260,620 | 
|                   |                            |                |         |             |           |   |         |        



| |           
| | ----------
| | Audit Fees

The audit fees for the years ended
December 31, 2003 and 2002, respectively, were for
professional services rendered for the audit of the
Companys annual financial statements for the fiscal years
2003 and 2002, and for reviews of the financial statements
included in the Companys quarterly reports on
Form 10-Q for the first three quarters of the fiscal years
2003 and 2002.



| |                   
| | ------------------
| | Audit-Related Fees

The audit-related fees for the years ended
December 31, 2003 and 2002, respectively, were for services
that are reasonably related to the performance of the audit or
review of the Companys consolidated financial statements
and are not reported under Audit Fees. These
services include due diligence and accounting consultations in
connection with mergers and acquisitions, attest services that
are not required by statute or regulation, and consultations
concerning financial accounting and reporting standards.



| |         
| | --------
| | Tax Fees

The tax fees for the years ended
December 31, 2003 and 2002, respectively, were for tax
compliance/preparation and other tax services. Tax
compliance/preparation consists of fees billed for assistance in
the preparation of ESS international, U.S. federal,
state and local tax returns, tax audits and appeals, and
transfer pricing documentation. Other tax services consist of
tax advice related to mergers and acquisitions and restructuring
of foreign corporations.



| |               
| | --------------
| | All Other Fees

Other fees for the years ended December 31,
2003 were for subscription fees for the GAAP and GAAS rule
related updates.

The Audit Committee of the Board has considered
whether the provision by PricewaterhouseCoopers LLP of the
non-audit services listed above is compatible with maintaining
PricewaterhouseCoopers LLPs independence. The Audit
Committee has determined that the provision of the non-audit
services by PricewaterhouseCoopers LLP is compatible with
maintaining PricewaterhouseCoopers LLPs independence.

14



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##### Table of Contents



Policy on Audit Committee Pre-Approval and
Permissible Non-Audit Services of Independent Auditors

The Audit Committee has established a policy to
pre-approve all audit and permissible non-audit services
provided by the independent auditors consistent with applicable
SEC rules. In general, the policy provides that (1) the
pre-approval request must be detailed as to the particular
services to be provided, (2) the Audit Committee must be
informed about each service, and (3) the pre-approval may
not result in a delegation of the Audit Committees
responsibilities to the management of ESS. Pre-approval is
generally provided for up to one year. The independent auditors
are prohibited from performing SEC prohibited non-audit
services, including any management functions. Under the policy,
prior to the engagement of the independent auditors for the next
years audit, management and the independent auditors
jointly submit a breakdown of services expected to be rendered
during that year for each of the four categories of services
described above, as well as the anticipated fees for such
services, to the Audit Committee for approval. Prior to
engagement, the Audit Committee pre-approves these services and
fees. The fees are budgeted and the Audit Committee receives
periodic reports from management and the independent auditors on
actual fees versus the budget by category of service. During the
year, circumstances may arise when it may become necessary to
engage the independent auditors for additional services not
contemplated in the pre-approval. In those instances, the Audit
Committee requires specific pre-approval before engaging the
independent auditors. The Audit Committee may delegate
pre-approval authority to one or more of its members. The member
or members to whom such authority is delegated is required to
report, for informational purposes, any pre-approval decisions
to the Audit Committee at its next regularly scheduled meeting.




PART IV






|         |                                                                     
|-------- | --------------------------------------------------------------------
|Item 15. | Exhibits, Financial Statement Schedules,
    and Reports on Form 8-K

(a)(3) Exhibits

The exhibit index below lists the exhibits that
are filed as part of this amendment.

|        |    |               |  |                                                                                                        
|------- | -- | ------------- |  | -------------------------------------------------------------------------------------------------------
|Exhibit |    |              
|Number  |    | Exhibit Title
|        |    |              
|        | 31 | .1            |  | Certification of Chief Executive Officer Pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002.
|        | 31 | .2            |  | Certification of Chief Financial Officer Pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002.

15



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##### Table of Contents






SIGNATURE

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the Registrant
has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.



| |                     
| | --------------------
| | ESS TECHNOLOGY, INC.
| | (Registrant)        



| |     |                    
| | --- | -------------------
| | By: | /s/ ROBERT L. BLAIR

| |                                          
| | -----------------------------------------
| |                                          
| | Robert L. Blair                          
| | President and Chief Executive
    Officer

Date: April 29, 2004

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INDEX TO EXHIBITS

|        |    |               |  |                                                                                                        
|------- | -- | ------------- |  | -------------------------------------------------------------------------------------------------------
|Exhibit |    |              
|Number  |    | Exhibit Title
|        |    |              
|        | 31 | .1            |  | Certification of Chief Executive Officer Pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002.
|        | 31 | .2            |  | Certification of Chief Financial Officer Pursuant
    to Section 302 of the Sarbanes-Oxley Act of 2002.