FORM 6-K



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                            REPORT OF FOREIGN ISSUER

                    PURSUANT TO RULE 13A-16 OR 15D-16 OF THE
                         SECURITIES EXCHANGE ACT OF 1934




                               FOR AUGUST 19, 2002




                            DESWELL INDUSTRIES, INC.
                         (Registrant's name in English)




                  Unit 516 517, Hong Leong Industrial Complex,
                       No. 4 Wang Kwong Road, Kowloon Bay,
                               Kowloon, Hong Kong
                    (Address of principal executive offices)










DESWELL                                         CONTACT:
                                                John G. Nesbett
                                                Ryan Daniels
                                                Lippert/Heilshorn & Associates
                                                212-838-3777
                                                e-mail: jnesbett@lhai.com




              DIRECTORS EXERCISE OPTIONS IN DESWELL INDUSTRIES INC.


HONG KONG (August 19, 2002) - Deswell Industries, Inc. (Nasdaq: DSWL) ("the
Company"), announced that its executive directors Richard Lau and C.P. Li
exercised options totaling 80,000 common shares today. Proceeds to Deswell
totaled $787,000, which will be used for working capital and general corporate
purposes.

This was in addition to the options totaling 156,600 common shares exercised by
its directors during the period from June 1, 2002, to July 13, 2002. In
aggregate, the Company's directors have exercised options totaling 236,600
common shares during June 1, 2002, to August 19, 2002.

Deswell manufactures injection-molded plastic parts and components, electronic
products and subassemblies, and metallic products for original equipment
manufacturers ("OEMs") and contract manufacturers at its factories in the
People's Republic of China. The Company produces a wide variety of plastic parts
and components used in the manufacture of consumer and industrial products;
printed circuit board assemblies using surface mount ("SMT"), and pin-through
hole ("PHT") interconnection technologies; and finished products such as
telephones, telephone answering machines, sophisticated studio-quality audio
equipment and computer peripherals. The Company's customers include Kyocera Mita
Industrial Co. (H.K.) Limited, Epson Precision (H.K.) Ltd., Inter-Tel
Incorporated, Vtech Communications Ltd., Peavey Electronics Corporation and
Emerson.

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












           Pursuant to the requirements 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.



                                                For and on behalf of
                                                Deswell Industries, Inc.




                                                By:_________/s/________________
                                                Richard Lau
                                                Chief Executive Officer

Date: September 18, 2002