[HARNEY WESTWOOD & RIEGELS LOGO]


                   [LETTERHEAD OF HARNEY WESTWOOD & RIEGELS]


9 July 2002

Deswell Industries, Inc.
Unit 516 517, Hong Leong Industrial Complex,
No. 4 Wang Kwong Road, Kowloon Bay,
Kowloon, Hong Kong

Dear Sirs

DESWELL INDUSTRIES, INC.
REGISTRATION STATEMENT ON FORM S-8

We are British Virgin Islands counsel to Deswell Industries, Inc., a British
Virgin Islands international business company (the "COMPANY"). We have assisted
the Company in its preparation of a Registration Statement (the "REGISTRATION
STATEMENT") on Form S-8 under the United States Securities Act of 1933, as
amended (the "SECURITIES ACT"), registering (after giving effect to a
three-for-two share split of outstanding shares effective on July 8, 2002, to
shareholders of record on July 8, 2002, payable on July 22, 2002) 750,000 common
shares of the Company (the "COMMON SHARES") issuable upon exercise of options
granted and to be granted under the Company's 2001 Stock Option Plan (the
"PLAN").

We have made such legal and factual examinations and inquiries that we have
deemed necessary or advisable for the purpose of rendering this opinion. In
particular, we have examined the following documents:

(a)   the Memorandum and Articles of Association and Certificate of
      Incorporation of the Company on file at the Companies Registry in the
      British Virgin Islands on July 8, 2002;

(b)   a facsimile copy of the executed Plan;

(c)   a facsimile copy of the Unanimous Consent in Lieu of Meeting of Board of
      Directors, stated to take effect on August 15, 2001;


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(d)  a facsimile copy of the Unanimous Consent in Lieu of Meeting of Board of
     Directors, stated to take effect on July 8, 2002; and

(e)  a Registered Agent's certificate dated July 9, 2002, identifying the
     incumbent directors and officers of the Company.

Based on and subject to the foregoing we are of the opinion that the Common
Shares, when issued pursuant to the exercise of options under the Plan and the
payment of the purchase price therefor in full in cash in accordance with the
terms of issuance of such Common Shares, will be duly and validly issued, fully
paid and nonassessable Common Shares.

We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement. This consent is not to be construed as an admission that
we are a person whose consent is required to be filed with the Registration
Statement under the provisions of the Securities Act.

Except as otherwise provided above or by law, this opinion is rendered for the
benefit of the addressee only and may not be disclosed to or relied upon by any
other party.

Yours faithfully

/s/ HARNEY WESTWOOD & RIEGELS
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HARNEY WESTWOOD & RIEGELS


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