Techwell Reports Third Quarter 2007 Financial Results

                            TECHWELL, INC.
                  RECONCILIATION OF GAAP NET INCOME
                        TO NON-GAAP NET INCOME
               (In thousands, except per share amounts)
                             (Unaudited)

                                     Three Months    Nine Months Ended
                                         Ended
                                     September 30,     September 30,
                                     2007     2006     2007     2006
                                   -------- -------- -------- --------

GAAP net income                    $ 5,416  $ 4,509  $10,521  $ 8,372

Stock-based compensation expenses:
 Cost of Revenues                       77       35      193       72
 Research and development              579      174    1,414      909
 Selling, general and
  administrative                       660      342    1,637      807
                                   -------- -------- -------- --------
          Total stock-based
           compensation expenses     1,316      551    3,244    1,788
                                   -------- -------- -------- --------

Tax effect on stock-based
 compensation expenses                (141)     (34)    (582)     (60)

Tax effect from the release of
 valuation allowance and other      (1,405)       -   (1,201)       -

Non-GAAP net income                $ 5,186  $ 5,026  $11,982  $10,100
                                   -------- -------- -------- --------

Non-GAAP net income per share
 Basic                             $  0.25  $  0.25  $  0.58  $  0.99
                                   ======== ======== ======== ========
 Diluted                           $  0.24  $  0.23  $  0.55  $  0.51
                                   ======== ======== ======== ========

Shares used in computing net income
 per share
 Basic                              20,822   20,093   20,741   10,213
 Diluted                            21,768   21,787   21,795   19,794


In addition to disclosing financial results calculated in accordance
 with U. S. generally accepted accounting principles (GAAP), the
 operating results presented contain non-GAAP financial measures that
 exclude the income statement effects of stock-based compensation
 expense and the tax effect on the release of a valuation allowance on
 the company's deferred tax assets.

We believe that the non-GAAP measures, excluding stock-based
 compensation expense and the tax effect on the release of a valuation
 allowance on the company's deferred tax assets, when viewed in
 addition to and not in lieu of our reported GAAP results, assist
 investors in understanding our results of operations. We believe non-
 GAAP measures provide useful supplemental information for investors
 to evaluate our operating results in the same manner as the research
 analysts that follow Techwell all of whom present non-GAAP
 projections in their published reports. As such, non-GAAP measures
 provided by Techwell facilitates a more direct comparison of its
 performance with the financial projections published by the analysts.
 However, non-GAAP measures should not be considered in isolation
 from, or as a substitute for, financial information prepared in
 accordance with GAAP.

                            TECHWELL, INC.
                CONDENSED CONSOLIDATED BALANCE SHEETS
                            (in thousands)

                                                 September   December
                                                     30,        31,
                                                      2007     2006
                                                 ----------- ---------
                                                                                         (unaudited)  (audited)
Assets
Current  Assets:
  Cash  and  cash  equivalents                                                    $21,945    $  13,201
  Short-term  investments                                                            37,186        36,364
  Accounts  receivable                                                                    1,946          2,765
  Inventory                                                                                        4,529          4,584
  Prepaid  expenses  and  other  assets                                        1,382          1,406
                                                                                                  -----------  ---------
                        Total  Current  Assets                                          66,988        58,320

  Property  and  equipment  -  net                                                  1,389              625
  Long-term  investments                                                                6,281          4,963
  Deferred  income  tax  asset                                                        5,133                  -
  Other  assets                                                                                      168                85
                                                                                                  -----------  ---------
  Total  Assets                                                                              $79,959    $  63,993
                                                                                                  ===========  =========


Liabilities  and  Stockholders'  Equity
Current  Liabilities:
  Accounts  payable                                                                      $  3,205    $    3,503
  Accrued  expenses  and  other  liabilities                              4,180          3,344
                                                                                                  -----------  ---------
                        Total  Current  Liabilities                                  7,385          6,847

  Deferred  rent                                                                                    202                  -
                                                                                                  -----------  ---------
  Total  Liabilities                                                                        7,587          6,847
                                                                                                  -----------  ---------

Stockholders'  Equity:
  Common  stock                                                                                        21                21
  Additional  paid-in  capital                                                    72,090        67,734
  Deferred  stock  compensation                                                      (225)          (546)
  Accumulated  comprehensive  loss                                                  (11)            (39)
  Retained  earnings/(deficit)                                                        497      (10,024)
                                                                                                  -----------  ---------
  Total  Stockholders'  Equity                                                    72,372        57,146

                                                                                                  -----------  ---------
  Total  Liabilities  and  Stockholders'  Equity                  $79,959    $  63,993
                                                                                                  ===========  =========
 






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