S-3

As filed with the Securities and Exchange Commission on April 10, 2003

Registration No. 333-          

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-3

REGISTRATION STATEMENT

Under

The Securities Act of 1933

Sigma Designs, Inc.

(Exact name of Registrant as specified in its charter)

California (State or other jurisdiction of incorporation or organization) 94-2848099 (I.R.S. Employer Identification Number)

Sigma Designs, Inc.

1221 California Circle

Milpitas, CA 95035

(408) 262-9003

(Address and telephone number of Registrant’s principal executive offices)

Thinh Q. Tran

President and Chief Executive Officer

Sigma Designs, Inc.

1221 California Circle

Milpitas, CA 95035

(408) 262-9003

(Name, address, and telephone number of agent for service)

Copies to:

Don Williams, Esq.

Wilson Sonsini Goodrich & Rosati

Professional Corporation

650 Page Mill Road

Palo Alto, CA 94304-1050

(650) 493-9300

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x

If this Form is to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. ¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Share (1)	Proposed Maximum Aggregate Offering Price	Amount of Filing Fee
Common stock, no par value per share	1,606,644 shares	$5.67	$9,109,671.48	$736.98

(1)    The price of $5.67 per share, which was the average of the high and low prices of the Registrant’s common stock on the Nasdaq National Market on April 8, 2003, is set forth solely for the purposes of calculating the registration fee in accordance with Rule 457(c) of the Securities Act.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a) may determine.

The information in this prospectus is not complete and may be changed. We are not permitted to sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and is not soliciting an offer to buy these securities, in any state where the offer or sale is not permitted.

PROSPECTUS

(Subject to Completion, dated April 10, 2003)

1,606,644 Shares

Sigma Designs, Inc.

Common Stock

This prospectus relates to the public offering of 1,606,644 shares of Common Stock of Sigma Designs, Inc. which are held by certain shareholders of Sigma Designs, Inc. identified in this prospectus. See “Selling Shareholders.” These shares may be offered and sold from time to time by the selling shareholders. The selling shareholders acquired the shares in a private placement financing pursuant to a common stock purchase agreement with Sigma Designs, Inc.

The prices at which such shareholders may sell the shares will be determined by the prevailing market price for the shares or in negotiated transactions. We will not receive any of the proceeds from the sale of the shares.

Our common stock is listed on the Nasdaq National Market under the symbol “SIGM.” On April 8, 2003, the average of the high and low price for our common stock was $5.67 per share.

YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 4 OF THIS PROSPECTUS BEFORE PURCHASING ANY OF THE COMMON STOCK OFFERED HEREBY.

THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES

REGULATORS HAVE NOT APPROVED OR DISAPPROVED OF THESE

SECURITIES OR DETERMINED IF THIS PROSPECTUS IS

TRUTHFUL OR COMPLETE. ANY REPRESENTATION

TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this prospectus is April             , 2003.

No person has been authorized to give any information or to make any representations other than those contained in this prospectus (as it may be amended or supplemented) in connection with the offering made hereby, and if given or made, such information or representations must not be relied upon as having been authorized by Sigma Designs, Inc. (referred to in this prospectus as “Sigma” “we” and the “Company”), any selling shareholder or by any other person. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that information herein is correct as of any time subsequent to the date hereof. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities covered by this prospectus, nor does it constitute an offer to or solicitation of any person in any jurisdiction in which such offer or solicitation may not lawfully be made.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC’s Public Reference Room at 450 Fifth Street, N.W., in Washington, D.C., 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. Our SEC filings are also available to the public from the SEC’s web site at http://www.sec.gov.

The SEC allows us to “incorporate by reference” the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information filed with the SEC will update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the offering by us described in this prospectus is completed.

(1) Sigma’s Annual Report on Form 10-K for the year ended February 2, 2002, filed with the SEC on May 2, 2002, as amended by Sigma’s Annual Report on Form 10-K/A filed with the SEC on December 13, 2002;

(2) Sigma’s Quarterly Reports on Form 10-Q, for the quarter ended May 4, 2002 filed with the SEC on June 18, 2002, for the quarter ended August 3, 2002 filed with the SEC on September 17, 2002, and for the quarter ended November 2, 2002 filed with the SEC on December 17, 2002; and

(3) The description of our Common Stock contained in our Registration Statement on Form 8-A, filed with the SEC on November 3, 1986, including any amendments or reports filed for the purpose of updating such description.

You may request a copy of these filings, at no cost, by writing or telephoning us at the following address:

Kit Tsui

Chief Financial Officer

Sigma Designs, Inc.

1221 California Circle

Milpitas, California 95035

(408) 262-9003

You should rely only on the information incorporated by reference or provided in this prospectus. We have authorized no one to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of the document.

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SIGMA DESIGNS, INC.

Sigma Designs, Inc. specializes in silicon-based moving picture experts group, or MPEG, decoding solutions for broadband set-top appliances and commercial streaming systems that feature video-on-demand, or VOD. Headquartered in Milpitas, California, Sigma also has a research and development center in France, as well as sales offices in China, Europe, Hong Kong, Japan, Korea and Taiwan. Our award-winning REALmagic video-streaming technology is used in both commercial and consumer applications, providing highly integrated solutions for high-quality decoding of MPEG-1, MPEG-2 and MPEG-4 content. Based on this core technology, Sigma has developed system solutions for convergence products including streaming video, DVD playback, Internet connectivity and personal video recording. Sigma’s products are sold worldwide through a direct sales force, distributors and original equipment manufactures.

A pioneer in the MPEG hardware decoder market, we introduced our REALmagic card in 1993, an MPEG playback card for PCs. In April 1997, we announced our entry into the DVD market. A key element of DVD specification is the use of MPEG-2 standards for digital video compression, a technology with which Sigma has established expertise. Our MPEG-2 chips and add-in boards have been used worldwide in leading multimedia PC platforms to enable applications such as DVD title creation, DVD decoding, streaming video and IP multicasting.

During the past few years, Sigma has expanded well beyond its PC card beginnings and is working with telecommunication companies, or telcos, and cable operators on trial deployments involving advanced DSL, broadband over cable, fiber to the home, and other networks for delivering VOD to consumer homes, multiple dwelling units and commercial hotel chains. This involvement has led to technology investments in streaming video silicon and software. At the end of 2001, Sigma introduced the industry’s first DVD resolution MPEG-4 decoder chip for set-top appliances, establishing a unique position to contribute to the deployment of next generation capabilities.

Sigma was incorporated under the laws of the State of California in January 1982. Our principal executive offices are located at 1221 California Circle, Milpitas, California, telephone number (408) 262-9003.

FORWARD-LOOKING STATEMENTS

This prospectus and the documents incorporated herein by reference contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results could differ materially from those expressed or forecasted in any such forward-looking statements as a result of certain factors, including those set forth in “Risk Factors,” as well as those noted in the documents incorporated herein by reference. In connection with forward-looking statements which appear in these disclosures, investors should carefully review the factors set forth in this prospectus under “Risk Factors.”

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RISK FACTORS

You should carefully consider the risks described below before making an investment decision. The risks and uncertainties described below are not the only ones facing our company. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.

If any of the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected. In such case, the trading price of our Common Stock could decline and you could lose all or part of your investment.

This prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this prospectus.

The following risk factors should be considered in conjunction with the information included in or incorporated by reference to this Form S-3.

Risks Related to Sigma

We have a history of operating losses and we could sustain future losses. We cannot assure you that we will be profitable and if we continue to lose money, our business may not be financially viable.

We incurred significant operating losses in fiscal 1995, 1996, 1998, 2001, 2002 and 2003 and had negative cash flow in fiscal 1995, 1998, 2002 and 2003. Since our introduction of the REALmagic MPEG product line in November 1993, we have made significant investments in marketing and technological innovation for our REALmagic products. As a result of our investments, we experienced significant losses through fiscal 1996. Fiscal 1995, 1996 and 1998 also included significant losses associated with products other than those related to our REALmagic technology. Fiscal 2003, 2002 and 2001 included significant loss associated with the decline in demand of our REALmagic products. Since our inception through January 31, 2003, our total accumulated deficit is $62,506,000. We cannot assure you that we will be able to sell our REALmagic products in substantial quantities or generate significant revenues from those sales. We cannot assure you that we will not incur operating losses in any future fiscal quarter or fiscal year.

If we fail to comply with or obtain waivers for covenants under our loan obligations, our financial condition will be seriously harmed.

We have amended and restated the business loan agreement with our bank, dated November 1, 2002. Under the agreement we issued to our bank two secured promissory notes in the total principal amounts of $12.0 million and $6.0 million, respectively, that expire in October 2003, under which we may borrow as needed. Under the agreement and the notes, we are subject to certain covenants that, among other things, require us to maintain tangible net worth of at least $4.9 million as of January 31, 2003. Since July 1997, we have, on occasion, been in violation of some of the covenants and in all cases have obtained waivers releasing us from our obligation to meet these covenants as of previous dates. However, it is possible that we may need a waiver for future periods and there are no guarantees that our bank will grant these waivers. If we do not meet these covenants, and cannot obtain waivers, the lender could accelerate payments on the notes. Payment of these notes, prior to securing additional financing, could substantially weaken our financial condition. If we do not have sufficient funds available to make full payment of the notes when required, the bank could foreclose on Sigma’s accounts receivable, inventories, equipment and tangible assets that collateralize the notes, which could seriously harm our business.

If we are unable to maintain our listing on the Nasdaq National Market, the liquidity of our common stock could be seriously impaired.

Our common stock trades on the Nasdaq National Market, which specifies certain requirements for the continued listing of common stock. One of these requirements is that we must hold net tangible assets, or total assets less total liabilities, of at least

$10 million. At March 31, 2003, we held net tangible assets of approximately $8.75 million. Consequently, the Nasdaq may notify us that we are not in compliance with this listing requirement, and will then likely require us to demonstrate a plan for establishing compliance with this requirement. If we are unable to demonstrate a satisfactory compliance plan, the Nasdaq may seek to delist our common stock from the Nasdaq National Market. We believe we qualify for listing on the Nasdaq Small Cap Market; however, we cannot assure you that an active trading market will develop for our common stock in that market.

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If our common stock is delisted, and particularly, if we are unable to list our common stock on an alternative market such as the Nasdaq Small Cap Market, it would seriously limit the liquidity of our common stock and impair our potential to raise future capital through the sale of our common stock, which could have a material adverse effect on our business. Delisting could also reduce the ability of holders of our common stock to purchase or sell shares as quickly and as inexpensively as they have done historically, and may have an adverse effect on the trading price of our common stock, regardless of our operating performance. Delisting could also adversely affect our relationships with vendors and customers.

Marketing risks and volatility of OEM customer sales and resale distribution may harm our business.

Our ability to increase sales and achieve profitability depends substantially on our ability to achieve a sustained high level of sales to new OEM customers. We have not executed volume purchase agreements with any of our customers. Our customers are not under any obligation to purchase any minimum quantity of our products. Also, even if we achieve new design wins, we cannot assure you that these manufacturers will purchase our products in substantial volumes. Sales to any particular OEM customer fluctuate significantly from quarter to quarter and are subject to severe price pressures by competitors. Any reductions in those sales could seriously harm our business. Based on our experience in the industry, we expect that our actual sales to OEM customers will experience significant fluctuations. Also, estimates of future sales to any particular customer or groups of customers are inherently uncertain.

Our ability to achieve profitability also depends on maintaining our current sales levels of streaming video and PC add-in products through domestic and international distributors for resale through corporate markets. Sales to such distributors are typically subject to contractual rights of inventory rotation or price protection. The failure of distributors to achieve sustained sell through of our products could result in product returns or delayed or uncollectable receivables. For example, in the third and fourth quarters of fiscal 2001, we recorded sales returns from one of our distributors in the amount of approximately $2.7 million and $1.4 million, respectively. We also provided for a bad debt allowance in the amount of approximately $2.1 million as of January 31, 2001. Such returns and uncollectable receivables could continue to contribute to fluctuations in our results of operations. We cannot assure you that we will be successful in obtaining or maintaining a significant market for these products.

Because we depend on a limited number of major customers, the reduction, delay or cancellation of orders from these customers or the loss of these customers may adversely affect our business.

During fiscal 2003, only one of our customers accounted for more than 10% of net revenues as compared to three customers that accounted for more than 10% of net revenues in fiscal 2002 and 2001. In fiscal 2003, one customer in Europe, two customers in the U.S. and two customers in Asia accounted for 47% of our total net revenues, as compared to three customers in the U.S. and one customer in Europe that accounted for 49% of our total net revenues in fiscal 2002, and two customers in the U.S. and three customers in Asia that accounted for 55% of our total net revenues in fiscal 2001. Our dependence on a few major customers may continue along with other changes in the composition of our customer base. The reduction, delay or cancellations of orders from major customers or the loss of major customers could materially and adversely affect our business, financial condition and results of operations. In addition, any difficulty in collection from key customers could harm our financial condition.

If the consumer appliance market fails to expand our business will be harmed.

Since fiscal 2001, we have shifted our core business from board products to the PC add-in market to chipset products to the consumer appliance market, under which our target customers are set-top box and DVD manufacturers. Currently, our sales from chipset products to set-top boxes and advanced DVD players account for a majority of our net revenues. We expect that providing advanced digital media processors to the consumer appliance market will continue to account for a significant portion of our net revenues in the foreseeable future. However, our strategy may not be successful. Given the current economic environment, consumer spending on home entertainment electronics and applications may not increase as we expect and may even decline. If we experience delays in the deployment of digital processors and system solutions in the set-top boxes and advanced DVD player, or we do not successfully market and sell our products to our target manufactures who incorporate integrated circuits into their systems or products, our business will be harmed.

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Our failure to keep pace with technological change will seriously harm our business.

Our success depends, among other things, on our ability to achieve and maintain technological leadership and to remain competitive in terms of price and product performance.

Our technological leadership depends on our continued technological advancements and research and development investments in the area of MPEG video and audio decoding. These advancements include the following:

• Compatibility with emerging standards and multiple platforms;

• Improvements to our silicon architecture; and

• Enhancements to our software suite.

We cannot assure you that we will be able to make these advancements to our REALmagic technology. If we do make these advances, we cannot assure you that we will be able to achieve and maintain technological leadership. Any material failure by us or OEMs and software developers to develop or incorporate any required improvement could adversely affect the continued acceptance of our technology and the introduction and sale of future products based on our technology. We cannot assure you that products or technologies developed by others will not render obsolete our technology and the products based on our technology.

To be competitive, we must anticipate the needs of the market and successfully develop and introduce innovative new products in a timely fashion. We cannot assure you that we will be able to successfully complete the design of our new products, have these products manufactured at acceptable manufacturing yields, or obtain significant purchase orders for these products. The introduction of new products may adversely affect sales of existing products and contribute to fluctuations in operating results from quarter to quarter. Our introduction of new products also requires that we carefully manage our inventory to avoid inventory surplus and obsolescence. During fiscal 2003 and 2002, we wrote down our inventory in the amount of approximately $0.8 million and $1.4 million respectively, because of a continuing decline in demand for certain of our PC-related products. In addition, new products, as opposed to more mature products, typically have higher initial component costs. This higher cost could result in downward pressures on our gross margins.

Our industry is highly competitive and we cannot assure you that we will be able to effectively compete. If we fail to compete effectively, our business will not be financially viable.

The market for multimedia products is highly competitive and is also influenced by embedded processors provided by multiple companies. Processors have, in recent years, included increased graphics functionality. Other companies with more experience and financial resources may develop a competitive product that could inhibit future growth of our REALmagic technology. Increased competition may be generated from several major computer product manufacturers that have developed products and technologies that could compete directly with REALmagic products. These competitors include:

• STMicroelectronics;

• Equator Technologies;

• Zoran Corporation;

• LSI Logic/C-Cube;

• ESS Technology;

• Broadcom;

• Cirrus Logic;

• TriMedia Technologies;

• IBM;

• ATI.

In addition, Intel computer CPU chips processors have become more powerful, such that video decoding could be done in software. Most of our competitors have substantial experience and expertise in audio, video and multimedia technology and in producing and selling consumer products through retail distribution and OEM channels. These companies also have substantially greater engineering, marketing and financial resources than we have. Our competitors could form cooperative relationships that could present formidable competition to us. We cannot assure you that our REALmagic technology will achieve commercial success or that it will compete effectively against other interactive multimedia products, services and technologies that currently exist, are under development, or may be announced by competitors.

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Our future revenue growth depends in large part on the adoption of MPEG technology.

Our business strategy is, and has been, to focus on REALmagic products by investing heavily in MPEG technology. We have made substantial investments in product development based on the latest MPEG technology, MPEG-4. Though MPEG-4 has gained some market acceptance, there is increasing competition from Microsoft’s WMT and the ISO H.264 standard, a next generation video CODEC that forms an extension of MPEG-4. Though we intend to support new CODEC technologies as they become commercially viable, there is no guarantee that we can successfully develop these technologies in a timely manner or that competitors will not take the lead with these new technologies.

Our operating results are subject to significant fluctuations due to many factors and any of these factors could adversely affect our stock price.

Our operating results have fluctuated in the past and may continue to fluctuate in the future due to a number of factors, including but not limited to:

• new product introductions by us and our competitors;

• changes in our pricing models and product sales mix;

• market acceptance of the technology embodied in our products generally and of our products in particular;

• customer acceptance of our products;

• shifts in demand for the technology embodied in our products generally and for our products in particular and those of our competitors;

• gains or losses of our significant customers;

• reduction in average selling prices and gross margins, which could occur either gradually or precipitously;

• inventory obsolescence;

• write-downs of accounts receivable;

• an interrupted or inadequate supply of semiconductor chips or other materials (for example, our source of supply for silicon wafers was, and may again be affected by earthquakes in Taiwan);

• our inability to protect our intellectual property;

• loss of key personnel;

• technical problems in the development, ramp up, and manufacturing of products which could cause shipping delays;

• the effect of the terrorist attacks in the United States and any related conflicts or similar events worldwide; and

• availability of third-party manufacturing capacity for production of certain of our products. We derive a substantial portion of our revenues from sales to the Asia Pacific region, which is subject to economic instability. We cannot assure you that such instability will not have a material adverse effect on any future international revenues.

We face many risks because of our heavy reliance on certain manufacturers and suppliers that could harm our business and financial condition.

Our products and components are presently manufactured by outside suppliers or foundries. We do not have long-term contracts with these suppliers. We conduct business with our suppliers on a written purchase order basis. Our reliance on independent suppliers subjects us to several risks. These risks include:

• the absence of adequate capacity;

• the unavailability of, or interruptions in access to, certain process technologies; and

• reduced control over delivery schedules, manufacturing yields and costs.

We obtain some of our components from a single source. In fiscal 2000 we experienced a delay and interruption from our source due to the earthquake in Taiwan in October 1999. We estimate that this event resulted in lost sales of about $2.5 million. Other delays or interruptions have not occurred to date, but any delay or interruption in the supply of any of the components required for the production of our REALmagic silicon or our REALmagic multimedia cards currently obtained from a single source could have a material adverse impact on our sales of REALmagic products, and on our business.

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We must provide our suppliers with sufficient lead-time to meet our forecasted manufacturing objectives. Any failure to properly forecast such quantities could materially and adversely affect our ability to produce REALmagic products in sufficient quantities. We cannot assure you that our forecasts regarding new product demand will be accurate, particularly because we sell our REALmagic products on a purchase order basis. Manufacturing REALmagic chipsets is a complex process, and we may experience short-term difficulties in obtaining timely deliveries. This could affect our ability to meet customer demand for our products. Any such delay in delivering products in the future could materially and adversely affect our operating results. Also, should any of our major suppliers become unable or unwilling to continue to manufacture our key components in required volumes, we will have to identify and qualify acceptable additional suppliers. This qualification process could take up to three months or longer and additional sources of supply may not be in a position to satisfy our requirements on a timely basis.

In the past, we have experienced production delays and other difficulties, and we could experience similar problems in the future. In addition, product defects may occur and they may escape identification at the factory. This could result in unanticipated costs, cancellations, deferrals of purchase orders, or costly recall of products from customer sites.

Loss of key personnel could cause our business to suffer.

Our future success depends in large part on the continued service of our key technical, marketing, sales and management personnel. Given the complexity of REALmagic technology, we are dependent on our ability to retain and motivate highly skilled engineers involved in the ongoing hardware and software development of REALmagic products. These engineers are required to refine the existing hardware system and application programming interface and to introduce enhancements in future applications. The multimedia PC industry is characterized by high employee mobility and aggressive recruiting of skilled personnel. Despite incentives we provide, our current employees may not continue to work for us, and if additional personnel were required for our operations, we may not be able to obtain the services of additional personnel necessary for our growth.

We face risks related to intellectual property rights.

Our ability to compete may be affected by our ability to protect our proprietary information. We currently hold seventeen patents covering the technology underlying the REALmagic products. We have filed certain patent applications and are in the process of preparing others. We cannot assure that any additional patents for which we have applied will be issued or that any issued patents will provide meaningful protection of our product innovations. Like other emerging multimedia companies, we rely primarily on trade secrets and technological know-how in the conduct of our business. We also rely, in part, on copyright law to protect our proprietary rights with respect to our REALmagic technology. We use measures such as confidentiality agreements to protect our intellectual property. These methods of protecting our intellectual property may not be sufficient.

The electronics industry is characterized by frequent litigation regarding patent and intellectual property rights. Any such litigation could result in significant expense to us and divert the efforts of our technical and management personnel. In the event of an adverse result in any such litigation, we could be required to expend significant resources to develop non-infringing technology or to obtain licenses to the technology that is the subject of the litigation, and we may not be successful in such development or in obtaining such licenses on acceptable terms, if at all. In addition, patent disputes in the electronics industry have often been settled through cross-licensing arrangements. Because we do not yet have a large portfolio of issued patents, we may not be able to settle an alleged patent infringement claim through a cross-licensing arrangement.

Our international operations are subject to certain risks.

During fiscal 2003, 2002, and 2001, sales to international customers accounted for approximately 67%, 42% and 65% of our total net revenues, respectively. We anticipate that sales to international customers, including sales of REALmagic products, will continue to account for a substantial percentage of our net revenues. Also, some of the foundries that manufacture our products and components are located in Asia. Overseas sales and purchases to date have been denominated in U.S. dollars.

Due to the concentration of international sales and the manufacturing capacity in Europe and Asia, we are subject to the risks of conducting business internationally. These risks include unexpected changes in regulatory requirements and fluctuations in the U.S. dollar that could increase the sales price in local currencies of our products in international markets, or make it difficult for us to obtain price reductions from our foundries. We do not currently engage in any hedging activities to reduce our exposure to exchange rate risks. If and when we engage in transactions in foreign currencies, our results of operations could be adversely affected by exchange rate fluctuations.

We derive a substantial portion of our revenues from sales to the Asia Pacific region. This region of the world is subject to increased levels of economic instability, and this instability could seriously harm our results of operations.

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Our stock price may be volatile.

The market of our common stock has been subject to significant volatility. This volatility is expected to continue. The following factors, among others, may have a significant impact on the market price of our common stock:

• our announcement of the introduction of new products;

• our competitors’ announcements of the introduction of new products; and

• market conditions in the technology, entertainment and emerging growth company sectors.

The stock market has experienced, and is currently experiencing, volatility that particularly affects the market prices of equity securities of many high technology and development stage companies, such as those in the electronics industry. This volatility is often unrelated or disproportionate to the operating performance of such companies. These fluctuations, as well as general economic and market conditions, could decrease the price of our common stock.

USE OF PROCEEDS

Sigma will not receive any of the proceeds from the sale of the shares offered by this prospectus. All proceeds from the sale of the shares offered by this prospectus will be for the account of the selling shareholders, as described below.

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SELLING SHAREHOLDERS

The following table sets forth as of the date of this prospectus the names of each of the selling shareholders, their positions (if any) with Sigma, the number of shares of common stock that each selling shareholder owns, the number of shares of common stock owned by each selling shareholder that may be offered for sale from time to time by this prospectus and the number of shares of common stock to be held by each selling shareholder assuming the sale of all the common stock offered hereby. An aggregate of 1,606,644 shares of Common Stock may be offered for sale by this prospectus.

The selling shareholders may distribute their shares, from time to time, to their limited and/or general partners who may sell shares pursuant to this prospectus. The selling shareholders may also transfer shares owned by them by gift, and upon any such transfer the donee would have the same right of sale as the selling shareholders. We may amend or supplement this prospectus from time to time to update the disclosure set forth herein.

The shares being offered by the selling shareholders that appear on the following table were acquired from us in a private placement transaction that initially closed on March 6, 2003.

	Common Equivalent Shares Beneficially Owned Prior to Offering(1)		Number of Shares Being Offered(3)	Common Equivalent Shares Beneficially Owned After Offering
Name of Selling Shareholder	Number	Percent(2)		Number	Percent(2)
AIG DKR SoundShore Holdings Ltd.	16,000	*	16,000	—	—
AIG DKR SoundShore Opportunity Holding Fund Ltd.	16,000	*	16,000	—	—
AIG DKR SoundShore Private Investors Holding Fund Ltd.	27,000	*	27,000	—	—
AIG DKR SoundShore Strategic Holdings Fund Ltd.	16,000	*	16,000	—	—
Anfel Trading Limited	33,325	*	33,325	—	—
CAM CO.	100,000	*	100,000	—	—
Ching-Hai Chen	166,654	*	166,654	—	—
Chuyen Minh Huynh	124,999	*	124,999	—	—
Jason C. Chen and Hsienhui Chang TTEES Jason C. Chen and Hsienhui Chang U/A DTD 08/05/92(4)	100,000	*	100,000	—	—
Jack M. Dodick	33,333	*	33,333	—	—
Ganot Corporation	100,000	*	100,000	—	—
Richard Grossman	40,000	*	40,000	—	—
Orin Hirschman	100,000	*	100,000	—	—
Hershel Berkowitz	25,000	*	25,000	—	—
Hyung Hwe Huh	100,000	*	100,000	—	—
FAME Associates	25,000	*	25,000	—	—
Micro Lambda Wireless, Inc.	333,333	1.82%	333,333	—	—
Proximity Partners LP	100,000	*	100,000	—	—
Steven W. Spira	50,000	*	50,000	—	—
Super Net Holding Limited	100,000	*	100,000	—	—

* Less than 1%

(1) The share capital of Sigma consists of common stock, 18,264,980 shares of which were outstanding as of April 8, 2003.

(2) Based on 18,264,980 shares of common stock outstanding as of April 8, 2003.

(3) Shares being offered consist solely of common stock of Sigma.

(4) Mr. Chen has been Director of Operations for Sigma since January 1999.

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PLAN OF DISTRIBUTION

The shares covered by this prospectus may be offered and sold from time to time by the selling shareholders. The selling shareholders will act independently of Sigma in making decisions with respect to the timing, manner and size of each sale. The selling shareholders may sell the shares being offered hereby on the Nasdaq National Market, or otherwise, at prices and under terms then prevailing or at prices related to the then current market price, at varying prices or at negotiated prices. These sales may be effected at various times in one or more of the following transactions, or in other kinds of transactions:

• transactions on the Nasdaq National Market or any national securities exchange or U.S. inter-dealer system of a registered national securities association on which our Common Stock may be listed or quoted at the time of sale;

• in the over-the-counter market;

• in private transactions and transactions otherwise than on these exchanges or systems or in the over-the-counter market;

• in connection with short sales of the shares;

• by pledge to secure debt and other obligations;

• through the writing of options, whether the options are listed on an options exchange or otherwise;

• in connection with the writing of non-traded and exchange-traded call options, in hedge transactions and in settlement of other transactions in standardized or over-the-counter options; or

• through a combination of any of the above transactions through a combination of any of the above transactions.

The selling shareholders and their successors, including their transferees, pledgees or donees or their successors, may sell the Common Stock directly to purchasers or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions or commissions from the selling shareholders or the purchasers. These discounts, concessions or commissions as to any particular underwriter, broker-dealer or agent may be in excess of those customary in the types of transactions involved.

In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144 rather than pursuant to this prospectus.

We entered into a registration rights agreement for the benefit of the selling shareholders to register our Common Stock under applicable federal and state securities laws. The registration rights agreement provides for cross-indemnification of the selling shareholders and us and our respective directors, officers and controlling persons against specific liabilities in connection with the offer and sale of the Common Stock, including liabilities under the Securities Act.

To comply with the securities laws of certain states, if applicable, the shares offered hereby will be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states the shares offered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

We have advised the selling shareholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of the shares offered hereby in the market and to the activities of the selling shareholders and their affiliates. In addition, we will make copies of this prospectus available to the selling shareholders and have informed them of the need for delivery of copies of this prospectus to purchasers at or prior to the time of any sale of the shares offered hereby. The selling shareholders may indemnify any broker-dealer that participates in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.

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Any selling shareholder may distribute its shares, from time to time, to its limited and/or general partners, who may sell shares pursuant to this prospectus. Any selling shareholder may also transfer shares owned by it by gift, and upon any such transfer the donee would have the same right of sale as the selling shareholder.

At the time a particular offer of shares is made, if required, a prospectus supplement will be distributed that will set forth the number of shares being offered and the terms of the offering, including the name of any underwriter, dealer or agent, the purchase price paid by any underwriter, any discount, commission and other item constituting compensation, any discount, commission or concession allowed or reallowed or paid to any dealer, and the proposed selling price to the public.

There is no assurance that the selling shareholders will sell any or all of the shares of common stock offered hereby.

We have agreed to pay the expenses incurred in connection with the registration of the shares of common stock offered hereby. The selling shareholders will be responsible for all selling commissions, transfer taxes and related charges in connection with the offer and sale of such shares.

LEGAL MATTERS

Certain legal matters in connection with this offering will be passed upon for Sigma by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto, California.

12

Prospective investors may rely only on the information contained in this Prospectus. Neither Sigma nor any Selling Shareholder has authorized anyone to provide prospective investors with information different from that contained in this Prospectus. This Prospectus is not an offer to sell nor is it seeking an offer to buy the shares in any jurisdiction where the offer or sale is not permitted. The information contained in this Prospectus is correct only as of the date of this Prospectus, regardless of the time of the delivery of this Prospectus or any sale of the shares.

Table of Contents

	Page
WHERE YOU CAN FIND MORE INFORMATION	2
SIGMA DESIGNS, INC.	3
FORWARD-LOOKING STATEMENTS	3
RISK FACTORS	4
USE OF PROCEEDS	9
SELLING SHAREHOLDERS	10
PLAN OF DISTRIBUTION	11
LEGAL MATTERS	12

1,606,644 Shares

Sigma Designs, Inc.

Common Stock

Prospectus

April         , 2003

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.    Other expenses of issuance and distribution.

The Company will pay all expenses incident to the offering and sale to the public of the shares being registered other than any commissions and discounts of underwriters, dealers or agents and any transfer taxes. Such expenses are set forth in the following table. All of the amounts shown are estimates except for the Securities and Exchange Commission (“SEC“) registration fee.

SEC registration fee	$	736.98
Accountant’s fees and expenses	$	[	]
Legal fees and expenses	$	[	]
Printing costs	$	[	]
Miscellaneous	$	[	]
Total	$

Item 15.    Indemnification of directors and officers.

Our Articles of Incorporation eliminate the liability of our directors to the fullest extent permitted by California law. California law provides that a corporation shall have the power to eliminate or limit the personal liability of a director for monetary damages for breach of their fiduciary duties as directors, except for liability for (a) intentional misconduct or knowing and culpable violation of law; (b) acts or omissions that a director believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith on the part of the director; (c) receipt of an improper personal benefit; (d) acts or omissions that show reckless disregard for the director’s duty to the corporation or its shareholders, where the director in the ordinary course of performing a director’s duties should be aware of a risk of serious injury to the corporation or its shareholders; (e) acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director’s duty to the corporation and its shareholders; (f) transactions between the corporation and a director who has a material financial interest in such transaction; and (g) liability for improper distributions, loans or guarantees as provided in Section 316 of the California General Corporation Law.

Our Bylaws provide that we shall indemnify our directors and officers and may indemnify our employees and agents to the fullest extent permitted by California law.

We have entered into agreements to indemnify our directors and officers, in addition to indemnification provided for in our Bylaws. These agreements, among other things, indemnify our directors and officers for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts incurred by any such person in any action or proceeding, including any action by or in the right of Sigma, arising out of such person’s services as a Sigma director or officer, any subsidiary of Sigma or any other company or enterprise to which the person provides services at our request. We also maintain an insurance policy insuring our directors and officers against liability for certain acts and omissions while acting in their official capacities.

The Registrant and the selling shareholders have entered into a Registration Rights Agreement which provides for cross-indemnification of each such shareholder, on the one hand, and the Registrant, its officers, directors and controlling persons, and each other such shareholder, on the other hand, for certain liabilities arising under the Securities Act or otherwise.

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Item 16.    Exhibits and financial statement schedules.

Exhibit Number	Description of Document	Sequential Page No.
4.1	Registration Rights Agreement dated March 6, 2003 by and among Sigma and the selling shareholders
5.1	Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
23.1	Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation (included in Exhibit 5.1)
23.2*	Independent Auditors’ Consent
24.1	Powers of Attorney (included on Page II-4)

* To be filed by amendment.

Item 17.    Undertakings.

A.    The undersigned Registrant hereby undertakes:

(1)    to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act, (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement, and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that clauses (i) and (ii) will not apply if the information required to be included in a post-effective amendment by those clauses is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement;

(2)    that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and

(3)    to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of this offering.

B.    Undertaking Regarding Filings Incorporating Subsequent Exchange Act Documents by Reference.

The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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C.    Undertaking Regarding Indemnification.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

D.    Undertaking Regarding Registration Statement Permitted by Rule 430A.

(1)    For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2)    For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Milpitas, California, on April 10, 2003.

SIGMA DESIGNS, INC.
By:	/s/    THINH Q TRAN
	Thinh Q Tran President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Thinh Q. Tran and Kit Tsui, and each of them, as his attorney-in-fact, with the power of substitution, for him in any and all capacities, to sign any amendment or post-effective amendment to this Registration Statement on Form S-3 or abbreviated registration statement (including, without limitation, any additional registration filed pursuant to Rule 462 under the Securities Act of 1933) with respect hereto and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons on behalf of the Registrant on April 10, 2003.

Signature	Title
/s/ THINH Q. TRAN Thinh Q. Tran	Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer)
/s/ KIT TSUI Kit Tsui	Chief Financial Officer (Principal Financial and Accounting Officer)
/s/ WILLIAM J. ALMON William J. Almon	Director
/s/ JULIEN NGUYEN Julien Nguyen	Director
/s/ WILLIAM WANG William Wang	Director

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INDEX TO EXHIBITS

Exhibit Number	Description of Document	Sequential Page No.
4.1	Registration Rights Agreement dated March 6, 2003 by and among Sigma and the selling shareholders
5.1	Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation
23.1	Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation (included in Exhibit 5.1)
23.2*	Independent Auditors’ Consent
24.1	Powers of Attorney (included on Page II-4)

* To be filed by amendment.

EX-4.1

Exhibit 4.1

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of March 6, 2003 by and among Sigma Designs, Inc, a California corporation (the “Company”), (ii) the investor or investors listed on Exhibit A hereto (collectively the “Initial Investors”) and (iii) each person or entity that subsequently becomes a party to this Agreement pursuant to, and in accordance with, (x) the provisions of Section 2.4 of the Stock Purchase Agreement (defined below) or (y) the provisions of Section 11 hereof (collectively, the “Investor Permitted Transferees” and each individually an “Investor Permitted Transferee”).

WHEREAS, the Company has agreed to issue and sell to the Initial Investors, and the Initial Investors have agreed to purchase from the Company, shares (the “Purchased Shares”) of the Company’s common stock, no par value per share (the “Common Stock”), all upon the terms and conditions set forth in that certain Common Stock Purchase Agreement, dated of even date herewith, between the Company and the Initial Investors (the “Stock Purchase Agreement”); and

WHEREAS, the terms of the Stock Purchase Agreement provide that it shall be a condition precedent to the closing of the transactions thereunder for the Company and the Initial Investors to execute and deliver this Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto hereby agree as follows:

1.    Definitions.    The following terms shall have the meanings provided therefor below or elsewhere in this Agreement as described below:

“Board” shall mean the board of directors of the Company.

“Closing” shall have the meaning ascribed to such term in the Stock Purchase Agreement.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and all of the rules and regulations promulgated thereunder.

“Investors” shall mean, collectively, the Initial Investors and the Investor Permitted Transferees; provided, however, that the term “Investors” shall not include any Initial Investors or any of the Investor Permitted Transferees that cease to own or hold any Registrable Shares.

“Majority Holders” shall mean, at the relevant time of reference thereto, those Investors holding more than fifty percent (50%) of the Registrable Shares held by all of the Investors.

“Qualifying Holder” shall have the meaning ascribed thereto in Section 11 hereof.

“Registrable Shares” shall mean (i) the Purchased Shares and any shares issued in respect thereof, and (ii) any Common Stock of the Company issued as (or issuable on the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange for, or in replacement of, the shares referenced in clauses (i) above.

“Rule 144” shall mean Rule 144 promulgated under the Securities Act and any successor or substitute rule, law or provision.

“SEC” shall mean the Securities and Exchange Commission.

“Securities Act” shall mean the Securities Act of 1933, as amended, and all of the rules and regulations promulgated thereunder.

2.    Effectiveness.    This Agreement shall become effective and legally binding only if the Closing occurs.

3.    Mandatory Registration.

(a)  No later than thirty (30) days after the later of (i) the Closing or (ii) the final closing pursuant to any Subsequent Sale under Section 2.4 of the Stock Purchase Agreement (the “Final Closing”), the Company will prepare and file with the SEC a registration statement on Form S-3 (or, if Form S-3 is not then available to the Company, on such form of registration statement that is then available to effect a registration of all Registrable Shares) for the purpose of registering under the Securities Act all of the Registrable Shares for resale by, and for the account of, the Investors as selling stockholders thereunder (the “Registration Statement”). The Registration Statement shall permit the Investors to offer and sell, on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, any or all of the Registrable Shares. The Company agrees to use commercially reasonable efforts to cause the Registration Statement to become effective as soon as practicable after filing, but in no event later than ninety (90) days after the Final Closing. The Company shall be required to keep the Registration Statement effective until such date that is the earlier of (i) the date when all of the Registrable Shares registered thereunder shall have been sold or (ii) such time as all the Registrable Shares held by the Investors can be sold pursuant to Rule 144 within a given three-month period without volume limitation and without compliance with the registration requirements of the Securities Act (such date is referred to herein as the “Mandatory Registration Termination Date”). Thereafter, the Company shall be entitled to withdraw the Registration Statement and the Investors shall have no further right to offer or sell any of the Registrable Shares pursuant to the Registration Statement (or any prospectus relating thereto).

(b)    The offer and sale of the Registrable Shares pursuant to the Registration Statement shall not be underwritten.

4.    Obligations of the Company.    In connection with the Company’s obligation under Section 3 hereof to file a Registration Statement with the SEC and to use its reasonable efforts to cause the Registration Statement to become effective as soon as practicable after filing, the Company shall, as expeditiously as reasonably possible, subject to Section 10 hereof:

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(a)    Prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective until the Mandatory Registration Termination Date;

(b)    Furnish to the selling Investors such reasonable number of copies of the Registration Statement, prospectus and preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents (including, without limitation, prospectus amendments and supplements as are prepared by the Company in accordance with Section 4(a) above) as the selling Investors may reasonably request, in order to facilitate the public or other disposition of such selling Investors’ Registrable Shares;

(c)    Use reasonable efforts to register and qualify the Registrable Shares covered by the Registration Statement under such other securities or Blue Sky laws of all states requiring such securities or Blue Sky registration or qualification, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, and provided further that (notwithstanding anything in this Agreement to the contrary with respect to the bearing of expenses) if any jurisdiction in which any of such Registrable Shares shall be qualified shall require that expenses incurred in connection with the qualification therein of any such Registrable Shares be borne by the selling Investors, then the selling Investors shall, to the extent required by such jurisdiction, pay their pro rata share of such qualification expenses; and

(d)    Use reasonable efforts to cause all such Registrable Shares registered hereunder to be listed on each securities exchange on which securities of the same class issued by the Company are then listed.

5.    Furnish Information.    It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement that the selling Investors shall furnish to the Company such information regarding them and the securities held by them as the Company shall reasonably request and as shall be required in order to effect any registration by the Company pursuant to this Agreement.

6.    Expenses of Registration.    All expenses incurred in connection with the registration of the Registrable Shares pursuant to this Agreement (excluding underwriting, brokerage and other selling commissions and discounts), including without limitation all registration and qualification and filing fees, printing expenses, fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one counsel for the selling Investors selected by the selling Investors, shall be borne by the Company.

7.    Delay of Registration.    The Investors shall not take any action to restrain, enjoin or otherwise delay any registration as the result of any controversy which might arise with respect to the interpretation or implementation of this Agreement.

8.    Indemnification.

(a)    To the extent permitted by law, the Company will indemnify and hold harmless each selling Investor (including the partners or officers, directors and stockholders of such Investor), and each person, if any, who controls such selling Investor within the meaning of

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the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which they may become subject under the Securities Act, the Exchange Act, and other federal or state securities laws, or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) (i) arise out of or are based upon any untrue or alleged untrue statement of any material fact contained in the Registration Statement, in any preliminary prospectus or final prospectus relating thereto or in any amendments or supplements to the Registration Statement or any such preliminary prospectus or final prospectus, (ii) arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading or (iii) arise out of any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any other federal or state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any other federal or state securities law; and will reimburse such selling Investor, or such officer, director or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld or delayed), nor shall the Company be liable in any such case for any such loss, damage, liability or action to the extent that it arises out of or is based upon an untrue statement or alleged untrue statement or omission made in connection with the Registration Statement, any preliminary prospectus or final prospectus relating thereto or any amendments or supplements to the Registration Statement or any such preliminary prospectus or final prospectus, in reliance upon and in conformity with written information furnished expressly for use in connection with the Registration Statement or any such preliminary prospectus or final prospectus by the selling Investors, any broker/dealer acting on their behalf or controlling person with respect to them.

(b)    To the extent permitted by law, each selling Investor will severally and not jointly indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the Registration Statement, each person, if any, who controls the Company within the meaning of the Securities Act, or any selling Investors, and all other selling Investors against any losses, claims, damages or liabilities to which the Company or any such director, officer, controlling person or such other selling Investor may become subject to, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any untrue or alleged untrue statement of any material fact contained in the Registration Statement or any preliminary prospectus or final prospectus, relating thereto or in any amendments or supplements to the Registration Statement or any such preliminary prospectus or final prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent and only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, in any preliminary prospectus or final prospectus relating thereto or in any amendments or supplements to the Registration Statement or any such preliminary prospectus or final prospectus, in reliance upon and in conformity with written information furnished by the selling Investor expressly for use in connection with the Registration Statement, or any preliminary prospectus or final prospectus; and such selling Investor will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer,

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controlling person, or other selling Investor in connection with investigating or defending any such loss, claim, damage, liability or action, provided, however, that the liability of each selling Investor hereunder (when aggregated with amounts contributed, if any, pursuant to Section 8(d)) shall be limited to the proceeds (net of underwriting discounts and commissions, if any) received by such selling Investor from the sale of Registrable Shares covered by the Registration Statement, and provided further, however, that the indemnity agreement contained in this Section 8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of those selling Investor(s) against which the request for indemnity is being made (which consent shall not be unreasonably withheld or delayed).

(c)    Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof and the indemnifying party shall have the right to participate in and, to the extent the indemnifying party desires, jointly with any other indemnifying party similarly noticed, to assume at its expense the defense thereof with counsel mutually satisfactory to the indemnifying parties with the consent of the indemnified party which consent will not be unreasonably withheld, conditioned or delayed. In the event that the indemnifying party assumes any such defense, the indemnified party may participate in such defense with its own counsel and at its own expense, provided, however, that the counsel for the indemnifying party shall act as lead counsel in all matters pertaining to such defense or settlement of such claim and the indemnifying party shall only pay for such indemnified party’s reasonable legal fees and expenses for the period prior to the date of its participation on such defense, and provided further, however, that the indemnified party (together with all indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if the representation of the indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between the indemnified party and any other party represented by such counsel in such proceeding. Notwithstanding the foregoing, the indemnifying party shall not be obligated to pay the fees of more than one separate counsel. The failure to notify an indemnifying party promptly of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 8, but the omission so to notify the indemnifying party will not relieve him of any liability which he may have to any indemnified party otherwise other than under this Section 8.

(d)    If the indemnification provided in this Section 8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that shall have resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations; provided that in no event shall any contribution by an Investor under this Section 8(d), when aggregated with amounts paid, if any, pursuant to Section 8(b), exceed

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the proceeds from the sale of Registrable Shares hereunder received by such Investor. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

(e)    The obligations of the Company and Investors under this Section 8 shall survive the completion of any offering of Registrable Shares in a Registration Statement under Section 3, and otherwise.

(f)    Notwithstanding anything to the contrary herein, the indemnifying party shall not be entitled to settle any claim, suit or proceeding without the written consent of the indemnified party unless in connection with such settlement the indemnified party receives an unconditional release with respect to the subject matter of such claim, suit or proceeding.

9.    Reports Under the Exchange Act.    With a view to making available to the Investors the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit the Investors to sell the Registrable Shares to the public without registration, the Company agrees to use reasonable efforts: (i) to make and keep public information available, as those terms are understood and defined in the General Instructions to Form S-3, or any successor or substitute form, and in Rule 144, (ii) to file with the SEC in a timely manner all reports and other documents required to be filed by an issuer of securities registered under the Securities Act or the Exchange Act and (iii) undertake any additional actions reasonably necessary to maintain the availability of the Registration Statement or the use of Rule 144.

10.    Selling Procedures.    Any sale of Registrable Shares pursuant to the registration statement filed in accordance with Section 3 hereof shall be subject to the following conditions and procedures:

(a)    Stockholder Notice.    The selling Investor shall provide written notice (“Stockholder Notice”) to the Company no less than three (3) business days prior to such Investor’s intended sale. Within three (3) business days of receipt of the Stockholder Notice, the Company will inform such Investor in writing if the registration statement and final prospectus then on file with the SEC is current and otherwise complies with the Securities Act such that sales may be made thereunder. Beginning immediately upon receipt of notice from the Company that the registration statement is current and complies with the Securities Act, such Investor shall then have ten (10) business days to sell the Registrable Shares proposed to be sold unless the notice from the Company specifies that no sale may be made until the date of intended sale, as specified in the Stockholder Notice, in which case the Investor must wait until the date of the intended sale to make such sale and thereafter the Investor shall have ten (10) business days to make such sale (the “Selling Period”). After such Selling Period, the selling Investor shall once again comply with the procedures set forth in this Section 10(a) prior to any further sales;

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Stockholder Notice shall be in writing to the Company at the following address:

Sigma Designs, Inc.

1221 California Circle

Milpitas, CA 95035

Attention: Chief Financial Officer

Facsimile No.: (408) 957-9740

(b)    Updating the Prospectus.

(i)    If the Company informs the selling Investor that the Registration Statement or final prospectus then on file with the SEC is not current or otherwise does not comply with the Securities Act, the Company shall use its best efforts to provide to the selling Investor a current prospectus that complies with the Securities Act as soon as practicable, but in no event later than three (3) business days after delivery of such notice. The Company’s obligation to update the Registration Statement or final prospectus under this Section 10(b)(i) shall not be subject to the limitations of Section 10(b)(ii) or (c) below.

(ii)    If the Company requires more than three (3) business days to update the prospectus under Section 10(b)(i) above, the Company shall have the right to delay the preparation of a current prospectus that complies with the Securities Act without explanation to such Investor, subject to the limitations set forth in Section 10(c) below, for a period of not more than ninety (90) days (or two periods which total not more than ninety (90) days in the aggregate) during any twelve-month period.

(c)    General.    Notwithstanding the foregoing, upon receipt of any notice from the Company of (i) any request by the SEC or any other federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to the Registration Statement or related prospectus or for additional information relating to the Registration Statement, (ii) the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, (iii) the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (iv) the happening of any event which makes any statement made in the Registration Statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or which requires the making of any changes in the Registration Statement or prospectus so that, in the case of the Registration Statement, it will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the prospectus, it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (v) that, in the judgment of the Company’s Board of Directors, it is advisable to suspend use of the prospectus for a discrete period of time due to pending corporate developments, public filings with the Commission or that there exists material nonpublic information about the Company that the Board of Directors,

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acting in good faith, determines not to disclose in a registration statement, then the Company may suspend use of the prospectus, in which case the Company shall promptly so notify each Investor and each Investor shall not dispose of Registrable Shares covered by the Registration Statement or prospectus until copies of a supplemented or amended prospectus are distributed to the Investors or until the Investors are advised in writing by the Company that the use of the applicable prospectus may be resumed; provided, however, that, notwithstanding the foregoing, the Company may suspend use of the prospectus pursuant to Sections 10(b)(ii), 10(c)(iv) and 10(c)(v), and an Investor may be prohibited from selling or otherwise disposing of the Registrable Shares covered by the Registration Statement or prospectus, on not more than two occasions in total during any twelve-month period and for no more than ninety (90) days in the aggregate during any such twelve-month period. The Company shall use its best efforts to ensure the use of the prospectus may be resumed as soon as practicable. The Company shall use its best efforts to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the securities for sale in any jurisdiction, at the earliest practicable moment. The Company shall, upon the occurrence of any event contemplated by clause (iv), prepare a supplement or post-effective amendment to the Registration Statement or a supplement to the related prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Shares being sold thereunder, such prospectus will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

11.    Transfer of Registration Rights.    None of the rights of any Investor under this Agreement shall be transferred or assigned to any person unless (i) such person is a Qualifying Holder (as defined below), and (ii) such person agrees to become a party to, and be bound by, all of the terms and conditions of, this Agreement by duly executing and delivering to the Company an Instrument of Adherence in the form attached as Exhibit B hereto. For purposes of this Section 11, the term “Qualifying Holder” shall mean, with respect to any Investor, (i) any partner thereof, (ii) any corporation or partnership controlling, controlled by, under common control or under common investment management with, such Investor or any partner thereof, or (iii) any other direct transferee from such Investor of at least 50% of those Registrable Shares held or that may be acquired by such Investor. None of the rights of any Investor under this Agreement shall be transferred or assigned to any Person (including, without limitation, a Qualifying Holder) that acquires Registrable Shares in the event that and to the extent that such Person is eligible to resell such Registrable Shares pursuant to Rule 144(k) of the Securities Act or may otherwise resell all such Registrable Shares pursuant to an exemption from the registration provisions of the Securities Act.

12.    Entire Agreement.    This Agreement (including the exhibits hereto) constitutes and contains the entire agreement and understanding of the parties with respect to the subject matter hereof, and it also supersedes any and all prior negotiations, correspondence, agreements or understandings with respect to the subject matter hereof.

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13.    Miscellaneous.

(a)  Amendments.    This Agreement may not be amended, modified or terminated, and no rights or provisions may be waived, except with the written consent of the Majority Holders and the Company. Notwithstanding the foregoing, the Company may in its sole discretion amend this Agreement to add as parties to this Agreement additional purchasers of Common Stock pursuant to the Stock Purchase Agreement.

(b)    Governing Law.    This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California, and shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors or assigns, provided that the terms and conditions of Section 11 hereof are satisfied. This Agreement shall also be binding upon and inure to the benefit of any transferee of any of the Registrable Shares provided that the terms and conditions of Section 11 hereof are satisfied. Notwithstanding anything in this Agreement to the contrary, if at any time any Investor shall cease to own any Registrable Shares, all of such Investor’s rights under this Agreement shall immediately terminate.

(c)    Notices.

(i)    Any notices, reports or other correspondence (hereinafter collectively referred to as “correspondence”) required or permitted to be given hereunder shall be sent by mail, courier (overnight or same day) or telecopy or delivered by hand to the party to whom such correspondence is required or permitted to be given hereunder. The date of giving any notice shall be the date of its actual receipt.

(ii)    All correspondence to the Company shall be addressed as follows:

Sigma Designs, Inc.

1221 California Circle

Milpitas, CA 95035

Attention: Thinh Tran

Title: President and Chief Executive Officer

Fax: (408) 957-9740

with a copy to:

Wilson Sonsini Goodrich & Rosati

650 Page Mill Road

Palo Alto, California 94304

Attention: Don Williams

Fax (650) 496-4367

(iii)    All correspondence to any Investor shall be sent to the most recent address furnished by the Investor to the Company.

(iv)    Any Investor may change the address to which correspondence to it is to be addressed by notification as provided for herein.

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(d)    Injunctive Relief.    The parties acknowledge and agree that in the event of any breach of this Agreement, remedies at law may be inadequate, and each of the parties hereto shall be entitled to seek specific performance of the obligations of the other parties hereto and such appropriate injunctive relief as may be granted by a court of competent jurisdiction.

(e)    Attorney’s Fees.    If any action at law or in equity is necessary to enforce or interpret any of the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

(f)    Severability.    If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable under applicable law, such provision shall be replaced with a provision that accomplishes, to the extent possible, the original business purpose of such provision in a valid and enforceable manner, and the balance of the Agreement shall be interpreted as if such provision were so modified and shall be enforceable in accordance with its terms.

(g)    Aggregation of Shares.    Registrable Shares held or acquired by affiliated entities or persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

(h)    Counterparts.    This Agreement may be executed in a number of counterparts, any of which together shall for all purposes constitute one Agreement, binding on all the parties hereto notwithstanding that all such parties have not signed the same counterpart.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of the date and year first above written.

SIGMA DESIGNS, INC.
By:	/s/    THINH TRAN
Name: Thinh Tran Title: President and Chief Executive Officer

INVESTORS AIG DKR SoundShore Strategic Holdings Fund Ltd.
By:	/s/    ANTHONY GIORDANO
Name: Anthony Giordano Title: Director

AIG DKR SoundShore Opportunity Holding Fund Ltd.
By:	/s/    ANTHONY GIORDANO
Name: Anthony Giordano Title: Director

AIG DKR SoundShore Private Investors Holding Fund Ltd.
By:	/s/    ANTHONY GIORDANO
Name: Anthony Giordano Title: Director

AIG DKR SoundShore Holdings Ltd.
By:	/s/    ANTHONY GIORDANO
Name: Anthony Giordano Title: Director

Anfel Trading Limited
By:	/s/    ZVI LEVY
Name: Zvi Levy Title: P.O.A.

CAM CO.
By:	/s/    CHARLES ALPERT
Name: Charles Alpert Title: General Partner

Ching-Hai Chen
By:	/s/    CHING-HAI CHEN

Hyung Hwe Huh
By:	/s/    HYUNG HWE HUH

Chuyen M. Huynh
By:	/s/    CHUYEN M. HUYNH

FAME Associates
By:	/s/    ABRAHAM H. FRUCHTHANDLER
Name: Abraham H. Fruchthandler Title: General Partner

Ganot Corporation, a Delaware corporation
By:	/s/    SISEL KLURMAN
Name: Sisel Klurman Title: Director

Hershel Berkowitz
By:	/s/    HERSHEL BERKOWITZ

Orin Hirschman
By:	/s/    ORIN HIRSCHMAN

Jack M. Dodick
By:	/s/    JACK M. DODICK

Jason C. Chen and Hsienhui Chang TTEES Jason C. Chen and Hsienhui Chang U/A DTD 08/05/92
By:	/s/    JASON CHEN
Name: Jason Chen Title: Trustee

Micro Lambda Wireless, Inc.
By:	/s/    JOHN NGUYEN
Name: John Nguyen Title: President & CEO

Proximity Partners LP
By:	/s/    GEOFF CROSBY
Name: Geoff Crosby Title: General Partner

Richard Grossman
By:	/s/    RICHARD GROSSMAN

Steven Spira
By:	/s/    STEVEN SPIRA

Super Net Holding Limited
By:	/s/    MING-SEN WONG
Name: Ming-Sen Wong Title: Director

Exhibit A

SCHEDULE OF INITIAL INVESTORS

Exhibit B

INSTRUMENT OF ADHERENCE

Reference is hereby made to that certain Registration Rights Agreement, dated as of March 6, 2003, among Sigma Designs, Inc., a California corporation (the “Company”), the Initial Investors and the Investor Permitted Transferees, as amended and in effect from time to time (the “Registration Rights Agreement”). Capitalized terms used herein without definition shall have the respective meanings ascribed thereto in the Registration Rights Agreement.

The undersigned, in order to become the owner or holder of              shares of common stock, no par value per share (the “Common Stock”), of the Company, hereby agrees that, from and after the date hereof, the undersigned has become a party to the Registration Rights Agreement in the capacity of an Investor Permitted Transferee, and is entitled to all of the benefits under, and is subject to all of the obligations, restrictions and limitations set forth in, the Registration Rights Agreement that are applicable to Investor Permitted Transferees. This Instrument of Adherence shall take effect and shall become a part of the Registration Rights Agreement immediately upon execution.

Executed as of the date set forth below.

Signature:

Name:

Title:

Accepted: SIGMA DESIGNS, INC.
By:
	Thinh Tran President and Chief Executive Officer
Date:

EX-5.1

Exhibit 5.1

April 10, 2003

Sigma Designs, Inc.

1221 California Circle

Milpitas, California 95035

Re:    Registration Statement on Form S-3

Ladies and Gentlemen:

We have examined the Registration Statement on Form S-3 to be filed by you with the Securities and Exchange Commission on or about April 10, 2003 (the “Registration Statement”), in connection with the registration under the Securities Act of 1933, as amended, of a total of 1,606,644 shares of your Common Stock (the “Shares”). We understand that the Shares are to be sold from time to time on the Nasdaq National Market at prevailing prices or as otherwise described in the Registration Statement. As legal counsel for Sigma Designs, Inc., we have examined the proceedings taken by you in connection with the sale of the Shares.

It is our opinion that the Shares are legally and validly issued, fully paid and nonassessable.

We consent to the use of this opinion as an exhibit to the Registration Statement and further consent to the use of our name wherever appearing in the Registration Statement and any amendments to it.

Very truly yours,

/S/  WILSON SONSINI GOODRICH & ROSATI,

PROFESSIONAL CORPORATION