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ACER, INC. Licenses G.723.1 Technology from DSP Group

G.723.1 is a Standards-based Speech Compression Technology for Videophones, Video Conferencing, and Internet Telephony

Santa Clara, Calif., May 26, 1998 -- DSP Group, Inc. (NASDAQ:DSPG) and Acer Inc. today announced that Acer has licensed the G.723.1 technology from DSP Group for use in its Videophone and Internet Telephony products. Acer Inc., with headquarters in Taiwan, is the world's third largest OEM and brand name manufacturer of computer components, peripherals, desktops, notebooks and servers.

"Because of its widespread adoption, G.723.1 has already enabled the communications industry with many unique products, such as Acer's video conferencing solutions using Acer's EasyAxess technologies. The products range from Internet phones to PC-based conferencing systems to set-top boxes, all of which can be interoperable," said Mr. Joseph Kwok, Senior Director of Software Engineering at Acer Advanced Labs. "Our licensing agreement will give Acer the opportunity to extend such products to Acer customers worldwide".

"Our agreement with Acer propels the industry further towards interoperability and high quality standards," commented Serdar Yurdakul, Vice President of Computer Telephony Products with DSP Group. "Acer's global presence will enable millions more consumers from around the world to take advantage of standards-based video telephony applications."

To date, G.723.1 has been licensed by Microsoft, Intel, PictureTel, NEC, Creative Labs, Fujitsu, Dialogic, US Robotics, 8x8, Rockwell, Natural Microsystems, Smith Micro, VDONet, RealNetworks (formerly VIVO Software), OnLive!, Voxware, and Netspeak, among others.

G.723.1, which combines low bit-rate compression with toll-quality communications at highly compressed rates of 6.3 and 5.3 Kbps, was originally developed for videophone and video conferencing applications over PSTN (Public Switched Telephone Network) and adopted by the International Telecommunications Union (ITU) in 1996 for H.324 applications. Developed by AudioCodes, DSP Group, France Telecom and the University of Sherbrooke, G.723.1 was also selected by the International Multimedia Teleconferencing Consortium (IMTC), a non-profit industry organization with membership of over 140 companies, as the low bitrate speech coder for H.323 Internet Telephony applications. Central to the IMTC's decision process was the issue of interoperability among multiple vendor products. DSP Group licenses the TrueSpeech G.723.1 technology on behalf of AudioCodes Ltd., DSP Group, France Telecom and the University of Sherbrooke.

DSP Group offers flexible options for developing applications using G.723.1. In addition to patent and software licensing, DSP Group offers the CT8000 product family, a family of coprocessors optimized for conferencing. The CT8020 and CT8021 are application-specific DSPs with various value-added functions, such as acoustical echo cancellation and other telephony features.

ABOUT DSPG

Founded in 1987, DSP Group is a global leader in the development and marketing of high-performance, cost-effective digital signal processing (DSP) solutions for the consumer telephone, computer telephony and personal computer industries. By combining three key technologies--digital signal processors, speech compression algorithms and telephony algorithms--the company delivers a wide range of integrated circuit products and technologies to manufacturers of telephones, computers and consumer electronics. For more information, visit DSP Group's website at http://www.dspg.com.

ABOUT ACER

Established in 1976, Acer is world's 3rd largest computer manufacturer and 8th PC brand, offering a broad selection of industry-leading, high-end multiuser servers, multimedia PCs, notebooks, computer peripherals and components, and communications devices. More than 23,000 employees and 120 enterprises are found worldwide in 44 countries, supporting dealers and distributors in over 100 countries. The Acer Group's turnover in 1997 was US$6.3 billion. For more information, visit Acer Group's website at http://www.acer.com.tw.

TrueSpeech is a trademark of DSP Group, Inc. Acer is a trademark of Acer Incorporated. All other products, brand names or companies are trademarks or registered trademarks of their respective companies.

Yizhar Ganor
Dir. Investor Relations
DSP Group, Inc.
(408) 986-4424