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DSP GROUP and STEPMIND Collaborate to Provide a Licensable GSM-GPRS-EDGE Solution

Santa Clara, California and Boulogne-Billancourt France - July 12, 2001 - DSP Group Inc. (NASDAQ: DSPG), a leading company in the development of high-performance, low-power licensable Digital Signal Processor (DSP) cores, and STEPMIND, a System-on-a-Chip design house for wireless applications, today announced that they are collaborating to provide a complete solution for a dual-mode GSM/GPRS/EDGE baseband processor, available for licensing to OEMs and Semiconductor companies. The licensable GSM/GPRS/EDGE baseband design incorporates DSP Group's most advanced licensable DSP core, the PalmDSPCore®.

The Silver-1 is a baseband processor dedicated to Class 12 GSM/GPRS/EDGE applications. It incorporates a PalmDSPCore sub-system which handles the GSM/GPRS/EDGE baseband processing, as well as the speech and the audio processing.

As a pioneering EDGE Baseband solution on the market, Silver-1 will achieve very high performance baseband functions at a very attractive cost, thanks to a high level of integration and very few off-chip components. The Silver-1 Baseband processor's generic interface matches most available commercial RF chips. STEPMIND's offering also includes an RF single chip transceiver.

The Silver-1's innovative design provides handset manufacturers a licensable solution that smoothly migrates from the traditional second generation GSM to the more powerful packet-based GPRS. Furthermore, GSM/GPRS network operators can offer 3G services by upgrading their existing base stations to support EDGE. EDGE allows up to three times the data rate per user time-slot of GPRS. Silver-1 will allow services with user data rates of up to 248kbit/s, more than is needed for the future 3G video-based services.

The Silver-1 allows terminal manufacturers to deliver innovative data services of up to 248kbit/s to the mobile handsets and frees these manufacturers from being tied to traditional silicon vendors, by providing to them the ability to produce their products with the lowest cost CMOS foundries. Furthermore, the use of industry standard processor cores and busses in an open architecture allows easy integration of WCDMA technology. This is critical as the population coverage of 3G will be limited in the initial roll-out phases. Dual-mode capability of handsets will provide the new 3G services while maintaining network availability acceptable to current systems' customers.

"We are happy to collaborate with DSP Group, a leading provider of programmable DSP cores," said Alain Jolivet, Chairman and CEO of STEPMIND. "Having an open architecture combined with the huge success of the SmartCores family within the cellular market, will make our offering appealing to GSM and the emerging GPRS equipment and chip manufacturers" added Alain Jolivet. "This collaboration will strengthen our offering in the 2.5G market. It is a major commitment for our customers and an important advantage for STEPMIND's services."

"Our collaboration with STEPMIND provides our licensees a flexible and scaleable licensable solution for the next generation cellular" said Bat-Sheva Ovadia, VP of Marketing and Business Development in the Technology Licensing Division of DSP Group. "Last year over 100 Million chips incorporating the SmartCores™ technology were sold in the cellular market. The Silver-1 which incorporates the PalmDSPCore offers our licensees a complete solution for migrating to the emerging 2.5G and 3G standards," she added.

PalmDSPCore is the latest generation of DSP Group's licensable SmartCores in the company's SmartCores family. Its target markets are 2.5G and 3G cellular handsets and base stations, broadband modems, Voice over IP gateways and consumer multimedia products.

PalmDSPCore is a dual MAC, low-power Digital Signal Processor offering powerful instruction level parallelism, and it has seven computation units working in parallel. The PalmDSPCore has a variable instruction width of 16/32 bits which enables a condensed program size, thus allowing for a low cost of the silicon die. The PalmDSPCore is a fully synthesizable 'soft core', allowing its adaptation to its manufacture at any foundry or at any process geometrics.

About DSP Group

DSP Group, Inc., is a global leader in the development and marketing of high-performance, cost-effective, licensable digital signal processing (DSP) cores. The company's family of DSP cores provides ideal solutions for low-power, cost-effective applications such as cellular, broadband communications, VoIP, multimedia, advanced telecommunications systems, disk-drive controllers, and many other controller applications. By combining its DSP core technologies with its proprietary, advanced speech-processing algorithms, DSP Group also delivers a wide range of enabling, application-specific integrated circuits (ICs) for full-featured, integrated-telephony products and applications, including 900 Megahertz and 2.4 Gigahertz wireless technologies. DSP Group maintains an international presence with offices located around the globe. More information about DSP Group is available from its Web site at www.dspg.com.

About STEPMIND

Founded in July 2000 by Alain and Andr? Jolivet, STEPMIND is the story of two brothers who decided, after having successful careers, to move on and start anew with their own company in wireless domain. STEPMIND is strongly capitalized, with a starting capital of more than 98 millions Euros and its staff of 55 is mainly composed of engineers with many years of successful technical expertise in the domain of digital wireless. STEPMIND operates in the field of Wireless High Speed Data, offering RF, Analog and Digital complex Systems on Chip Intellectual Property to OEM or Foundry customers. STEPMIND's offer starts from Technology analysis and SoC integration consulting to complete design of mixed signal and RF ASIC. For more information, please contact St?phane Galfr?, Communication Manager. E-mail : stephane.galfre@stepmind.com WWW : http://www.stepmind.com

Statements contained in this release concerning the visibility and future growth of DSP Group's business and the introduction, timing of releases and success of the products mentioned herein may constitute forward-looking statements. These statements involve certain risks and uncertainties such as the risk of acceptance of DSP Group's new products by existing OEM customers and potential customers, DSP Group's ability develop and produce its new products at competitive costs, and the expected performance of new products it may introduce. All forward-looking statements are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. These factors and other factors which may effect future operating results or our stock price are discussed under "RISK FACTORS" in our report on form 10-Q for the quarter ended March 31, 2001, which has been filed with the Securities and Exchange Commission and is also available on our Web site (www.dspg.com) under Investor Relations.

PalmDSPCore and SmartCores are registered or non-registered trademarks of DSP Group, Inc.Other brands and products referenced herein are the trademarks or registered trademarks of their respective holders.

Bat-Sheva Ovadia
VP Marketing & Business Development
Technology Licensing Division
DSP Group, Inc.
Tel: +972-9-952-9616
e-mail: batsheva@dsp.co.il

Alain Jolivet
Chairman and CEO
STEPMIND
Tel: + 33.1.41.10.29.10
e-mail: alain.jolivet@stepmind.com