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DSP Group and Winbond Collaborate on Cost Effective Video Phone and Video Conferencing Solution

Stand-Alone and PC-Based Video Phone Over POTS - an Affordable Reality

SANTA CLARA and SAN JOSE, Calif., Nov. 5, 1997 -- DSP Group, Inc. (Nasdaq:DSPG) and Winbond Systems Laboratory announced today a marketing alliance to provide a comprehensive ``reference design'' that enables OEMs to shorten their time-to-market with a desktop video conferencing and video phone subsystem. This collaboration marks the first for both companies to work together to achieve a new level of cost effectiveness for a PCI-based hardware solution. In OEM quantities, the total bill-of-material cost of this ``reference design'' is expected to be $69.

The companies plan to prepare ``reference design'' using DSP Group's CT8020, TrueSpeech G.723.1 co-processor and Winbond's W9960CF, Video Codec with PCI interface. The ``reference design'' kit comes bundled with one PCI adapter card, a Winbond developed software driver (and its free one-time-use license), design manual and schematics. Technical support is provided by both companies for their respective products. The ``reference design'' kit will be available from either company in December, 1997.

The DSP Group and Winbond combined solution provides a high performance, PC-based video conferencing solution at cutting edge price point. It takes advantage of dedicated hardware based approach to increase performance and reduces dependency on the host CPU. Meanwhile, the host is retained to perform higher level protocols and the application execution. In a nut shell, the RISC-based W9960CF performs H.263 video compression and decompression, motion compensation at CIF and QCIF resolutions. Further, it talks to the PCI bus and the CT8020. On the other hand, the CT8020 performs audio and telephony functions, such as G.723.1 compression and decompression and concurrent acoustical echo cancellation for hands-free operation. The companies will be demonstrating the reference design during TeleCon XVII and Fall Comdex shows.

``I found the combination of DSP Group CT8020 and Winbond W9960CF most compelling as a hardware solution due to minimal component count, low cost but high performance. The performance afforded by this design implementation reduces the demand on the horsepower of the host CPU'', said Ron Adams, Director of Strategic Marketing at Wearnes Peripherals USA, a San Jose-based operation of Wearnes of Singapore. Wearnes Peripherals is currently evaluating the CT8020 and W9960CF.

Winbond Systems Laboratory is a US-based division of Winbond Electronics, a world class semiconductor manufacturer. Winbond's product portfolio covers all applications in all market segments. It is the largest merchant IC product manufacturer in Taiwan.

``We are very fortunate to have the DSP Group as our marketing partner,'' said Wen C. Chu, Winbond's Director of Marketing. ``Technically and functionally, the match is made in heaven. Imagine the world of video without audio; and vice versa.''

Vice President of Computer Telephone Product Line, Serdar Yurdakul of DSP Group echoed, ``With this partnership, we now have a H.324 and H.323 standards compliant video phone solution for the PC platforms and for the long awaited stand-alone video phone with the price point that could potentially trigger substantial market growth. Winbond and DSP Group are ready to take the lead in that market,'' he added.

About DSP Group, Inc.

DSP Group, Inc. develops and markets enabling digital signal processing and digital speech technologies and products for the PC, multimedia communications and consumer markets. Headquartered in Santa Clara, California, the Company offers DSP algorithms, DSP core technology, and families of speech and telephony co-processors. The various versions of TrueSpeech® compression and decompression software are now implemented in approximately 100 products from 50 companies worldwide. DSP Group provides integrated DSP-based solutions such as the D6000 family of digital answering devices for consumer applications; and the CT8000 family for desktop/mobile telephony and teleconferencing products. Pine- and Oak-DSP Core® designs are licensed to major semiconductor companies for efficient development of application specific integrated circuits. See DSP Group at Comdex in booth M2587, Sands Expo Center.

About Winbond Systems Laboratory

A wholly-owned subsidiary of Winbond Electronics Corporation of Taiwan, Winbond Systems Laboratory is a San Jose-based design and development center. Working jointly with engineers in Taiwan, designers at WSL develop system solutions for the company's OEM customers. Current active products include systems ASIC devices such as computer peripheral ICs and PC chipsets. Furthermore, WSL has recently launched new solution in video conferencing for the desktop, such as USB camera module and USB camera.

For more information, visit company web site at http://www.winbond.com.tw

TrueSpeech is a registered trademark of DSP Group, Inc. PineDSPCore, OakDSPCore and PalmDSPCore are trademarks of DSP Group, Inc

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

Serdar Yurdakul V.P. Computer Telephony Products
DSP Group, Inc.
(408) 986-4300
syurdakul@dspg.com

Wen C. Chu,
Director of Marketing
Winbond Systems Lab
Winbond Elec. Corp. America
(408) 943-6666

Ms. Clora Yeung
Marcom Specialist
Winbond Systems Lab
(408) 474-1611