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DSP Group Announces the Issue of 2.3 Million New Common Shares to an International Investment Fund

February 2, 1999, Santa Clara, CA, USA – DSP Group, Inc. (NASDAQ: DSPG) today announced that it has issued 2,300,000 new common shares of the company to Magnum Technologies, Ltd. (Magnum). These shares, representing 19.6% of its outstanding shares, were issued for a price of $15.00 per share, bringing the total net proceeds to the company to $34.5 Million.

As part of this agreement, Magnum is free to acquire additional shares of the company in the open market, bringing its total holdings to a maximum of 35% of the company's outstanding shares. Furthermore, Magnum has undertaken not to sell any of DSP Group's shares for a minimum period of one year following the date of this transaction and to be restricted for an additional period of six months under rule 144.

Additionally, the company has invited Magnum to appoint two new directors to its board, bringing the total number of board members to seven.

Commenting on the transaction, Mr. Igal Kohavi, Chairman of DSP Group said:

"We are pleased to have Magnum as a major shareholder of the company, thereby strengthening our shareholder base. Magnum's focus on communication ventures, coupled with its long term investment philosophy, makes them an ideal partner for our company".

Jean Manuel Rozan of Magnum stated, "We believe that DSP Group, being a world leader in DSP technology, is very well positioned to take advantage of the new and exciting opportunities in the areas of DSP technologies and wireless communication. We are also very impressed with the company's performance and its strong management".

DSP Group, Inc. is a leader in the development and marketing of high-performance, cost-effective digital signal processing cores used in a wide range of applications for industries such as wireless communications, telephony and personal computing. By combining its DSP core technology with its advanced speech processing algorithms, DSP Group also delivers a wide range of enabling application-specific DSPs. DSP Group is located in Santa Clara, California.

Additional information about DSP Group is available by calling (408) 986-4300. This and other press releases are also available through the company's News on Call fax service, which can be reached at (800) 758-5804, company code 112025.

For more information contact Michael Cohen at (408) 986-4424.

Michael Cohen
Investor Relations
DSP Group, Inc.
408-986-4300
mcohen@dspg.com