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DSP Group to Buyback 1 Million Additional Shares

SANTA CLARA, Calif., Aug. 2 /PRNewswire-FirstCall/ -- DSP Group, Inc. (Nasdaq: DSPG), a worldwide leader in developing and providing solutions for the residential wireless market, announced today that it repurchased 1,044,000 shares of its Common Stock during July 2004, at an average price of $20.53 per share, for an aggregate price of approximately $21.4 million.

After giving effect to the most recent repurchases, approximately 1.7 million shares of the Company's Common Stock remain authorized for repurchase under the current repurchase program approved by the Company's board of directors.

During 2003, DSP Group repurchased 746,000 shares of its Common Stock, at an average price of $21.66 per share, for an aggregate price of approximately $16.3 million. On June 30, 2004, the Company had cash, cash equivalents and marketable securities in the amount of approximately $321.5 million, which the Company currently believes is adequate to both fund its business growth and make additional repurchases as the Company so determines in the future.

Moshe Zelnik, VP Finance and CFO of DSP Group, stated, "We have strong confidence in our future business prospects and our ability to capitalize on new market opportunities. We believe that the buyback program that we have in place is a wise use of our cash and a good return on investment to our shareholders."

About DSP Group

DSP Group, Inc. is a fabless semiconductor company that is a worldwide leader in the short-range wireless market. By combining its DSP core technology with advanced RF CMOS, communication technology, video technology and speech-processing algorithms, DSP Group develops and provides a wide portfolio of short-range communication solutions, which are utilized for residential, SOHO, SME, enterprise and automotive applications. DSP Group solutions include digital 900MHz, 2.4GHz, DECT (1.9GHz), 5.8GHz and Bluetooth for voice, data and video communication as well as solutions for DVRs (Digital Voice Recorders) and MP3 applications. DSP Group also develops and markets embedded, integrated silicon/software solutions for Voice-over-Digital-Subscriber Line (VoDSL) and Voice-over-Internet-Protocol (VoIP) applications, as well as other Voice-over-Packet applications for Integrated Access Devices (IAD) and IP phones. More information about DSP Group is available at www.dspg.com.

Forward Looking Statements

This press release may contain statements that qualify as "forward-looking statements" under the Private Securities Litigation Reform Act of 1995, including statements about the sufficiency of the Company's cash, cash equivalents and marketable securities to both fund its business growth and repurchase additional stock and statements made by Mr. Zelnik relating to the Company's future business prospects and its ability to capitalize on new market opportunities. These forward-looking statements are based on current expectations and the Company assumes no obligation to update this information. In addition, the events described in these forward-looking statements may not actually arise. The Company's actual results could differ materially from those described in this press release as a result of various factors, including unexpected delays in the introduction of new products; failure to achieve broad market acceptance of existing and new products by existing and potential OEM customers; the inability to add new customers and develop and produce new products at competitive costs and in a timely manner; and general market demand for products that incorporate the Company's technology in the market. These factors and other factors which may affect future operating results are discussed under "RISK FACTORS" in the Form 10-K for the year ended December 31, 2003, as well as other reports the Company has filed with the Securities and Exchange Commission and which are available on its Web site (www.dspg.com) under Investor Relations.

For more information, contact
Yaniv Arieli
President of U.S. Operations
Investor Relations
DSP Group, Inc.
Tel: 408-986-4423
Fax: 408-986-4442
e-mail: yarieli@dspg.com

SOURCE DSP Group, Inc.
08/02/2004 CONTACT: Yaniv Arieli, President of U.S. Operations, Investor Relations, of DSP Group, Inc., +1-408-986-4423, or fax, +1-408-986-4442, or yarieli@dspg.com
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