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DSP Group Completes Acquisition of VoicePump

Didier Boivin, formerly of Alcatel, Named VoicePump CEO

Santa Clara, Calif., March 5, 2001 — DSP Group Inc. (NASDAQ: DSPG), today announced that it has exercise its option to acquire the remaining founders' shares of VoicePump, Inc., for 161,433 shares of DSP Group common stock, as provided in the original stock-purchase agreement executed March 22, 2000.

As a result of the purchase of the remaining equity, VoicePump will become part of DSP Group's U.S.-based broadband products group and will continue to focus on the development of its VP100 family of products, first announced last October.

"In acquiring the remaining shares of VoicePump, we shall be able to expand our product line of emerging solutions for voice-over-broadband (VoB) gateways in the small-and medium-enterprise markets," noted Eli Ayalon, chairman and chief executive officer of DSP Group.

In a further development, Didier Boivin has been named chief executive officer of VoicePump. Boivin joins VoicePump from Alcatel, where he was general manager of Alcatel Microelectronics USA, the semiconductor arm of Belgium-based Alcatel (Paris: CGEP.PA; NYSE: ALA), a leading supplier of chip sets for asymmetrical digital subscriber line (ADSL) applications. At Microelectronics USA's headquarters in Texas, Boivin was responsible for sales and marketing of DSL modem chips to major DSL and integrated-access-device (IAD) OEMs in the United States.

"The addition of Didier Boivin to our senior management team, in combination with the purchase of the remaining VoicePump equity, demonstrates our commitment to VoicePump, its product line and the key role it will play in the future as part of DSP Group's long-term growth strategy," added Ayalon.

Boivin joins VoicePump as the Company approaches its first product shipment, following on the heels of its announcement last October of the VP100 family of solutions for VoB applications. The VP100 family of products is based on DSP Group's TeakLiteDSPCore® processor, which includes an integrated set of peripherals optimized for VoDSL IADs and other packet voice applications.

"With VoicePump joining DSP Group, we hope to be able to leverage the considerable engineering expertise and capital provided by DSP Group," stated Boivin. "DSP Group's resources and the entrepreneurial vision of VoicePump provide an opportunity to position VoicePump and its current and future product lines as low-cost, efficient applications for both VoDSL and VoIP (voice over Internet protocol) solutions."

About DSP Group, Inc.

DSP Group, Inc., is a global leader in the development and marketing of high-performance, cost-effective, licensable digital signal processing 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 embedded-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 MHz and 2.4 GHz wireless technologies. DSP Group, Inc., maintains an international presence with offices located around the globe.

About VoicePump, Inc.

VoicePump, Inc., specializes in speech coding and telecom algorithms for VoIP, VoDSL and other voice-over-packet applications developed for voice-gateway and customer-premise-equipment manufacturers and broadband-network providers. VoicePump was founded in 1993 as Analogical Systems, having changed its name to VoicePump in November 1999. In March 2000, DSP Group, Inc. acquired approximately 71 percent of VoicePump. The Company is headquartered in Palo Alto, Calif. and has offices in Schaumburg, Ill. and Israel.

Statements contained in this release concerning the expanded shipment of new products, VoicePump's ability to leverage the engineering expertise and capital provided by DSP Group, and the position of VoicePump and its current and future product lines may constitute forward-looking statements. Except for the historical information contained in this press release, the statements contained in this release (including those concerning the effect of the Company's increase in research and development expenses and its acquisition of VoicePump, Inc., the future growth of the Company's business and the demand for the Company's core technologies) are forward-looking statements within the meaning of the "safe harbor" provisions of The Private Securities Litigation Reform Act of 1995. These statements involve certain risks and uncertainties, including, but not limited to such as a slowdown in the U.S. consumer market, where most of the products, including the Company's ICs are sold; acceptance of VoicePump's and the Company's new products by existing original-equipment-manufacturer customers and potential customers; and the Company's ability to integrate the operations of VoicePump and to develop and produce its new products at competitive costs and other risks, which are more fully detailed in the risk factors section of our filings with the Securities and Exchange Commission, including our annual and quarterly reports. These risks and uncertainties could cause actual results to differ materially from those discussed in this release. DSP Group undertakes no obligation to publicly release the results of any revisions to such forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.