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DSP Group Named the 'Clear Leader' In the Licensed-Core DSP Cellphone Market

SANTA CLARA, California, April 5 , 2001 - DSP Group (NASDAQ:DSPG), the leading developer and marketer of high-performance, cost-effective, licensable digital signal processing cores, today announced that it has been named the "clear leader" in the embedded DSP cellular handset phone market, in a recent market research report published by Forward Concepts.

According to Forward Concepts, 416 million cellular handsets were shipped last year and 124 million units, representing almost 30% of the total were based on licensed-core DSPs. DSP chips from traditional DSP vendors were in the other 70%. Of those based on licensed-core DSPs, the market research firm estimates that DSP Group-licensed intellectual property was in an estimated 67%, or 83 million units, making its IP the clear market leader in licensed-core DSP chips used in cellular handsets and a substantial number-two, with almost a fifth of the overall worldwide market (20%).

Will Strauss, president of Forward Concepts said, "Digital wireless is the largest market for both traditional DSPs and licensed-core DSPs, and it's clear that DSP Group dominates the market for licensed-core DSPs in cellular terminals. Our analysis indicates that only Texas Instruments, the largest traditional DSP supplier, exceeds DSP Group's IP in the number of cell phones shipped in 2000."

Responding to the market research firm's analysis, Eli Ayalon, Chairman and CEO of DSP Group said, "Actually, over 100 million cores based on DSP Group's IP were shipped into the cellular market in 2000, but we acknowledge that some percentage are in inventory items or in finished goods that have not yet shipped. This market assessment validates the success of the years of development we have made in our advanced DSP Core technology coupled with our extensive support to licensees. This has resulted in our position as the number two worldwide supplier of DSP solutions for the cellular handset market, and as market leader for the licensed-core DSP market. Recently we have also seen more and more licensees adopting our DSP cores for not only 3G cellular but also for other applications, such as xDSL modems, VoIP, and consumer electronics."

He went on to say, "This year, cellular shipments by our licensees include chips based on our OakDSPCore® and TeakLite® implementations, as well as planned implementations of new designs for 2.5G and 3G cellular handsets employing our Teak® and PalmDSPCore®. In addition, we are seeing an increasing number of third parties, especially software companies, supporting products based on our IP."

About DSP Group's SmartCores™

DSP Group's SmartCores family of low-power fixed-point licensable DSP cores offer range of performance, price and power consumption balances, addressing a wide range of applications, from low-end, high-volume applications, such as digital answering machines, hard disk controllers, low speed modems and Voice over IP terminals, to high performance applications such as third generation (3G) cellular communications, broadband modems, consumer multimedia and Voice over IP gateways.

SmartCores licensees can benefit from the technology in the following manners

-- Fully synthesizable soft core which allow porting to any process or foundry

-- Code compatible - re-use legacy code and significantly shorten time to market

-- Low power consumption

-- High code density - to reduce chip cost

-- Various performance level - starting with single-MAC (OakDSPCore and TeakLite) architecture to Dual-MAC (Teak) and Dual-MAC with Instruction Level Parallelism (PalmDSPCore).

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-driven applications such as cellular, broadband communication, VoIP, multimedia, advanced telecommunication systems, disk drive controllers and many other types of embedded control 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 ICs for full-featured integrated telephony products and digital cordless applications. DSP Group, Inc., maintains an international presence with offices located around the globe. Additional information is available on the World Wide Web at: http://www.dspg.com

Statements contained in this release may constitute forward-looking statements. These statements involve certain risks and uncertainties such as acceptance of the company's new products by existing OEM customers, potential customers, the possibility that anticipated products based on the company's technology may not be released and the company's ability continue to add licensees and to develop and produce its new products at competitive costs. 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-K for the year ended December 31, 2000, which has been filed with the Securities and Exchange Commission and is also available on our website (www.dspg.com) under Investor Relations.

PalmDSPCore, TeakDSPCore, Teak, TeakLite, OakDSPCore and SmartCores are registered or non-registered trademarks of DSP Group, Inc.

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