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DSP Group and NXP Semiconductors Announce the Completion of the Cordless & Voice over IP Terminals Transaction

SAN JOSE, Calif., and EINDHOVEN, Netherlands, Sept. 5 /PRNewswire- FirstCall/ -- DSP Group, Inc. (Nasdaq: DSPG) and NXP Semiconductors, the independent semiconductor company founded by Philips, today announced the completion of DSP Group's acquisition of NXP's Cordless and VoIP terminals business. The transaction, which was initially announced on May 14, 2007, involved the initial payment by DSP Group of approximately $270 million, consisting of approximately $200 million in cash and 4,186,603 newly issued shares of DSP Group's common stock. As a result of the transaction, NXP now owns approximately 13% of DSP Group's outstanding common stock and an NXP nominee will be appointed to DSP Group's board of directors as a Class III director to serve until DSP Group's annual meeting of stockholders in 2009.

DSP Group expects the transaction will have a positive impact on earnings per share beginning in the fourth quarter of 2007, excluding transaction expenses, intangible amortization and related one time charges in connection with the acquisition.

DSP Group will update its financial outlook for the combined operations and discuss the integration process on its scheduled third quarter results earnings conference call on October 31, 2007.

About DSP Group

DSP Group, Inc. is a fabless semiconductor company, offering advanced chip-set solutions for a variety of applications. DSP Group is a worldwide leader in the short-range wireless communication market, enabling home networking convergence for voice, video & data. By combining its in-house technologies of Digital Signal Processors (DSPs), portfolio of wireless communication protocols, including DECT, Bluetooth and Wi-Fi, most advanced Radio Frequency CMOS and SiGe, as well as VoIP ICs, DSP Group is a worldwide leader and a one-stop-shop for a wide range of applications. These applications include ISM band digital 900MHz, 2.4GHz and 5.8GHz telephony, European DECT (1.9GHz) telephony, Bluetooth systems for voice, data and video communication and deployment in residential, SOHO, SME, enterprise and automotive applications. DSP Group ICs provide solutions for MP3 players, VoIP Phones, Gateways, and Integrated Access Devices and are widely used in Digital Voice Recorders. More information about DSP Group is available at http://www.dspg.com.

About NXP

NXP is a top 10 semiconductor company founded by Philips more than 50 years ago. Headquartered in Europe, the company has 37,000 employees working in more than 20 countries and posted sales of EUR 5 billion in 2006. NXP creates semiconductors, system solutions and software that deliver better sensory experiences in mobile phones, personal media players, TVs, set-top boxes, identification applications, cars and a wide range of other electronic

devices. News from NXP is located at http://www.nxp.com.

Forward-looking statements of DSP Group

This press release contains forward-looking statements with respect to the transaction, including the positive impact on DSP Group's EPS. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected, expressed or implied by such forward-looking statements, including, but not limited to: the risk that the business will not be integrated successfully; the risk that the revenue potentials, cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; disruptions in the business that makes it more difficult for DSP Group to maintain relationships with customers, employees or suppliers and other risks and uncertainties associated with the integration. Actual results could differ materially from those discussed in or implied by forward-looking statements for various reasons, including those discussed in "Risk Factors" in DSP Group's Form 10-Q for the quarter ended June 30, 2007. You should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, DSP Group undertakes no obligation to publish, update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

CONTACT:
NXP
Lieke de Jong-Tops
lieke.de.jong-tops@nxp.com+31 (0)40 2725202

DSP Group
Ofer Elyakim,
ofere@dsp.co.il
+1 (408) 986-4421

SOURCE DSP Group, Inc.
09/05/2007
CONTACT: Lieke de Jong-Tops of NXP, +31-0-40-2725202,
lieke.de.jong-tops@nxp.com; or Ofer Elyakim of DSP Group, +1-408-986-4421, ofere@dsp.co.il
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Web site: http://www.dspg.com
http://www.nxp.com