DSP GROUP INC. Unveils a new system-on-a-chip (S.O.C.) Solution for digital voice recorders and digital music players

SANTA CLARA, Calif., -- Jan. 8, 2003 -- DSP Group Inc. (NASDAQ: DSPG), a worldwide leader in developing and providing Total Telephony Solutions™ and short range wireless products, today announced the availability of a new member of its Digital Voice Recorder (DVR) processor product line.

The new chip (D36541) is a highly integrated processor with the flexibility of providing a choice of music playbacks in MP3 format as well as five different speech compression rates. The D36541 includes the analog Stereo CODEC and amplifiers integrated on a single chip, it offers in addition, DSP Group's patented Flexispeech® variable speed playback, Noise Reduction algorithm and high performance Hybrid Automatic Gain Control to enable top quality voice recording. DSP Group's popular Truespeech® Triple Rate CODER®, which is incorporated in this solution, provides up to 12 hours of speech recording in Long Play mode on single 64Mbit flash keeping high quality of speech, or up to 6 hours of speech recording in Standard Play mode with superior quality of speech.

Victor Koretsky, V.P. Sales and Marketing at DSP Group stated: "DSP Group has a dominant position in the fast growing market of digital voice recorders, the new product is a demonstration of our continuous commitment to supply the most advanced and cost effective S.O.C. solutions to our markets".

In addition, the new chip is perfectly suited for voice enabled Digital Still Cameras, having everything necessary to provide high quality voice recording as a voice tag for pictures.

Price and Availability
The D36541 samples are available immediately in 100-pin PQFP and small footprint LQFP packages, priced at $6.0 for 10k quantities.

International CES - Las Vegas
DSP Group will be presenting at the 2003 International CES, in Las Vegas on January 9 - January 12, 2003. Our booth will be located in the Bluetooth Pavilion, South Hall 3, booth # 3514 SE. We welcome your visit.

About DSPG
DSP Group, Inc. is a semiconductor fabless company that is a leader in the short-range wireless market. By combining its DSP cores technology with advanced RF, communication technology and speech-processing algorithms, DSP Group is a worldwide leader in developing and providing Total Telephony Solutions™. These applications include digital 900MHz, 2.4GHz, DECT (1.9GHz), 5.8GHz and Bluetooth for voice and data communication in residential, SOHO, SME, enterprise and automotive applications. DSP Group's advanced RF CMOS and communications technology provides the company with a clear path to a Phone-on-a-Chip™ solution. DSP Group also develops and markets embedded, integrated silicon/software solution for Voice-over-Digital-Subscriber Line (VoDSL), Voice-over-Internet-Protocol (VoIP) applications, and other Voice over Packet applications for Integrated Access Device (IAD) and IP Phone. More information about DSP Group is available at www.dspg.com

This press release may contains statements that qualify as "forward-looking statements" under the Private Securities Litigation Reform Act of 1995, including statements made by Mr. Koretsky about DSP Group's dominance as a chip supplier in the digital voice recorder market, as well as DSP Group's long-term strategy and sales and marketing efforts with respect to the DVR & music player application markets. These forward-looking statements are based on current expectations and DSP Group assumes no obligation to update this information. In addition, the events described in these forward-looking statements may not actually arise. DSP Group's actual results could differ materially from those described in this press release as a result of various factors, including, the acceptance by customers in the digital voice recorder market of DSP Group's products, DSP Group's ability to differentiate its products from those of its competitors in the same market and the general market demand for products that incorporate DSP Group's technology in the market. These factors and other factors which may effect future operating results or DSP Group's stock price are discussed under "RISK FACTORS" in the Form 10-K for the year ended December 31, 2001 as well as other report, including Form 10-Qs, DSP Group has filed with the Securities and Exchange Commission and which are available on DSP Group's Web site (www.dspg.com) under Investor Relations. Total Telephony Solutions and Phone-on-a-Chip are trademarks of DSP Group, Inc. Truespeech, Triple Rate CODER and Flexispeech are registered trademark of DSP Group, Inc.