DSP Group Issues "Setting the Record Straight" White Paper on Starboard's May 13, 2013 Presentation

DSP Group Issues "Setting the Record Straight" White Paper on Starboard's May
13, 2013 Presentation

SAN JOSE, Calif., May 23, 2013 (GLOBE NEWSWIRE) -- DSP Group^®, Inc.
(Nasdaq:DSPG), a leading global provider of wireless chipset solutions for
converged communications, said today that it has filed the following White
Paper with the Securities and Exchange Commission that sets the record
straight on a number of factually inaccurate statements and misleading data
points in Starboard's May 13, 2013 presentation.

Included below is a text version of the "Setting the Record Straight" White
Paper. For a full version please press on the link below:
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTg3ODc3fENoaWxkSUQ9LTF8VHlwZT0z&t=1

We believe that Starboard's presentation filed on May 13, 2013 contained a
large number of factually inaccurate statements and misleading data points in
its attempt to gain support for its slate of hand-picked nominees to DSP
Group's Board.

This White Paper seeks to set the record straight and allow shareholders to
reach an independent and informed decision based on the facts.

          STARBOARD'S ARGUMENTS FOR CHANGE ARE FALSE AND MISLEADING

Starboard Ignores the Company's Recent Operating Success

Starboard's claims that the Company's operating performance has been "abysmal"
are entirely false and ignore our recent operating success.

DSP Group has completed six consecutive quarters of operational improvements,
measured across all key metrics. Our latest quarter provided more evidence of
our successful turnaround as we exceeded our guidance across almost every
financial metric. We also have delivered solid guidance above expectations for
the second quarter. The Company achieved a milestone in 2013 by returning to
positive GAAP net income. Our focus remains strong execution to enhance
shareholder value.Below are some highlights of our performance during the
first three months of the year.

  *GAAP EPS of $0.05 and non-GAAP diluted EPS of $0.11, both above consensus
    expectations
    
  *Gross margins of 39.6% exceeded guidance and improved for the sixth
    consecutive quarter
    
  *Despite a difficult environment, EBITDA increased for the sixth
    consecutive quarter to $2.6 million, reaching 7% of revenues

Our Promising Growth Potential

Our growth strategy is working although Starboard will not admit to this fact.
A snapshot of our Board's and management's prudent plan for growth is below:

  *Three new product launches have successfully expanded the Company's total
    addressable market over ten-fold, to greater than 1 billion units.
    
  *We are leveraging R&D investments in cordless telephony, our core
    competence, to drive revenues in new opportunities in cellular and
    enterprise telephony.This has enabled the company to maintain below
    average industry R&D spend, without sacrificing revenue growth.
    
  *New products, targeted at the growing mobile, enterprise and home
    automation markets, are gaining traction with significant design wins
    secured so far this year.

Here is some additional color within each market segment we currently address:

1. The Home Segment:

  *In 2012, DSP Group became the market leader in DECT connectivity in the
    Home Gateway (HGW) market, and so far in 2013 the Company has further
    expanded its leadership position by shipping twice the volume that was
    shipped in 2012.
    
  *In 2013, DSP Group is shipping HGW products to13 different service
    providers worldwide compared to just 7 service providers in 2012,
    demonstrating solid growth and the positive dynamics in the market
    favoring DECT integration into HGWs.
    
  *DECT is evolving from a voice-only wireless standard into a control
    network ecosystem for home and building automation via new ULE (Ultra Low
    Energy) protocols. We took a big step forward with formation of ULE
    Alliance during the first quarter and the publication of ULE standard
    specifications by the European Telecommunications Standards Institute.

2. The Office/Enterprise Segment:

  *During the first quarter of 2013, DSP Group reported that its VoIP
    revenues targeting the Office/Enterprise market increased 39%
    year-over-year.This year, DSP Group is shipping its products to twice as
    many VoIP end products vs. a year ago.
    
  *The Company expects to achieve 16% of the total market design wins by the
    end of this year and to grow aggressively in 2014 with new Tier 1 volume
    replacingan incumbent supplier that bowed out of the market.
    
  *Our newest VoIP processor, DVF99, was launched in January and has already
    secured three design wins.We expect to ramp up mass production during the
    fourth quarter.

Starboard Uses Misleading Data to Portray DSP Group as Overspending on R&D and
Acquisitions

Starboard claims that DSP Group's spending on R&D and acquisitions have
"destroyed shareholder value."This claim also is false and, as we show below,
they use inconsistent and incorrect data to try to make their point.

  *Contrary to what Starboard asserts, DSP Group invests significantly less
    than its peers in R&D as a percentage of revenues, and the Company's
    focused R&D efforts have been productive, with the launch of three new,
    best-in-class products in key growth markets since the beginning of
    2013.These new product launches have increased the Company's total
    addressable market ten-fold. 
    
  *An analysis of 2012 R&D spending as a percentage of sales shows that our
    peer group has R&D spend approaching 38% of sales versus 26% for the
    Company.Additionally, over the past 5 years, DSP Group has generated $1.1
    billion in revenues, 25.5% of which was spent on R&D.This ratio is well
    below our peer group. Our R&D spending is efficient:the new chipsets
    resulting from the Company's prudent R&D efforts are all cutting-edge and
    generating warranted attention among significant players in our
    markets.It also should be noted the R&D spend directed towards defending
    and growing DSP Group's position as the global leader in DECT has been
    successful.

  http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTg3ODc3fENoaWxkSUQ9LTF8VHlwZT0z&t=1

  *It is misleading for Starboard to state in their presentation that "over
    the last 5 years alone, DSP has spent approximately $557 million in R&D
    and acquisitions."Starboard has overstated the Company's spending by $265
    million over that timeframe.The Company has invested $293 million or
    25.5% of sales on R&D and acquisitions in the past 5 years ($282 million
    towards R&D & $11 million to acquire BoneTone Communications) and the
    technologies developed from these investments have positioned the Company
    for top line growth and profitability in the coming years.
    
  *Starboard's presentation of DSP Group's investments in R&D and
    acquisitions on a per share basis is flawed because they use current
    shares outstanding instead of the number of shares outstanding at the time
    of the related expenditures.Starboard's approach ignores the Company's
    substantial buybacks of common stock from 2007 through 2013.These
    buybacks led to a 27% reduction in shares outstanding (21.9 million shares
    today, reduced from 31.8 million shares as of December 2007) and returned
    $87 million to stockholders.
    
  *Starboard also fails to acknowledge the importance of the Company's 2007
    acquisition of NXP Semiconductors' DECT operating division.This
    acquisition included the full operations of NXP's DECT division:sales,
    employees, offices and other overhead and infrastructure.Starboard
    includes the cost of this acquisition in their claim that the Company has
    overspent on R&D and acquisitions.The NXP acquisition has been crucial to
    the Company's success within the DECT segment and the profitability of its
    DECT cordless business.Prior to the NXP acquisition in 2007, DSP Group
    generated over two-thirds of its revenues from its 2.4 GHz and 5.8 GHz
    cordless telephones for the US market. 
    
  *The Board and management realized that this business was at risk as the
    world of cordless telephony transitioned to DECT standards.The NXP
    acquisition solidified the Company's position in DECT and demonstrated the
    Board's tremendous foresight given the precipitous decline in the market
    for 2.4 GHz and 5.8 GHz cordless telephony.In the three years up to and
    including the NXP deal, 2.4 GHz and 5.8 GHz cordless telephony generated
    $376 million in revenues for the Company. In the past three years, 2.4
    GHz and 5.8 GHz cordless telephony has generated only $60 million for the
    Company out of $580 million in revenues for the same period, and just
    $11.3 million in 2012 out of approximately $163 million in revenues, which
    are a direct outcome of the NXP acquisition.

Setting the Record Straight on CEVA

Starboard misrepresents the nature of the Company's relationship with CEVA
(Nasdaq:CEVA),a licensor of silicon intellectual property, DSP cores and
platform solutions for the mobile, portable and consumer electronics market,
and the role the Board and the Company's outside counsel have played in
transactions between the Company and CEVA.

  *To fully understand DSP Group's relationship with CEVA, its history with
    the Company must be understood.CEVA spun off from the Company in 2002, at
    which point we received a license from CEVA for use of the DSP core
    technology that has formed the backbone of our product line, including all
    of the Company's voice codecs and algorithms.By licensing IP cores for a
    license fee typically measured in the low hundreds of thousands of
    dollars, we save tens of millions of dollars in development costs that
    would otherwise be spent porting, rewriting and optimizing complex
    software.Our knowledge of CEVA and its technology makes them a logical
    fit.Licensing decisions are made by management acting in the ordinary
    course of business, without direct involvement by the Board of Directors
    or any involvement by outside counsel.
    
  *When the Company determined to develop a voice enhancement chip for mobile
    devices, we needed to ensure the speed and efficiency of the technology, a
    short development timeframe and cost-efficiency.All negotiations between
    DSP Group and CEVA were done by the companies' respective management teams
    and all decisions were made based purely on business
    considerations.Before selecting CEVA in March 2013, we engaged in a
    thorough review of alternatives, such as ARM, Tensilica and others, to
    determine which product was best positioned from a commercial and
    technical point of view, as we always do when selecting among
    suppliers.We concluded that CEVA's Teaklite III product was the best in
    performance and the most cost effective solution for our HDClear product.
    
  *Moreover, Starboard's suggestion that we re-enter the licensing business
    and compete with CEVA on DSP core licensing demonstrates their failure to
    understand our business. Furthermore, it contradicts their own claim that
    the Company spends too much on R&D, as a typical R&D expense level for an
    IP licensing company is 35% to 45% of revenues, as compared to 26% in our
    business model.Moreover, the Company would have to spend millions of
    dollars and many man years to port our entire software suite to a new
    core.
    
  *The Company's licensing arrangement with CEVA was entered into in the
    ordinary course, was not material to either company and, as a result, the
    license agreement was not submitted to the Board of either company for
    approval.There was no opportunity for any Board member or our outside
    counsel to unduly or incorrectly influence the selection process and
    assertions to the contrary by Starboard have been trumped up in an attempt
    to gain an advantage in the proxy fight.Statements that certain of the
    Company's directors and its outside counsel were involved in the Company's
    decisions with respect to this licensing matters, or that they were in a
    position to influence the Company's decision-making with respect to this
    matter, are simply false.
    
  *Starboard also asserts that Bruce Mann, Esq., a partner in the law firm
    that represents the Company, is "Lead Independent Director of CEVA,"
    presumably in an attempt to make the connections between the two companies
    seem more significant than they are.Mr. Mann is not the Lead Independent
    Director of CEVA—in fact, he has not held this role since May 2005.

Starboard has distorted the facts with respect to the Company's business
dealings with CEVA in a blatant attempt to divert shareholder focus away from
the Board's loyalty, hard work and dedication.The Board is focused on
continuing DSP Group's successful turnaround, with increased profitability and
a solid strategic plan to maximize long-term shareholder value.

It should also be noted that, according to CEVA's recent proxy statement,
neither Eli Ayalon nor Zvi Limon has any stock ownership in CEVA.Both have
only outstanding options granted to all directors of CEVA and both held less
than 1% of CEVA's outstanding equity.In comparison, according to DSP Group's
recent proxy statement, Messrs. Ayalon and Limon held approximately 2.3% and
1.1% of DSPG's outstanding equity, respectively.

Starboard's Description of Our HDClear Development Efforts Is Misleading

HDClear is DSP Group's proprietary noise cancellation and voice enhancement
technology based on algorithms originally developed by BoneTone
Communications, which we acquired in the fourth quarter of 2011 to address
noise cancellation in headsets.

  *DSP Group made a strategic decision in 2012 to bypass the relatively small
    unit opportunity in headsets to focus on creating a solution for the
    significantly larger mobile market, including smartphones, through
    additional innovation and development.
    
  *In February, we launched our HDClear product for mobile devices at Mobile
    World Congress in Barcelona featuring proprietary noise cancellation
    algorithms and powerful acoustic echo cancellation abilities.
    
  *Starboard highlights various comments around HDClear with respect to our
    projections being "pushed out" continuously. What Starboard fails to
    mention is that in between 2011 and 2012 a major strategic change occurred
    and that our new path forward to the mobile market holds a significantly
    higher potential return for the Company and its shareholders.
    
  *We are on track to deliver engineering samples of the new DBMD2 IC this
    month, and have already begun evaluations with leading OEMs and mobile
    network operators.The Company is confident in its strategy to
    commercialize its HDClear by offering a voice enhancement processor with a
    dedicated IC, low power consumption, a small footprint and equipped with a
    full suite of algorithms. Our offering matches well with products and
    roadmaps of key players in the market like Audience, which focuses on this
    market with a standalone IC.With that said, licensing our IP to OEMs or
    merchant silicon vendors remains a future option which we open to.

Starboard Uses Misleading Data Around Comparison to Sitel Semiconductors

Starboard draws a misleading comparison between DSP Group and SiTel
Semiconductors, arguing that the businesses between 2005 and 2011 were
comparable and that DSP Group should have similar results to those of SiTel.

  *Throughout this period, SiTel was a private company that was being managed
    within a private equity firm, with the goal of an eventual sale.The
    comparison to DSP Group, therefore, is irrelevant and misleading. In
    addition, Starboard compares SiTel's results for these periods to the
    consolidated results of DSP Group, which includes investments in new
    growth areas and not to the relevant segments in DSP Group's financials.
    
  *Sitel was acquired in early 2011 by Dialog Semiconductors, a public
    company, thereby making comparisons more relevant for more recent
    periods.The table below compares the Connectivity segment in Dialog
    Semiconductors' financials to the Home and Offices segments in DSP Group's
    financial statements, as both include the cordless and VoIP businesses.As
    the below table shows, for both 2012 and the first quarter of 2013, the
    Connectivity segment of Dialog Semiconductors (the ex-SiTel business)
    underperforms DSP Group's Home and VoIP segments.The Home & Offices
    segments of DSP Group generated 6% and 14% of operating income as a
    percentage of revenues for the year 2012 and the first quarter of 2013,
    significantly outperforming Dialog, which had an operating loss and income
    of 4% as a percentage of revenues over the same timeframe.

  A Comparison of DSP Group Segment Reporting Information to Dialog
  Semiconductors

                        DSP Group                  Dialog Semiconductors
                         Home & Office segments (*)  Connectivity segment (**)
                        Year 2012       Q1 2013     Year 2012     Q1 2013
  Revenues               $162.8M         $39.6M      $96.1M        $20.6M
  Operating income as    $9.9M           $5.0M       ($6.3)M       $0.9M
  reported
  Operating income as %  6%              14%         LOSS          4%
  of revenues
                                                               
  (*) Operating income for DSP Group is based on the filed 10-K and 10-Q for
  the year ended December 31, 2012 and the quarter ended March 31, 2013,
  respectively.
  (**) For Dialog Semiconductors the information is based on public data,
  operating income is the "underlying" data that excludes amortizations and
  one-time items.

Starboard Has Selected a Misleading Set of Comparable Companies and Completely
Ignores the Company's Market-Beating Stock Price Performance over the Past
Year

Starboard's claims about the performance of our stock are misleading and
ignore the stock's superior performance when compared to relevant benchmark
indexes and the Company's peer group.

  *Starboard has included comparative stock price charts on page 6 and 7 of
    its presentation, labeled as the "Five-Year Stock Price Chart," the
    "Three-Year Stock Price Chart" and the "One-Year Stock Price Chart."The
    Five-Year Stock Price Chart actually covers the period from June 2006
    through the present (nearly seven years); the Three-Year Stock Price Chart
    actually covers the period from June 2008 through March 2013 (nearly five
    years); and the One-Year Stock Price Chart actually covers the period from
    June 2010 through the present (nearly three years). These charts are
    therefore inaccurate and materially misleading for investors.
    
  *Moreover, Starboard's presentation compares the stock price performance of
    the Company to that of the Russell 2000 Index and the S&P Information
    Technology Index. While we understand we are included in the Russell 2000
    Index, its sector and composition of underlying stocks makes this an
    inappropriate comparison.Specifically, the top sectors by weight in the
    Russell 2000 are financial services, consumer discretionary and producer
    durables. Moreover, companies within the Russell 2000 on average are
    significantly larger than DSP Group, with a weighted-average market
    capitalization of $1.1 billion and a median market capitalization of $460
    million. Among the top ten holdings in the Russell 2000, there are two
    pharmaceuticals companies, an airline, a financial services holding
    company that specializes in mortgage servicing and origination and a
    chemical manufacturer.These companies are not our peers.
    
  *The comparisons below use a more relevant set of comparable
    companies.Starboard completely ignores the Company's impressive stock
    performance year-to-date and for the trailing twelve months. DSP Group has
    significantly outperformed its peer group for the same periods.

  http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTg3ODc3fENoaWxkSUQ9LTF8VHlwZT0z&t=1

Starboard Inaccurately Describes the Conduct of the DSP Group Board

Starboard makes the claim that their two nominees on the DSP Group Board,
Thomas Lacey and Kenneth Traub, have been "frozen out" of DSP Group's Board
deliberations and decisions. These assertions are false.

The truth is that Messrs. Lacey and Traub have not been "frozen-out" or
"excluded" from deliberations of the Board.Consistent with Company policy,
Messrs. Lacey and Traub were invited to every single meeting of the full Board
during their tenure as directors and they attended all of them, either
telephonically or in person.The minutes of the Board since the appointment of
Messrs. Lacey and Traub to the Board reflect both their attendance and their
active participation in meetings.Starboard has no basis whatsoever to claim
that Messrs. Lacey and Traub have been "excluded" from the Board.

The Company has a policy that all Board members may attend and participate in
the discussions of any meeting of its standing committees, including the Audit
Committee, the Compensation Committee and the Nomination and Corporate
Governance Committee.Messrs. Lacey and Traub knew of the Board's committee
meetings and, in fact, attended and participated in four of them.Either Mr.
Lacey or Mr. Traub has been in attendance at every meeting of the Audit
Committee and the Compensation Committee this year.

Moreover, a report from the Nomination and Corporate Governance Committee,
including minutes reflecting the Board's policy that any member of the Board
may attend ordinary course committee meetings, was unanimously approved by the
entire Board, including Messrs. Lacey and Traub.

Starboard's presentation also blatantly misstates that neither Mr. Traub nor
Mr. Lacey have any committee representation.In an extremely misleading slide,
Starboard writes in large red text that Messrs. Traub and Lacey have "No
Committee Representation;" this is simply not true.In a nearly illegible
footnote at the bottom of the page, Starboard acknowledges that, as of May 6,
2013, Mr. Lacey has replaced Yair Shamir on the Audit Committee of the Board,
following Mr. Shamir's resignation in connection with his appointment to a
post in the Israeli government.Starboard's presentation of this information
appears to be a calculated effort to mislead investors.

In addition, it's important to note that the Board generally adds new
directors to its committees as vacancies occur.Such was the case when Dr.
Reuven Regev joined our Board in January 2011.Mr. Regev did not initially
have a committee assignment, and was only named to the Nomination & Corporate
Governance Committee in May 2012, filling the vacancy created when Louis
Silver stepped down in connection with the settlement with Starboard.
Although neither Mr. Lacey nor Mr. Traub ever requested to be formally
appointed to the Board's standing committees, the Board acted in the ordinary
course to appoint Mr. Lacy to the Audit Committee following Mr. Shamir's
resignation.

Starboard Has Used Misdirection before in Its Communications with Shareholders

There is good reason to question Starboard's statements, intentions and
motives.In the past, Starboard has said one thing while doing another.

One such example is the activist hedge fund's involvement with
Immersion.Ramius LLC, the predecessor fund from which Starboard spun off in
2011, initially became involved with Immersion in 2009.Over the course of the
following two years, Starboard touted its long-term investment intent, all the
while reducing its stake. Here is the timeline of Starboard's words and
actions:

  *December 2009 – WORDS -Ramius delivered a letter to the CEO and Board
    which stated "RCG Starboard Advisors, LLC… currently owns approximately
    15% of the outstanding shares of Immersion Corporation…The past year has
    been challenging for Immersion and its shareholders…the Company has
    cumulatively invested almost $60 million in sales and marketing and
    research and development initiatives, yet revenue has remained stagnant.
    These substantial investments without associated revenue growth have
    resulted in a cumulative operating loss of approximately $42 million or
    $1.50 per share…the Board is lacking shareholder representatives with a
    strong vested interest in the financial performance of Immersion… As the
    largest shareholder of Immersion, we have offered to join the Board to
    fill this role to ensure the Company is run with the best interest of all
    shareholders in mind… Our interests are clearly aligned with all Immersion
    shareholders".
    
  *April 2010 – ACTIONS – Less than four months later Ramius LLC and Ramius
    Enterprise Master Fund started to sell shares of Immersion.
    
  *May 2010 – WORDS - Ramius delivered a letter to the CEO and Board which
    stated, "RCG Starboard Advisors, LLC, is the largest shareholder of
    Immersion owning approximately 14.6% of the shares outstanding. Our
    interests are directly aligned with the interests of all shareholders in
    seeking to improve the quality and effectiveness of the Board… We remain
    committed to our investment in Immersion".
    
  *June 2010 – WORDS – Ramius delivered letter to new Board member in which
    they stated "There is still substantial work to be done to realize
    Immersion's full potential in order to maximize shareholder value".
    
  *July 2010 Through December 2010 – ACTIONS – In the 6 months following the
    May and June letters, Starboard sells shares, lowering their stake to
    8.8%.
    
  *January 2011 – WORDS - Ramius delivered a letter to the CEO and Board
    which stated, "Ramius is the largest shareholder of Immersion with current
    ownership of 8.8% of the shares outstanding. We are a large, long-term
    shareholder."

  *January Through March 15^th, 2011 – ACTIONS - Within two months of
    classifying themselves as a "large, long-term shareholder", Ramius lowered
    their stake to 359,200 shares or 1.3% of Immersion down from 8.8%….and by
    Q3 2011 Ramius/Starboard exited their position completely.Immersion
    shares have recently outperformed the market by a wide margin.

  http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTg3ODc3fENoaWxkSUQ9LTF8VHlwZT0z&t=1

                               THE BOTTOM LINE

If Starboard was truly committed to ensuring that "alternative viewpoints are
allowed to be introduced and properly considered in the DSP Group's
boardroom," they would have accepted the Company's generous offer of two
additional Board seats, giving them a total of four of the ten seats, along
with significant committee representation, including two of four seats
(including chairmanship) on the Compensation Committee and two of five seats
(including chairmanship) of a proposed Strategic Committee.

Starboard dedicates very little of its presentation to actually expressing a
plan, and what they do propose lacks substance.Starboard is seeking majority
representation on the Board without a viable plan and the activist hedge
fund's candidates should be rejected.

  *They plan to "put in place clear milestones for new projects and hold
    management accountable for reaching those goals, rather than continue to
    irresponsibly invest substantial sums in R&D without appropriate
    returns."As we have conveyed, their comments around our "reckless" R&D
    spend are baseless.Despite our R&D spend falling significantly below our
    peer group, DSP Group's new product line-up is the most exciting in the
    Company's 30-year history.For each of these products there are
    identifiable, growing market opportunities and a clear path toward
    generating revenues.
    
  *They plan to "closely monitor the expenses included in management's
    budgets and look to drive DSP toward best-in-class operating performance
    while continuing to invest in new products to drive future revenue
    growth."It would appear this plan is to emulate what your current Board
    and management team have been doing already, as evidenced by: (1) our
    improving operating performance over the past six quarters despite top
    line decline; and (2) our three new best-in-class product launches in the
    first quarter of 2013, which expand our total addressable marketten-fold.
    
  *On a final note, investors have recognized the Company's successful
    turnaround and the merit of our growth plan.As a result, DSP Group's
    stock is one of the top performing stocks in our industry for the last 12
    months and year-to-date. We have made significant operational and
    financial progress over the last 12 months, as can be seen in the
    comparison to our peer group.We will continue to execute our strategic
    plan, focused on generating durable stockholder value and near term
    profitability.We are on track to meet our strategic goals and we need
    your support in the upcoming stockholder meeting to make this a reality.

Important Additional Information

The Company has filed with the U.S. Securities and Exchange Commission ("SEC")
and provided to its stockholders a definitive proxy statement and a proxy
supplement in connection with its 2013 annual meeting of
stockholders.STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT, THE PROXY
SUPPLEMENT AND OTHER RELEVANT DOCUMENTS FILED BY THE COMPANY WITH THE SEC IN
THEIR ENTIRETY BECAUSE THEY CONTAIN, OR WILL CONTAIN, IMPORTANT
INFORMATION.Stockholders may obtain free copies of these documents through
the website maintained by the SEC at http://www.sec.gov and through the
website maintained by the Company at http://ir.dspg.com.

Certain Information Regarding Participants in the Solicitation

The Company, its directors and certain of its officers may be deemed to be
participants in the solicitation of the Company's stockholders in connection
with its 2013 annual meeting.Information regarding the names, affiliations
and direct and indirect interests (by security holdings or otherwise) of these
persons can be found in the Company's definitive proxy statement and proxy
supplement for its 2013 annual meeting, which were filed with the SEC on April
22, 2013 and May 6, 2013, respectively.Stockholders may obtain a free copy of
the proxy statement, the proxy supplement and other documents filed by the
Company with the SEC from the sources listed above.

Non-GAAP Financial Information

This white paper contains references to non-GAAP financial measures.See DSP
Group's current reports on Form 8-K, filed with the SEC on January 30, 2013
and April 29, 2013, for a reconciliation of the Company's GAAP and non-GAAP
net income (loss) and diluted net income (loss) per share for the three- and
twelve-month periods ended December 31, 2011 and 2012 and for the three-month
period ended March 31, 2013 and 2012.

Forward-Looking Information

Certain statements in this white paper qualify as "forward-looking statements"
under the Private Securities Litigation Reform Act of 1995.Such 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 as a result of various
factors, including DSP Group's inability to develop and produce new products
at competitive costs and in a timely manner, unexpected delays in the
commercial launch of such products or failure of such products to achieve
broad market acceptance; slower than expected changes in the nature of
residential communications domain; DSPG Group's ability to control operating
costs; and other factors discussed under "RISK FACTORS" in DSP Group's current
report on Form 10-K for the fiscal year ended December 31, 2012, which is
available on DSP Group's Web site (www.dspg.com) under Investor Relations.

About DSP Group

DSP Group®, Inc. (Nasdaq:DSPG) is a leading global provider of wireless
chipset solutions for converged communications. Delivering semiconductor
system solutions with software reference designs, DSP Group enables OEMs/ODMs,
consumer electronics (CE) manufacturers and service providers to
cost-effectively develop new revenue-generating products with fast time to
market. At the forefront of semiconductor innovation and operational
excellence for over two decades, DSP Group provides a broad portfolio of
wireless chipsets integrating DECT/CAT-iq, DECT ULE, Wi-Fi, PSTN, HDClear™,
video and VoIP technologies. DSP Group enables converged voice, audio, video
and data connectivity across diverse mobile, consumer and enterprise products
– from mobile devices, connected multimedia screens, and home automation &
security to cordless phones, VoIP systems, and home gateways. Leveraging
industry-leading experience and expertise, DSP Group partners with CE
manufacturers and service providers to shape the future of converged
communications at home, office and on the go. For more information, visit
www.dspg.com.

CONTACT: Investor Relations
        
         Christopher Basta
         Director of Investor Relations, DSP Group
         Work: 1-408-240-6844
         Cell: 1-631-796-5644
         chris.basta@dspg.com
        
         Daniel H. Burch, CEO
         MacKenzie Partners, Inc.
         Work: 1-212-929-5748
         Cell: 1-516-429-2722
         dburch@mackenziepartners.com
        
         Paul R. Schulman, EVP
         MacKenzie Partners, Inc.
         Work: 1- 212.929.5364
         Cell: 1- 203.856.6080
         pschulman@mackenziepartners.com
        
         Media Relations
        
         Mike Sitrick and Jeff Lloyd
         Sitrick And Company
         Work: 1-310-788-2850
         Jeff_Lloyd@sitrick.com
         Mike_Sitrick@sitrick.com

DSP Group
 
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