Press Release: February 18, 2000

WR Hambrecht + Co Initiates Coverage of DSP Group (DSPG) with Market Outperform and Target of $120

Digital signal processing provider projected to nearly double revenues over next 24 months

SAN FRANCISCO CA , February 18, 2000—WR Hambrecht + Co, the online investment bank, today initiated research coverage on DSP Group (DSPG) with a Market Outperform, the firm’s highest rating, and a $120 price target. In his research report, WR Hambrecht + Co’s Semiconductor analyst Jim Liang cited growth of DSP’s digital signal processing business and overall sector growth as key reasons for the rating . WR Hambrecht + Co offers all its research reports free and real-time at www.wrhambrecht.com.

"We believe increasing adoption of the Company’s DSP-based products in both digital telephones and cordless phones, combined with the high profit margins of the DSP IP business, will allow the Company to achieve strong revenue and earnings growth," Liang said. He added that potential growth in voice over Internet protocol market could also benefit the firm.

Liang projects DSP Group’s total revenues to reach $102 million in fiscal 2000 and $132.5 million in fiscal 2001, up from $76.4 million in 1999.

DSP Group is a leader in the development and marketing of high-performance, cost-effective digital signal processing (DSP) technology. The Company has two main businesses: licensing and receiving royalties from DSP intellectual property cores as a chipless company; and supplying DSP-based semiconductor products for the digital telephony and wireless communications markets as a fabless company.