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DSP Group Issues Letter To Shareholders Regarding Potential Proxy Contest

SAN JOSE, Calif., March 8, 2013 (GLOBE NEWSWIRE) -- DSP Group ®, Inc. (Nasdaq:DSPG), a leading global provider of wireless chipset solutions for converged communications, issued today the following letter to its shareholders:

March 8, 2013

Dear Fellow Shareholders:

We are writing to let you know about an important development that is likely to have a significant impact upon DSP Group and its future.

Over the past twelve months, your board and management have been actively taking steps to enhance shareholder value. We have restructured the company, cut expenses, resumed non-GAAP profitability, generated $10 million in cash flow from operations, continued our stock buyback program (which returned $8 million to shareholders during 2012) and focused on new growth initiatives that fully leverage the company's core strengths in voice processing and short range wireless communications.

These actions, which were unanimously supported by your board of directors, have resulted in significantly improved operating results and have positioned the company for long-term growth and success. These measures and results have also been recognized by the investment community, as DSP Group has seen its stock price increase by almost 25% over the last twelve months and more than 30% year-to-date, outperforming the Russell 2000 Index, PHLX Semiconductor Index and the S&P Information Technology Index, as well as the stocks of well-known semiconductor companies as Texas Instruments and Broadcom.

Despite this progress, Starboard Value, a New York-based investment advisor which owns approximately 10% of the company's shares, has threatened the company with a proxy fight for control of the board unless its demands are met. While DSP Group's board and management are doing everything possible to avoid a costly and distracting proxy contest, the board does not believe that Starboard's demands are in the best interests of the company or its shareholders, customers, or employees.

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