Exhibit 99.1

DSP Group, Inc. Reports Second Quarter 2009 Earnings

SAN JOSE, Calif., July 23, 2009—DSP Group, Inc. (NASDAQ: DSPG), a worldwide leader in developing and providing chip-set solutions for residential wireless connectivity, announced today its results for the second quarter ended June 30, 2009.

Second Quarter Results:

Revenues for the second quarter of 2009 were $52,020,000, a decline of 30% from revenues of $74,152,000 for the second quarter of 2008. Net loss for the second quarter of 2009 was $1,677,000, as compared to net loss of $7,355,000 for the second quarter of 2008. Earnings per share (EPS) for the second quarter of 2009 were a loss of $0.07 per share, as compared to a loss of $0.26 per share for the second quarter of 2008.

Non-GAAP Results:

Non-GAAP net income and diluted EPS for the second quarter of 2009 were $718,000 and $0.03 per share, respectively, a decrease of 30% from the non-GAAP net income of $1,019,000 and a decrease of 25% from the non-GAAP diluted EPS of $0.04 per share for the second quarter of 2008. Non-GAAP net income and diluted EPS for the second quarter of 2009 excluded the impact of amortization of acquired intangible assets of $3,058,000 associated with the acquisition of NXP’s CIPT business; equity-based compensation expenses of $2,825,000; and a tax benefit of $3,488,000 resulting from a partial reversal of tax reserves. Non-GAAP net income and diluted EPS for the second quarter of 2008 excluded the impact of amortization of acquired intangible assets of $5,716,000 associated with the acquisition of NXP’s CIPT business; equity-based compensation expenses of $3,585,000; and the aggregate tax benefits associated with such expenses of $927,000.

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Eli Ayalon, Chairman and CEO of DSP Group, stated: “We exceeded our financial objectives for the second quarter of 2009, resumed non-GAAP operating profit during the second quarter, a quarter earlier than previously projected, and continued to generate positive cash flow from operations. We also secured a new design win for our XpandR platform for a system combining advanced DECT telephony with content streaming over Wi-Fi. We are cautiously optimistic and anticipate further improvements in our business for the third quarter of 2009.”

The Company believes that the non-GAAP presentation of net income and diluted EPS presented in this press release is useful to investors in comparing results for the quarter ended June 30, 2009 to the same period in 2008 because the exclusion of the above noted expenses may provide a more meaningful analysis of the Company’s core operating results. Further, the Company believes it is useful to investors to understand how the expenses associated with equity-based compensations expenses are reflected on its statements of income.

About DSP Group

DSP Group, Inc. (NASDAQ: DSPG) is a leading global provider of wireless chipset solutions for converged communications at home. Delivering system solutions that combine semiconductors and software with reference designs, DSP Group enables consumer electronics (CE) manufacturers to cost-effectively develop new revenue-generating applications with fast time to market. At the forefront of semiconductor innovation and operational excellence for over two decades, and with a dominant share of the wireless home telephony market, DSP Group provides a broad portfolio of wireless chipsets integrating DECT, Wi-Fi, PSTN and VoIP technologies with state-of-the-art application processors. Enabling converged voice, audio, video and data connectivity across diverse consumer products – from cordless and VoIP phones to home gateways and broadband multimedia screens – DSP Group proactively partners with CE manufacturers to shape the future of converged communications at home. For more information, visit www.dspg.com.

Forward Looking Statements

This press release may contain statements that qualify as “forward-looking statements” under the Private Securities Litigation Reform Act of 1995, including Mr. Ayalon’s statement of cautious optimism and anticipation of further improvements in DSP Group’s business for the third quarter of 2009. 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 as a result of various factors, including the timing and ability of the market to recover and the corresponding recovery of DSP Group’s customers; fluctuations in gross margins associated with the sale of existing products; the impact of reductions in lead times and inventory levels by DSP Group customers and their customers; the success of the implemented restructuring efforts; slower than expected change in the nature of residential communications domain; unexpected delays in the introduction of new products; especially the new generation of multimedia products; DSP Group’s inability to develop and produce new products at competitive costs and in a timely manner or failure of such products to achieve broad market acceptance; and general market demand for products that incorporate DSP Group’s technology in the market. These factors and other factors which may affect future

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operating results or DSP Group’s stock price are discussed under “RISK FACTORS” in the Form 10-K for fiscal 2008 as well as other reports 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.

Earnings conference call

DSP Group has scheduled a conference call for 8:30 a.m. EDT today to discuss the financial results for the second quarter of 2009 and invites you to listen to a live broadcast over the Internet. The broadcast can be accessed by all interested parties through the Investor Relations section (investor message board) of DSP Group’s Web site at www.dspg.com or link to: http://ir.dspg.com./phoenix.zhtml?c=101665&p=irol-calendar.

If you cannot join the call, please listen to the replay, which will be available for approximately two weeks after the call on DSP Group’s Web site or by calling the following numbers:

—US Dial-In # 1-888-286-8010 (passcode: 47169011)

—International Dial-In # 1-617-801-6888 (passcode: 47169011)

For more information, please contact Orly Garini, +1-408-240-6839, or e-mail: orly.garini@dspg.com.

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DSP GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Product revenues and other	$	52,020		$	74,152		$	91,934		$	146,881
Cost of product revenues and other		32,940			48,183			59,444			93,959
Gross profit		19,080			25,969			32,490			52,922
Operating expenses:
Research and development		13,632			18,890			27,368			38,916
Sales and marketing		4,284			5,621			8,801			11,642
General and administrative		3,926			4,547			7,740			8,798
Amortization of intangible assets		3,058			5,716			6,105			11,498
Total operating expenses		24,900			34,774			50,014			70,854
Operating loss		(5,820	)		(8,805	)		(17,524	)		(17,932	)
Other income:
Interest and other income, net		582			898			1,184			2,132
Loss before provision for income taxes		(5,238	)		(7,907	)		(16,340	)		(15,800	)
Income tax benefit		(3,561	)		(552	)		(3,972	)		(838	)
Net Loss	$	(1,677	)	$	(7,355	)	$	(12,368	)	$	(14,962	)
Net loss per share:
Basic	$	(0.07	)	$	(0.26	)	$	(0.51	)	$	(0.51	)
Diluted	$	(0.07	)	$	(0.26	)	$	(0.51	)	$	(0.51	)
Weighted average number of shares of common stock used in the computation of:
Basic		22,734			28,352			24,408			29,463
Diluted		22,734			28,352			24,408			29,463

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DSP GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (NON-GAAP)

(In thousands, except per share amounts)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2009			2008		2009			2008
	(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)
Product revenues and other	$	52,020		$	74,152	$	91,934		$	146,881
Cost of product revenues and other		32,745			47,936		59,041			93,455
Gross profit		19,275			26,216		32,893			53,426
Operating expenses:
Research and development		12,229			16,998		24,391			34,933
Sales and marketing		3,816			5,192		7,875			10,706
General and administrative		3,167			3,530		6,201			6,676
Total operating expenses		19,212			25,720		38,467			52,315
Operating income (loss)		63			496		(5,574	)		1,111
Other income:
Interest and other income, net		582			898		1,184			2,132
Income (loss) before provision for income taxes		645			1,394		(4,390	)		3,243
Provision for income taxes (income tax benefit)		(73	)		375		(484	)		784
Net income (loss)	$	718		$	1,019	$	(3,906	)	$	2,459
Net earnings (loss) per share:
Basic	$	0.03		$	0.04	$	(0.16	)	$	0.08
Diluted	$	0.03		$	0.04	$	(0.16	)	$	0.08
Weighted average number of shares of common stock used in the computation of:
Basic		22,734			28,352		24,408			29,463
Diluted		22,901			28,373		24,408			29,565

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Unaudited Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2009			2008			2009			2008
	Unaudited			Unaudited			Unaudited			Unaudited
GAAP net loss	$	(1,677	)	$	(7,355	)	$	(12,368	)	$	(14,962	)
Equity-based compensation expense included in cost of product revenues and other		195			247			403			504
Equity-based compensation expense included in R&D		1,403			1,892			2,978			3,983
Equity-based compensation expense included in SG&A		1,227			1,446			2,465			3,058
Amortization of intangible assets related to NXP transaction		3,058			5,716			6,104			11,498
Tax benefit resulting from equity-based compensation and amortization of intangible assets		—			(927	)		—			(1,622	)
Tax benefit resulting from a partial reversal of tax reserves		(3,488	)		—			(3,488	)		—
Non-GAAP net income (loss)	$	718		$	1,019		$	(3,906	)	$	2,459
Non-GAAP diluted earnings (loss) per share	$	0.03		$	0.04		$	(0.16	)	$	0.08

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DSP GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

	June 30, 2009			December 31, 2008
	(Unaudited)			(Audited)
Assets
Current assets:
Cash and cash equivalents Restricted deposits	$	46,230 115		$	68,886 115
Marketable securities and short term deposits		24,653			12,449
Trade receivables, net		31,597			39,603
Inventories		12,571			14,098
Other accounts receivable and prepaid expenses		13,394			17,367
Deferred income taxes		202			306
Total current assets		128,762			152,824
Property and equipment, net		12,133			14,822
Long term marketable securities		39,858			40,051
Severance pay fund		7,875			7,286
Deferred income taxes		20			212
Other intangible assets		26,588			32,728
Long-term prepaid expenses and lease deposits		1,688			1,331
Total assets	$	216,924		$	249,254
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	19,577		$	20,136
Other current liabilities		31,796			40,329
Total current liabilities		51,373			60,465
Accrued severance pay		9,433			8,008
Accrued pensions		1,624			1,675
Deferred tax liability		—			24
Other long term liabilities		—			455
Total long term liabilities		11,057			10,162
Stockholders’ equity:
Common stock		23			27
Additional paid-in capital		320,334			314,484
Accumulated other comprehensive income		1,325			51
Less – Cost of treasury stock		(125,142	)		(107,749	)
Accumulated deficit		(42,046	)		(28,186	)
Total stockholders’ equity		154,494			178,627
Total liabilities and stockholders’ equity	$	216,924		$	249,254

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