<ARTICLE> 5 <LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS IN THE ANNUAL REPORT ON FORM 10-K OF DSP GROUP, INC FOR THE YEAR ENDED DECEMBER 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. </LEGEND> <MULTIPLIER> 1,000 <PERIOD-TYPE> YEAR <FISCAL-YEAR-END> DEC-31-1997 <PERIOD-START> JAN-01-1997 <PERIOD-END> DEC-31-1997 <CASH> 7,325 <SECURITIES> 58,619 <RECEIVABLES> 3,887 <ALLOWANCES> 293 <INVENTORY> 4,116 <CURRENT-ASSETS> 77,945 <PP&E> 9,010 <DEPRECIATION> 5,522 <TOTAL-ASSETS> 85,168 <CURRENT-LIABILITIES> 10,998 <BONDS> 0 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 10 <OTHER-SE> 74,160 <TOTAL-LIABILITY-AND-EQUITY> 85,168 <SALES> 51,238 <TOTAL-REVENUES> 61,959 <CGS> 31,143 <TOTAL-COSTS> 32,312 <OTHER-EXPENSES> 8,420 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 226 <INCOME-PRETAX> 13,792 <INCOME-TAX> 2,758 <INCOME-CONTINUING> 11,034 <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> 11,034 <EPS-PRIMARY> 1.13 <EPS-DILUTED> 1.08