<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS IN THE QUARTERLY REPORT ON FORM 10-Q OF DSP GROUP, INC. FOR
THE QUARTER ENDED SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
                             
<PERIOD-TYPE>                   9-MOS
<FISCAL-YEAR-END>                          DEC-31-1998
<PERIOD-START>                             JAN-01-1998
<PERIOD-END>                               SEP-30-1998
<CASH>                                           6,355
<SECURITIES>                                    56,234
<RECEIVABLES>                                    9,002
<ALLOWANCES>                                       592
<INVENTORY>                                      2,226
<CURRENT-ASSETS>                                77,953
<PP&E>                                          10,811
<DEPRECIATION>                                   6,696
<TOTAL-ASSETS>                                  84,584
<CURRENT-LIABILITIES>                           13,102
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                             9
<OTHER-SE>                                      71,473
<TOTAL-LIABILITY-AND-EQUITY>                    84,584
<SALES>                                         39,950
<TOTAL-REVENUES>                                49,733
<CGS>                                           23,698
<TOTAL-COSTS>                                   24,053
<OTHER-EXPENSES>                                 7,334
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                 132
<INCOME-PRETAX>                                 14,598
<INCOME-TAX>                                     3,651
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                    10,947
<EPS-PRIMARY>                                     1.11
<EPS-DILUTED>                                     1.08