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May 21, 2003

News Release: Dspfactory achieves another year of record sales in 2003 with significant growth in hearing aid and headset markets

From: Dspfactory Ltd. (press release) - May 21, 2003

For Immediate Release

Dspfactory achieves another year of record sales in 2003 with significant
growth in hearing aid and headset markets

WATERLOO, ON, May 21, 2003 -- Dspfactory Ltd., a leading provider of open
programmable digital signal processing (DSP) technology for hearing aids,
headsets, PDAs, hands-free kits, and other portable audio devices, today
announced record results for the fiscal year ended February 28, 2003.

The company achieved significant sales growth, with annual revenue climbing
to $22.8 million, a 40% increase over 2002. Driving this growth was the
rapid market acceptance of Dspfactory's ultra-miniature DSP
system-on-a-chip (SoC) that combines advanced processing power with
ultra-low power consumption to deliver a superior listening experience to
users of battery-powered portable audio devices.

During the year, Dspfactory successfully achieved a significant milestone
of its business plan by establishing itself as a leading supplier to device
manufacturers in the rapidly-growing digital wireless headset market,
broadening the market for its core technology from its original application
in hearing aids.

"We're very pleased to have continued the momentum we created in 2002 with
another outstanding year," said Dspfactory president and CEO Robert Tong.
"We see significant growth for years to come from the digital hearing aid
and digital headset markets, where our technology has already won wide
acceptance. And we're excited by the opportunities ahead in a broad range
of digital audio applications and in enabling voice command on portable
devices, which we see as the next logical user interface for mobile and
wearable technology."

The company's top-line growth enabled Dspfactory to create 17 new jobs,
increasing the total workforce at facilities in Canada and Switzerland to

In fiscal year 2003, Dspfactory deepened its base in the hearing aid
market, winning significant production orders from Starkey Laboratories,
North America's largest hearing aid manufacturer, and establishing a
strategic supply partnership with Gennum Corporation. Dspfactory also
continued to supply its industry-leading Toccata Plus SoC to a growing
number of hearing aid manufacturers around the globe, including Phonak and
Unitron Hearing.

In headsets, Dspfactory's BelaSigna chipset was selected for the world's
smallest DSP-enabled Bluetooth headset, the Bluespoon Digital from
Denmark's and has several wireless headset design-ins going
through the market prototype stage.

"Fiscal 2003 marked the fifth year of operations for Dspfactory, and as we
look forward to continued success, we celebrate a half-decade of strong and
steady growth," said chairman Michael Stork. "The company is anchored by a
seasoned management group and has quickly attracted a global customer base
with top-tier strategic partners. Our entire team is energized by the
opportunities before us."

Other significant achievements in the last fiscal year included:

- The successful launch of the second generation of its core SignaKlara
technology platform -- which powers its new Toccata Plus and BelaSigna 200
chips. SignaKlara now delivers superior audio quality with twice the
processing power in half the space of its predecessor, without increasing
its ultra-low power consumption.

- Winning recognition from PROFIT magazine (September 2002 issue) for being
the second-hottest start-up company in Canada.

- Receiving a $4.6 million Technology Partnerships Canada (TPC) investment
to accelerate research and development of next-generation audio and speech
processing technologies.

- Moving its head office into a new facility in the Waterloo Tech Campus.

Dspfactory's technology is ideal for the delivery of sophisticated audio
signal processing to the rapidly growing number of battery-powered portable
devices, which are increasingly miniature in size. By using digital
technology and the advanced processing it enables, device manufacturers
deliver clearer sound and a greatly improved user experience.

About Dspfactory
Dspfactory Ltd., a fabless semiconductor company, is a leading-edge
developer of ultra-miniaturized, ultra-low power, software-programmable,
digital signal processing (DSP) technology. Dspfactory's mission is to
embed its unique technology ubiquitously into a wide range of market
applications. Its target markets include hearing aids, headsets, personal
digital assistants, personal digital audio players, embedded sensors,
baseband wireless devices, cellular telephones, or any other portable,
battery-powered DSP-based product where size and power consumption are as
important as flexible, advanced software processing capabilities. To
support the development and implementation of signal processing software
solutions on its technology platforms, Dspfactory also provides a complete
set of easy-to-use support tools and services, ranging from software
development and testing tools to custom DSP software development and
engineering services. For more information, visit


Media Contact:
Geoff Bellew
VP Sales and Marketing
Dspfactory Ltd.
Tel: +1 519 884 9696 Ext. 2280
Mobile: +1 519 721 7807