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As Filed with the Securities and Exchange Commission on December 9, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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DSP COMMUNICATIONS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 77-0389180
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20300 Stevens Creek Boulevard
Cupertino, California 95014
(408) 777-2700
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
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Davidi Gilo, Chairman of the Board
DSP COMMUNICATIONS, INC.
20300 Stevens Creek Boulevard
Cupertino, California 95014
(408) 777-2700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copy to:
Bruce P. Johnson, Esq.
VENTURE COUNSEL ASSOCIATES, LLP
1999 Harrison Street, Suite 1300
Oakland, California 94612
(510) 273-8750
--------------------------------
Approximate date of commencement of proposed
sale to the public: From time to time after the
Registration Statement becomes effective.
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If the only securities registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]_________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Proposed Maximum Aggregate Amount of
Title of Each Class of Securities to be Registered Offering Price(1) Registration Fee
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<S> <C> <C>
Common Stock, $.001 par value $10,000,000 $2,780
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED DECEMBER 9, 1998
DSP COMMUNICATIONS, INC.
________ SHARES OF COMMON STOCK
This is a public offering of up to ____________ shares of common stock
of DSP Communications, Inc. All of these shares are being offered by the selling
stockholders identified in this prospectus. DSP Communications will not receive
any proceeds from the sale of the shares in this offering, but has agreed to
bear certain expenses in connection with their registration. The selling
stockholders may sell the shares from time to time on the New York Stock
Exchange at their prevailing prices, or in negotiated transactions. This
offering is not being underwritten.
The shares of common stock offered by this prospectus were issued by
DSP Communications in connection with its purchase of the assets of Isotel
Research Ltd. The shares were issued pursuant to an exemption from the
registration requirements provided by Section 4(2) of the Securities Act of
1933. DSP Communications is required to register the shares pursuant to the
terms of its agreement with Isotel.
DSP Communications' common stock is traded on the New York Stock
Exchange under the symbol "DSP." On December 8, 1998, the New York Stock
Exchange reported that the closing price per share was $16.69.
DSP Communications has agreed to keep a registration statement of
which this prospectus is a part effective until the earlier to occur of
December __, 1999, or the earlier disposition of the shares offered by this
prospectus. After this date, if DSP Communications chooses not to maintain
the effectiveness of the registration statement, the shares may not be sold
or otherwise transferred or assigned, except in a transaction which is exempt
under the Securities Act of 1933 or pursuant to an effective registration
statement under the Securities Act.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE
SHARES ONLY IF YOU CAN AFFORD A COMPLETE LOSS. SEE "RISK FACTORS" BEGINNING ON
PAGE 3.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is __________, 1998.
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TABLE OF CONTENTS
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PAGE
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DSP COMMUNICATIONS..................................................3
RISK FACTORS........................................................3
USE OF PROCEEDS....................................................11
SELLING STOCKHOLDERS...............................................11
PLAN OF DISTRIBUTION...............................................11
WHERE YOU CAN FIND MORE INFORMATION................................13
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE....................13
LEGAL MATTERS......................................................14
EXPERTS ..........................................................14
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DSP COMMUNICATIONS
DSP Communications' principal executive office is located at 20300
Stevens Creek Boulevard, Suite 465, Cupertino, California 95014, and our
telephone number is (408) 777-2700. Our web site on the Internet is at
www.dspc.com. Information contained in our web site is not a part of this
prospectus.
References in this prospectus to "DSP Communications," "we," "our" and
"us" refer to DSP Communications, Inc., a Delaware corporation, and its
consolidated subsidiaries.
RISK FACTORS
THE SECURITIES WHICH ARE OFFERED BY THIS PROSPECTUS INVOLVE A HIGH
DEGREE OF RISK. YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING FACTORS AND OTHER
INFORMATION IN THIS PROSPECTUS, BEFORE DECIDING TO INVEST IN SHARES OF COMMON
STOCK.
IF ANY OF THE RISKS DESCRIBED BELOW ACTUALLY OCCUR, OUR BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS COULD BE MATERIALLY AND ADVERSELY
AFFECTED. IN THAT EVENT, THE TRADING PRICE OF OUR COMMON STOCK COULD FALL, AND
YOU COULD LOSE ALL OR PART OF YOUR INVESTMENT.
THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS
PROSPECTUS CONTAIN FORWARD LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. ACTUAL RESULTS AND EVENTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED BY US AND DESCRIBED IN THIS PROSPECTUS, AS A RESULT OF MANY FACTORS,
INCLUDING THOSE SET FORTH BELOW AND ELSEWHERE IN THIS PROSPECTUS.
WE RELY ON A LIMITED NUMBER OF CHIP SET PRODUCTS USED IN DIGITAL WIRELESS
TELEPHONES
Substantially all of our sales are from three wireless telephone chip
set products: our PDC baseband chip set for use in Japan, our TDMA chip set for
use outside of Japan, and our CDMA chip set for use in the United States, Japan,
South Korea and other parts of the world. Our success will depend on continued
and increased sales of these chip sets, and we will also need to develop and
market successive generations of these products. To succeed in the future, we
may also need to develop and market new products. We may not be successful in
developing or marketing next-generation products or any new products. We have
also depended on the rapid growth of the global digital wireless telephone
markets in which we sell our chip set products, and a slowdown in the growth of
these markets could have a material adverse effect on our business. We also rely
on our Original Equipment Manufacturer ("OEM") customers to develop and market
competitive handsets or other OEM products using our products and to compete
successfully in their markets. If our customers are not successful, then we will
not be successful. Our business and results of operations could be materially
and adversely affected if we are unable to develop and manufacture in a timely
manner new product generations and new products and to market and sell them
successfully, or if our OEMs are unsuccessful in developing and marketing their
handset products.
DIGITAL WIRELESS TELEPHONE CHIP SET MARKETS ARE HIGHLY COMPETITIVE
The digital wireless telephone chip set market is intensely
competitive. Many of our competitors have entrenched market positions,
established patents, copyrights, tradenames, trademarks and other intellectual
property rights and substantial technological capabilities. Our current
competitors in the digital cellular market include other suppliers of DSP-based
chip sets, such as existing cellular telephone
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manufacturers that develop chip set solutions internally, and smaller companies
offering design solutions. We also expect new competitors to enter the chip set
manufacturing market as the wireless communications markets expand. Our existing
and potential competitors also include large and emerging domestic and
international companies, many of which have significantly greater financial,
technical, manufacturing, marketing, sales and distribution resources and
management expertise than we do. We believe that we will rely on our ability to
compete successfully based on price, quality, availability, performance and
features of our products, timing of our new product introductions, and customer
service and technical support. Other factors outside our control will also
affect our ability to compete, such as pricing by our competitors, and the
timing and quality of their new product introductions. We may not have the
financial resources, technical expertise, intellectual property, or marketing,
sales, distribution and customer service and technical support capabilities to
compete successfully.
DECLINING SALES PRICES OF CHIP SETS
Prices of wireless personal communications equipment have declined, and
we expect this decline to continue. As a result, prices for our chip set
products have declined and will likely continue to decline. In addition, pricing
competition among handset manufacturers and component suppliers has increased.
If we are unable to offset these price decreases with either increases in unit
volume, changes in our terms of trade, or reductions in per unit costs, our
gross profit would be adversely affected. Since cellular telephone manufacturers
often negotiate supply arrangements well in advance of delivery dates, we must
often commit to price reductions for our products before we are aware of how, or
if, adequate cost reductions can be obtained. If we are unable to lower costs in
response to these price reduction commitments, our business, financial condition
and results of operations could be materially and adversely affected. In
addition, our inability to respond to increased price competition would have a
material adverse effect on our business, financial condition and results of
operations.
RELIANCE ON TWO DISTRIBUTORS AND ON A SMALL NUMBER OF OEMS IN A COMPETITIVE OEM
MARKET
Substantially all of our sales of baseband chip sets for digital
cellular telephones are to Tomen Electronics Corp., our distributor in Japan,
and to Tomen Electronics America Inc., our distributor in the United States.
These distributors sell our products to a small number of OEM customers. During
the first nine months of 1998, seven OEM customers accounted for substantially
all of the sales of our PDC baseband chip sets, while two OEM customers
accounted for all sales of our TDMA chip sets, and two OEM customers accounted
for all sales of our CDMA chip sets. The loss of either of our distributors or
the loss of or significant reduction in the distributors' sales to any of these
OEMs could have a material adverse effect on our business, financial condition
and results of operations.
Because the worldwide cellular telephone equipment industry is
dominated by a small number of large corporations, we expect that we will
continue to sell most of our products to a limited number of OEMs. We also
believe that the manufacture of subscriber equipment for new telecommunications
services, such as personal communications services, will be concentrated in a
limited number of OEMs. As a result, our business is likely to continue to
depend on large orders from a small number of distributors and OEMs, and our
success will depend largely on gaining additional OEM customers both in our
current markets and in new markets. We could suffer a material adverse effect on
our business, financial condition and results of operations if we lose any
existing OEM customer, if any existing customer significantly reduces its
purchases of our products, or if we fail to gain additional OEM customers.
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Sales of our PDC, TDMA and CDMA chip sets will depend on the success of
our OEM customers in developing and introducing competitive handsets using these
chip sets, and in successfully competing in these intensely competitive wireless
personal communications markets. In addition, our subsidiary, CTP Systems, will
depend on the success of its OEM customers in the wireless Private Branch
Exchange market for sales of CTP Systems' wireless PBX systems. We will not be
successful if our OEM customers are not successful.
RISKS RELATED TO NEW MARKETS FOR OUR TDMA, CDMA AND WIRELESS PBX PRODUCTS
Our success in marketing our TDMA-based and CDMA-based chip sets will
depend on, among other things, the success of the relatively new TDMA and CDMA
standards and growth of these markets worldwide. These standards may not be
widely adopted, and our TDMA or CDMA chip sets or successive generations of
these products may not be successful in the marketplace. In addition, increased
sales of CTP Systems' wireless PBX systems will depend on, among other things,
growth in the market for PBX systems and other low-mobility wireless
communications applications. This market has to date not grown as fast as
previously anticipated, and may not become large enough to support significant
sales of CTP Systems' products.
DEPENDENCE ON JAPANESE AND GLOBAL MARKETS AND ECONOMIES
Since we sell a large percentage of our products in Japan, the current
difficulties in the Japanese economy may materially affect our revenues. If the
Japanese economy remains weak or declines further, our business, financial
condition and results of operations could be materially and adversely affected.
Our future performance will depend, in large part, upon our ability to continue
to compete successfully in the Japanese market. A number of factors could
adversely impact our ability to do so, including any deterioration of existing
trade relations between Japan, Israel and the United States, the imposition of
tariffs in the wireless personal communications industry, or any adverse changes
in Japanese political conditions, trade policy or telecommunications
regulations. To remain competitive in Japan, we must also continue to develop
products that meet the technical requirements of our Japanese customers and
maintain satisfactory relationships with our Japanese customers and distributor.
Our inability to compete in Japan for any reason could have a material adverse
effect on our business, financial condition and results of operations.
An increasing amount of our sales are made to OEMs for sale outside of
Japan. The economies of other global regions in which we or our OEM customers do
business, such as North and South America and South Korea, may also be
negatively affected by the current economic difficulties in Japan and Asia and
other causes. Deterioration of economic conditions in these regions could have a
material negative impact on our business, financial condition and results of
operations.
FLUCTUATION OF EXCHANGE RATES BETWEEN US DOLLAR AND JAPANESE YEN
While virtually all of our sales to our Japanese customers are
denominated in United States dollars, a material portion of the sales prices for
certain products we sell to these customers are quoted in dollars linked to
Japanese yen-based prices. Fluctuations in the exchange rate for the United
States dollar in relation to the yen could materially affect the price of our
products in Japan and could have a material adverse effect on our sales and
results of operations. In addition, an increasing number of the components used
in our products are quoted in or linked to yen based prices, and an increase in
the value of yen relative to the United States dollar could materially increase
the cost of these materials. This increase could have a material adverse effect
on our results of operations and financial condition.
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EXPECTED FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
Our quarterly operating results may fluctuate significantly as a result
of a number of factors, including the following:
- - the volume and timing of product orders received and delivered during
the quarter;
- - the timing of our new product introductions and of new product
introductions by our OEM customers;
- - the introduction of new products by our competitors and our OEMs'
competitors;
- - market acceptance of new products;
- - changes in general economic conditions, particularly in Japan, South
Korea, other countries in the Far East and North and South America;
- - adoption of new technologies and standards;
- - relative prices of our products;
- - the cost and availability of components;
- - the mix of products sold;
- - the quality and availability of chip sets manufactured for us by third
parties;
- - acquisitions of other businesses;
- - changes in our distribution arrangements;
- - sales of wireless subscriber equipment by our OEMs; and
- - fluctuations in the exchange rates of the currencies in which we do
business.
It is possible that in some future quarter, our operating results may
be below public market analyst and investor expectations. If that occurs, the
price of our stock may fall.
SHORT VISIBILITY FOR FUTURE PRODUCT ORDERS
The market for our chip sets is characterized by short-term order and
shipment schedules. Accordingly, since our revenue expectations and planned
operating expenses are in large part based on estimates rather than on firm
customer orders, our quarterly operating results could be materially adversely
affected if orders and revenues do not meet expectations.
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WE RELY ON THIRD PARTIES TO MANUFACTURE OUR INTEGRATED CIRCUIT PRODUCTS
All of our integrated circuit products and certain of the components
included in CTP Systems' products are currently made by independent third
parties, and we intend to continue using independent foundries in the future.
Accordingly, we are and will remain dependent on independent foundries to
achieve acceptable manufacturing yields, to allocate to us a sufficient amount
of foundry capacity to meet our needs and to offer us competitive pricing.
Although we have not had any material quality, allocation or pricing problems to
date, if we do have any problems in the future, they would have a material
adverse effect on our business, financial condition and results of operations.
VOLATILITY OF STOCK PRICE
The price of our common stock has fluctuated in the past and will
likely fluctuate in the future. Certain of the factors which may cause the price
of our common stock to fluctuate include:
- - announcements of developments related to our business;
- - announcements by customers or competitors;
- - quarterly fluctuations in our financial results;
- - announcements regarding acquisitions of other businesses;
- - general conditions in the wireless personal communications industry in
which we compete or the national and regional economies in which we do
business; and
- - fluctuations in levels of consumer spending for cellular telephones in
Japan, South Korea and North and South America.
In addition, in recent years the stock market in general, and the
market for shares of technology stocks in particular, have experienced extreme
price fluctuations, which have often been unrelated to the operating performance
of affected companies. Such fluctuations could have a material adverse effect on
the market price of our common stock. In the past, we have been the object of
securities class action litigation in connection with the volatility of the
market price of our common stock. If we were the object of additional securities
class action litigation in the future, it could result in substantial costs and
a diversion of management's attention and resources.
RISK OF INCREASED INCOME TAXES IN ISRAEL AND THE UNITED STATES
DSPC Israel Ltd. and CTP Systems, two of our Israeli subsidiaries,
operate as "Approved Enterprises" under Israel's Law for the Encouragement of
Capital Investments, 1959. An Approved Enterprise is eligible for significant
income tax rate reductions for several years following the first year in which
it has income subject to taxation in Israel (after consideration of tax losses
carried forward). This favorable tax treatment may not continue, and any change
in this tax treatment could have a material adverse effect on our net income and
results of operations. We are not currently aware of any circumstances that
might cause us to lose our favorable tax treatment. If Israel's tax incentives
or rates applicable to DSPC Israel or CTP Systems are rescinded or changed,
their income taxes could increase and their results of operations and cash flow
would be adversely affected. In addition, our income tax rate would increase if
any of the earnings of our Israeli subsidiaries were to become subject to United
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States federal and state income tax as a result of actual or deemed dividends or
through operation of United States tax rules applicable to "controlled foreign
corporations."
The effective income tax rate of DSPC Israel and CTP Systems is
sensitive to the relationship between the rate of inflation in Israel and to the
change in the rate of exchange between the US dollar and the New Israeli shekel.
As a result, fluctuations in this rate of exchange in relation to the rate of
inflation in Israel could increase our effective income tax rate and as a result
have a material adverse effect on our net income and results of operations.
FUTURE ACQUISITIONS
Our strategy includes obtaining additional technologies and may involve
acquisitions of products, technologies or businesses from third parties.
Identifying and negotiating these acquisitions may divert substantial management
resources. An acquisition could use substantial cash, could require us to incur
or assume debt obligations, or could involve the issuance of additional common
or preferred stock. The issuance of additional stock would dilute existing
stockholders and could represent an interest senior to the rights of our then
outstanding common stock. An acquisition that is accounted for as a purchase
could involve significant one-time, non-cash write-offs, or could involve the
amortization of goodwill and other intangibles over a number of years, which
would adversely affect earnings in those years. Public market analysts may view
acquisitions outside the digital communications area as a diversion of our focus
on digital communications. For these and other reasons, the market for our stock
may react negatively to the announcement of any acquisition. An acquisition will
continue to require attention from our management to integrate the acquired
entity into our operations and may require us to develop expertise in fields
outside our current area of focus. Management of the acquired entity may leave
after the purchase. An acquired entity may have unknown liabilities, and its
business may not achieve the results anticipated at the time of the acquisition.
RISKS OF INTERNATIONAL OPERATIONS, PARTICULARLY IN ISRAEL
We market and sell our products internationally and have offices and
operations in Israel and Japan in addition to our offices in the United States.
We are therefore subject to the many risks of doing business internationally and
in maintaining international operations, including:
- - unexpected changes in regulatory requirements;
- - fluctuations in the exchange rate for the United States dollar;
- - the impact of recessions in economies outside the United States;
- - the imposition of tariffs and other barriers and restrictions;
- - the burdens of complying with a variety of foreign laws;
- - global political and economic instability; and
- - changes in diplomatic and trade relationships.
Our principal research and development facilities are located in
Israel, and as of September 30, 1998, 176 of our 190 employees were located in
Israel, including a substantial portion of our senior
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management and all of our research and development personnel. We are therefore
directly affected by the political, economic and military conditions to which
that country is subject. In addition, many of our expenses in Israel are paid in
Israeli currency, and we are subject to foreign currency fluctuations and to
economic pressures resulting from Israel's generally high rate of inflation. The
rate of inflation in Israel for 1996, 1997 and the first nine months of 1998 was
10.6%, 7.0% and 4.0%, respectively. While our functional currency is the United
States dollar, a portion of our expenses are denominated in Israeli shekels. The
primary expense paid in Israeli currency is Israeli-based employee salaries. In
addition, we also have certain Israeli shekel-based liabilities and assets. As a
result, fluctuations in the value of Israeli currency in comparison to the
United States dollar and inflationary pressures on the Israeli shekel could
increase the cost of technology development, research and development expenses,
general and administrative expenses and our effective income tax rate. Currency
fluctuations, changes in the rate of inflation in Israel or any of the other
factors noted above may have a material adverse effect on our business,
financial condition and results of operations.
MANAGEMENT OF OUR GROWTH
The growth and development in our business has placed, and is expected
to continue to place, a significant strain on our management and operations. To
manage our growth and development, we must continue to implement and improve our
operational, financial and management information systems and expand, train and
manage our employees. The anticipated increase in product development, general
and administrative, and marketing and sales expenses coupled with our reliance
on OEMs to successfully market and develop products that use our products could
have an adverse effect on our performance. Our failure to manage growth
effectively and efficiently could have a material adverse effect on our
business, financial condition and results of operations.
IMPACT OF YEAR 2000
Many currently installed computer systems and software products
experience problems handling dates beyond the year 1999 and will need to be
modified before the year 2000 in order to remain functional. As a result, before
the year 2000, computer systems and/or software products and applications used
by many companies may need to be upgraded to comply with such year 2000
requirements.
We are currently expending resources to review our internal systems,
products and the readiness of third parties with whom we have business
relationships, and we have assigned a dedicated task force to develop and
implement a Year 2000 plan (the "Plan") which is designed to cover all of our
activities. The Plan, which has executive sponsorship, is reviewed regularly by
senior management and includes the evaluation of both information technology
("IT") and non-IT systems. The Plan consists of five steps.
Step one involves increasing awareness by educating and involving all
appropriate levels of management regarding the need to address Year 2000 issues.
Step two consists of identifying all of our systems, products and relationships
that may be impacted by Year 2000. Step three involves determining our current
state of Year 2000 readiness for those areas identified in step two and
prioritizing areas that need to be fixed. Step four will consist of developing a
plan for those areas identified as needing correction. Step five will be the
implementation and execution of our Plan and completing the steps identified to
attain Year 2000 readiness. We have completed step one and are currently
completing step two. Based on our assessment to date, we have determined that it
is unlikely that we have any exposure to contingencies related to the Year 2000
issue for the products that we have sold, that all of our products that are
currently being sold are Year 2000 compliant, and that we expect to complete
implementation of
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the Plan, including completing any necessary modifications or replacements of
our internal IT and non- IT systems, by the middle of 1999.
Our costs of implementing the Plan to date have not been material, and
we do not believe that the costs of completing the Plan will be material. We are
currently evaluating modification or replacement of certain of our internal IT
systems in connection with our growth, and the majority of the costs associated
with the Plan for the Year 2000 are expected to represent resources used in this
related expansion effort. We believe that modifications deemed necessary will be
made on a timely basis and do not believe that the cost of such modifications
will have a material effect on our operating results. In addition, we are in the
process of evaluating the need for contingency plans with respect to year 2000
requirements. The necessity of any contingency plan must be evaluated on a
case-by-case basis and may vary considerably in nature depending on the year
2000 issue it may address.
Despite the measures we have already taken and intend to take to remedy
the Year 2000 problem, unexpected delays or problems, including the failure to
ensure Year 2000 compliance of systems or products supplied to us by third
parties, could occur and could have a material adverse effect on our financial
performance and results of operations. In addition, we cannot predict the effect
of the Year 2000 issues on our customers or the resulting effect on us. As a
result, if our customers do not take preventative and/or corrective actions in a
timely manner, the Year 2000 issue could have an adverse effect on their
operations and accordingly have a material adverse effect on our business,
financial condition and results of operations. Furthermore, our current
understanding of expected costs may change as the project progresses and does
not include the cost of internal software and hardware replaced in the normal
course of business whose installation otherwise may be accelerated to provide
solutions to Year 2000 compliance issues.
ANTI-TAKEOVER PROVISIONS IN CERTIFICATE OF INCORPORATION
Provisions in our Certificate of Incorporation and Delaware law
authorize us to issue up to 5,000,000 shares of preferred stock without
stockholder approval. Such issuance could make it more difficult for a third
party to acquire us, even if doing so would be beneficial to our stockholders.
NO INTENT TO PAY DIVIDENDS ON OUR CAPITAL STOCK
We have never paid dividends on our capital stock. We currently intend
to retain any future earnings for funding growth and do not expect to pay any
dividends in the foreseeable future.
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USE OF PROCEEDS
All proceeds from any sale of shares of common stock offered by the
selling stockholders will be received by the selling stockholders, not by DSP
Communications.
SELLING STOCKHOLDERS
The following table sets forth the beneficial ownership of DSP
Communications' common stock by the selling stockholders as of the date of this
prospectus. None of the selling stockholders has had a material relationship
with DSP Communications within the past three years other than the ownership of
the shares of common stock being offered by this prospectus. No estimate can be
given as to the amount of shares of common stock that will be held by the
selling stockholders after completion of this offering because the selling
stockholders may offer all or some of their shares, and because there currently
are no agreements, arrangements or understandings with respect to the sale of
any of the shares. The shares offered by this prospectus may be offered from
time to time by the selling stockholders named below:
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PERCENT OF NUMBER OF SHARES
NUMBER OF SHARES OUTSTANDING REGISTERED FOR
NAME OF SELLING STOCKHOLDER BENEFICIALLY OWNED SHARES SALE (1)
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Janette Sharman
Duane Sharman
Jose Guterman
Steve Pye
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(1) This prospectus also shall cover any additional shares of common
stock which become issuable in connection with the shares registered for sale
hereby by reason of any stock dividend, stock split, recapitalization or other
similar transaction effected without the receipt of consideration which results
in an increase in the number of DSP Communications' outstanding shares of common
stock.
PLAN OF DISTRIBUTION
We are registering all __________ of the shares of common stock
offered by this prospectus (the "Shares") on behalf of the selling
stockholders, and will receive no proceeds from this offering. The selling
stockholders, or pledgees, donees, transferees or other
successors-in-interest selling Shares received from a selling stockholder as
a gift or other non-sale related transfer after the date of this prospectus
are free to sell the Shares from time to time. The selling stockholders will
act independently of DSP Communications in making decisions with respect to
the timing, manner and size of each sale. The sales may be made on the New
York Stock Exchange or otherwise, at prices and at terms then prevailing or
at prices related to the then current market price, or in negotiated
transactions. The selling stockholders may effect such transactions by
selling the Shares to or through broker-dealers. The Shares may be sold by
one or more of, or a combination of, the following:
- - block trade in which the broker-dealer so engaged will attempt to sell
the Shares as agent, but may position and resell a portion of the block
as principal to facilitate the transaction;
- - purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this prospectus;
11
<PAGE>
- - an exchange distribution in accordance with the rules of such exchange;
- - ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
- - in privately negotiated transactions.
In effecting sales, broker-dealers engaged by the selling stockholders
may arrange for other broker-dealers to participate in the resales.
The selling stockholders may enter into hedging transactions with
broker-dealers in connection with distributions of the Shares or otherwise. In
such transactions, broker-dealers may engage in short sales of the Shares in the
course of hedging the positions they assume with selling stockholders. The
selling stockholders also may sell Shares short and redeliver the Shares to
close out such short positions. The selling stockholders may enter into option
or other transactions with broker-dealers which require the delivery to the
broker-dealer of the Shares. The broker-dealer may then resell or otherwise
transfer such Shares pursuant to this prospectus. The selling stockholders also
may loan or pledge the Shares to a broker-dealer. The broker-dealer may sell the
Shares so loaned, or upon a default the broker-dealer may sell the pledged
shares pursuant to this prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from the selling stockholders.
Broker-dealers or agents may also receive compensation from the purchasers of
the Shares for whom they act as agents or to whom they sell as principals, or
both. Compensation as to a particular broker-dealer might be in excess of
customary commissions and will be in amounts to be negotiated in connection with
the sale. Brokers-dealers or agents and any other participating broker-dealers
or the selling stockholders may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act of 1933, as amended (the
"Securities Act"), in connection with sales of the Shares. Accordingly, any such
commission, discount or concession received by them and any profit on the resale
of the Shares purchased by them may be deemed to be underwriting discounts or
commissions under the Securities Act. Because the selling stockholders may be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act, the selling stockholders will be subject to the prospectus
delivery requirements of the Securities Act. In addition, any securities covered
by this prospectus which qualify for sale pursuant to Rule 144 promulgated under
the Securities Act may be sold under Rule 144 rather than pursuant to this
prospectus. The selling stockholders have advised us that they have not entered
into any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of the Shares; nor is any underwriter or
coordinating broker acting in connection with the proposed sale of the Shares by
the selling stockholders.
The Shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states the Shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirements is available and is complied with.
Under applicable rules and regulations under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), any person engaged in the
distribution of the Shares may not simultaneously engage in market-making
activities with respect to our common stock for a period of two business days
prior to the commencement of such distribution. In addition, each selling
stockholder will be subject to applicable provisions of the Exchange Act and the
associated rules and regulations under the Exchange Act, including Regulation M,
which provisions may limit the timing of purchases and sales of shares of DSP
Communications common stock by the selling stockholders. DSP Communications will
make
12
<PAGE>
copies of this prospectus available to the selling stockholders and has informed
them of the need for delivery of copies of this prospectus to purchasers at or
prior to the time of any sale of the Shares.
We will bear all costs, expenses and fees in connection with the
registration of the Shares. The selling stockholders will bear all commissions
and discounts, if any, attributable to the sales of the Shares. The selling
stockholders may agree to indemnify any broker-dealer or agent that participates
in transactions involving sales of the Shares against certain liabilities,
including liabilities arising under the Securities Act.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement on Form S-3 we have
filed with the Securities and Exchange Commission ("SEC") under the Securities
Act with respect to the common stock offered by this prospectus. This prospectus
does not contain all of the information set forth in the registration statement,
certain parts of which are omitted in accordance with the rules and regulations
of the SEC. For further information regarding DSP Communications and the common
stock offered by this prospectus, you may refer to the registration statement,
including its exhibits and schedules. The registration statement may be
inspected at the public reference facilities maintained by the SEC at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part of
the registration statement may be obtained from the SEC upon payment of the
prescribed fees.
We also file annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy any document we file
at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the SEC's regional offices located at 75 Park Place, New York, New
York 10007, and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. You may also obtain copies of such material by mail from the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. You may also examine our SEC filings through the
SEC's web site at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934 until the selling stockholders have sold all the shares
offered by this prospectus.
1. DSP Communications' Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, filed with the SEC on March 19, 1998,
including certain information in DSP Communications' definitive Proxy
Statement in connection with its 1998 Annual Meeting of Stockholders,
filed with the SEC on March 27, 1998.
2. DSP Communications' Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998, filed with the SEC on May 14, 1998.
3. DSP Communications' Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998, filed with the SEC on August 13, 1998.
13
<PAGE>
4. DSP Communications' Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, filed with the SEC on November 12, 1998.
5. The description of DSP Communications' common stock contained in the
Registration Statement on Form 8-A filed with the SEC on March 1, 1995,
together with all amendments or reports filed for the purpose of
updating such description.
You may request a copy of these filings, at no cost, by writing or telephoning
us at the following address:
Arnon Kohavi, Vice President of Business Development
DSP Communications, Inc.
20300 Stevens Creek Boulevard, Suite 465
Cupertino, California 95014
Telephone: 408-777-2700
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. We are not making an offer of
the shares of common stock in any jurisdiction where the offer is not permitted.
You should not assume that the information in his prospectus or any supplement
is accurate as of any date other than the date on the front of those documents.
LEGAL MATTERS
The validity of the common stock offered by this prospectus will be
passed upon for DSP Communications by Venture Counsel Associates, LLP, Oakland,
California. Certain members of Venture Counsel Associates, LLP, own a total of
3,850 shares of DSP Communications' common stock.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements (and schedule) included in our Annual Report on Form 10-K
for the year ended December 31, 1997, as set forth in their report, which is
incorporated in this registration statement by reference. Our consolidated
financial statements are incorporated by reference in reliance on their report,
given on their authority as experts in accounting and auditing.
14
<PAGE>
- --------------------------------------------------------------------------------
Prospective investors may rely only on the information contained in this
prospectus. Neither DSP Communications nor the selling stockholders have
authorized anyone to provide prospective investors with information different
from that contained in this prospectus. This prospectus is not an offer to sell
nor is it seeking an offer to buy these securities in any jurisdiction where the
offer or sale is not permitted. The information contained in this prospectus is
correct only as of the date of this prospectus, regardless of the time of the
delivery of this prospectus or any sale of these securities.
- ------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
______________ Shares
of
Common Stock
offered by
Selling Stockholders
DSP COMMUNICATIONS, INC.
PROSPECTUS
____________, 1998
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses payable in connection with the distribution of the securities
being registered (estimated except for the registration fee), all of which will
be borne by the Registrant, are as follows:
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee................................ $ 2,780
Legal Fees and Expenses............................. 20,000
Accounting Fees and Expenses........................ 10,000
Miscellaneous Expenses.............................. 2,000
-------
Total.................................... $34,780
-------
-------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145(a) of the Delaware General Corporation Law (the "DGCL")
provides in relevant part that "a corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation), by
reason of the fact that he is or was a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful." With respect to
derivative actions, Section 145(b) of the DGCL provides in relevant part that
"[a] corporation may indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor. . . . [by
reason of his service in one of the capacities specified in the preceding
sentence] against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interest of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper."
The Registrant's Certificate of Incorporation provides that each person
who is or was or who had agreed to become a director or officer of the
Registrant or who had agreed at the request of the Registrant's Board of
Directors or an officer of the Registrant to serve as an employee or agent of
the Registrant or as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall be
indemnified by the Registrant to the fullest extent permitted by the DGCL, or
any other applicable laws. Such Certificate of Incorporation also provides that
the Registrant may enter into one or more agreements with any person which
provides for indemnification greater or different than that provided in such
Certificate, and that no amendment or repeal of such Certificate shall
II-1
<PAGE>
apply to or have any effect on the right to indemnification permitted or
authorized thereunder for or with respect to claims asserted before or after
such amendment or repeal arising from acts or omissions occurring in whole or in
part before the effective date of such amendment or repeal.
The Registrant's Bylaws provide that the Registrant shall indemnify to
the fullest extent authorized by law any person made or threatened to be made a
party to an action or a proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he, his testator or intestate was or
is a director, officer or employee of the Registrant or any predecessor of the
Registrant or serves or served any other enterprise as a director, officer or
employee at the request of the Registrant or any predecessor of the Registrant.
The Registrant has entered into indemnification agreements with its
directors and certain of its officers.
The Registrant has purchased and maintains insurance on behalf of any
person who is or was a director or officer against any loss arising from any
claim asserted against him and incurred by him in any such capacity, subject to
certain exclusions.
See also the undertakings of the Registrant contained in Item 17
herein.
ITEM 16. EXHIBITS.
The exhibits are listed in the Exhibit Index commencing at page II-6 hereof.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in this Registration Statement; and
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the
II-2
<PAGE>
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective amendment to
this Registration Statement any of the securities being registered
which remain unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
issuer's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item 15, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cupertino, State of California, on December 9, 1998.
DSP COMMUNICATIONS, INC.
By: /s/ Davidi Gilo
--------------------------------
Davidi Gilo
Chairman of the Board
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints, severally and not jointly, Davidi Gilo,
Joseph Perl, and David Aber with full power to act alone, his true and lawful
attorneys-in-fact, with the power of substitution for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to sign any
registration statement for the same offering covered by this Registration
Statement that is to be effective upon filing pursuant to Rule 462(b)
promulgated under the Securities Act of 1933, and all post-effective amendments
thereto, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact full power and authority to do and perform each and every
act and thing requisite and necessary to be done as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Davidi Gilo Chairman of the Board December 9, 1998
- --------------------------
Davidi Gilo
/s/ Joseph Perl President, Chief Executive
- --------------------------- Officer and Director December 9, 1998
Joseph Perl
/s/ David Aber Chief Financial Officer
- --------------------------- (Principal Financial and
David Aber Accounting Officer) December 9, 1998
II-4
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Lewis Broad Director December 9, 1998
- ----------------------------
Lewis Broad
/s/ Neill Brownstein Director December 9, 1998
- ----------------------------
Neill Brownstein
/s/ Gerald Dogon Director December 9, 1998
- ----------------------------
Gerald Dogon
/s/ Avraham Fischer Director December 9, 1998
- ----------------------------
Avraham Fischer
/s/ Shigeru Iwamoto Director December 9, 1998
- ----------------------------
Shigeru Iwamoto
/s/ Andrew Schonzeit Director December 9, 1998
- ----------------------------
Andrew Schonzeit
II-5
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
--------- -----------
5.1 Opinion of Venture Counsel Associates, LLP.
23.1 Consent of Venture Counsel Associates, LLP, included
in Exhibit 5.1.
23.2 Consent of Ernst & Young LLP, Independent Auditors.
24.1 Power of Attorney (See Page II-4 of this Registration
Statement)
II-6
<PAGE>
EXHIBIT 5.1
VENTURE COUNSEL ASSOCIATES, LLP
Attorneys at Law
Lake Merritt Plaza Building
1999 Harrison Street, Suite 1300
Oakland, California 94612
December 9, 1998
DSP Communications, Inc.
20300 Stevens Creek Blvd., Suite 465
Cupertino, CA 95014
RE: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have acted as counsel to DSP Communications, Inc., a Delaware
corporation (the "Company"), in connection with the registration for resale of
shares of Common Stock of the Company (the "Shares"), as described in the
Company's Registration Statement on Form S-3 (the "Registration Statement")
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Act"). The number of Shares subject to the Registration
Statement shall be equal to the quotient obtained by dividing $10 million by the
closing share price of the Company's Common Stock on the New York Stock Exchange
on the date of the closing of the transactions contemplated in the asset
purchase agreement dated as of December 8, 1998, pursuant to which the Company
shall issue and sell the Shares.
We have reviewed the Company's charter documents, the corporate
proceedings taken by the Company in connection with the original issuance and
sale of the Shares, and such other documents, records and certificates of
officers of the Company as we have deemed necessary and relevant for the
purposes hereof. Based on such review, we are of the opinion that the Shares,
when issued and sold upon receipt of consideration pursuant to the terms of the
asset purchase agreement referenced above, will be duly authorized, validly
issued, fully paid and nonassessable.
We consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the prospectus which is part of the Registration Statement.
In giving this consent, we do not thereby admit that we are within the category
of persons whose consent is required under Section 7 of the Act, the rules and
regulations of the Securities and Exchange Commission promulgated thereunder, or
Item 509 of Regulation S-K.
<PAGE>
DSP Communications, Inc.
December 9, 1998
Page 2
The foregoing opinion is based on and limited to the General
Corporation Law of the State of Delaware and the relevant federal laws of the
United States, and we express no opinion with respect to the laws of any other
jurisdiction.
This opinion letter is rendered as of the date first written above and
we disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion expressly is
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company or the
Shares.
Very truly yours,
/s/ Venture Counsel Associates, LLP
VENTURE COUNSEL ASSOCIATES, LLP
<PAGE>
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related prospectus of DSP
Communications, Inc. for the registration of its common stock to be filed
with the Securities and Exchange Commission on, or about, December 7, 1998,
and to the incorporation by reference therein of our reports dated January
13, 1998 (except for Note 13, as to which the date is February 9, 1998), with
respect to the consolidated financial statements and schedule of DSP
Communications, Inc. included in its Annual Report (Form 10-K) for the year
ended December 31, 1997, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Palo Alto, California
December 4, 1998
