BILLERICA, Massachusetts, January 25, 2007 - CSP Inc. (NASDAQ: CSPI) MultiComputer Division, a leading supplier of rugged embedded clusters, today announced the completion of an agreement authorizing Annapolis Micro Systems, a leader in the field of FPGA technologies, to resell CSPI's FastCluster hybrid computing platforms to commercial and government customers for FPGA based applications.

"Under this agreement Annapolis Micro Systems is able to offer their customers a single point of contact for scalable hybrid computing solutions that leverage CSPI's expertise in rugged embedded computing and Annapolis' innovation in FPGA design and development tools," stated William E. Bent, Jr., General Manager and Vice President of CSPI's MultiComputer Division. FastCluster hybrid computing blades integrate the Freescale 8641D Multicore processor, Xilinx Virtex-5 FPGA and Myricom's 10-Gigabit Ethernet Myri-10G clustering technology. These high performance embedded clusters offer unrivaled scalability in a rugged platform designed to minimize size, weight and power consumption.

The FastCluster hybrid computing software development environment includes a broad set of libraries, diagnostics and development tools that promote collaboration, productivity and portability. Specifically, FastCluster supports the Annapolis CoreFire Development Suite for Xilinx FPGA, WindRiver's Workbench open device software development suite for VxWorks and Linux on PPC AltiVec, VSIPL object oriented middleware, and Myricom's 10-Gigabit Ethernet stack and MPICH-MX over Myri-10G clustering fabric.

"We are excited to expand our current FPGA offering with a comprehensive hybrid computing solution for our customers," says Jane Donaldson, Annapolis founder and CEO. Customers will benefit from the performance and the productivity improvements delivered by the FastCluster rugged computing platform that is capable of supporting 100's of hybrid compute blades. FastCluster systems are used for the most demanding DSP applications like encryption/decryption, sonar, radar and SIGINT.

About Annapolis Micro Systems, Inc.

Annapolis Micro Systems, Inc., known as The FPGA Performance Company, is a leader in COTS High Performance Processing. Annapolis provides the application developer with everything needed to fully use the power of FPGA processing to solve real time problems, with full bandwidth input and output. Annapolis excels in providing easy to use and cost effective full system solutions to very demanding real-time data capture, processing and storage problems. The customer can develop his/her application using our CoreFire™ Development Suite, with its extensive IP & Board Support Libraries, or with VHDL. Some typical application areas are DSP, Radar, SIGINT, SW Radio, Image Processing, Encryption, and Data Mining.

For more information about Annapolis Micro Systems, Inc. visit http://www.annapmicro.com or contact Jane Donaldson at (410) 841-2514, jdonald@annapmicro.com. .

About CSP Inc.

Based in Billerica, Massachusetts and founded in 1968, CSP Inc. (NASDAQ: CSPI) and its subsidiaries develop and market best-of-breed IT solutions, systems integration services, and high-performance computer systems. CSP's Systems segment includes the MultiComputer Division, which supplies high-performance Linux cluster systems for a broad array of defense applications, including radar, sonar and surveillance signal processing. The Company's MODCOMP, Inc. subsidiary, part of its Service and Systems Integration segment founded in 1970 and which includes the fiscal 2003 acquisition of Technisource, is a leading provider of IT solutions and systems integration services. MODCOMP works with third parties to develop customized solutions in the global IT markets and has offices in the U.S., U.K. and Germany.

For more information about CSP Inc., visit http://www.cspi.com or call us at 1 (800) 325-3110.

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CSP Inc. wishes to take advantage of the 'safe harbor' provisions of the Private Securities Litigation Reform Act of 1995 with respect to statements that may be deemed to be forward-looking statements under the Act. Such forward-looking statements may include, but are not limited to, statements regarding the success of the Company and its subsidiary's products and services. The Company cautions that numerous factors could cause actual results to differ materially from any forward-looking statements made by the Company. Please refer to the section on forward-looking statements included in the Company's Form 10-K filed with the Securities and Exchange Commission.