ARC International plc Announces Trading Update for the Six Months Ended June 30, 2006.

ELSTREE, England -- ARC International (LSE:ARK), the world leader in configurable multimedia subsystems and CPU/DSP processors, today announced that its unaudited turnover for the first half of fiscal year 2006 will be approximately GBP 6.0 million pounds, 11 percent higher than the corresponding period in 2005. This is broadly inline with expectations, and the company is confident about trading in the second half of the fiscal year.

Commenting on the trading update, Victor Young, chief financial officer, said, "All-time-high revenue from customers in Asia, as well as growing royalty income and improving median deal size from ARC's newer products helped drive top-line growth in our subsystem and processor licensing business. Additionally, all outstanding licensing agreements that were delayed from the second half of 2005 have now been completed. We achieved expense reductions in targeted areas, however we have allowed for certain costs for the first half of fiscal year 2006 to be slightly higher when compared to the same period in 2005 as part of increasing our sales efforts and delivery of new products."

Carl Schlachte, president and chief executive officer, said, "Management is pleased with the results of our strategy to expand the industry's use of ARC's configurable subsystems and processors. In particular, market leaders are publicly embracing our newer products for high-growth multimedia applications, and the Video Subsystem has seen a tremendous ramp in licensing that surpasses any of our standalone microprocessor offerings. Some customers continue to require larger, more complex agreements with extended negotiations. However, we are optimistic with the sales pipeline for the second half of this fiscal year and remain focused on meeting our year-end business goals."

Announcement of Interim Results for the First Half 2006

On Wednesday August 2 ARC International will announce interim results for the six months ending June 30. A morning meeting will be held in London for analysts. Interested parties should contact Tulchan Communications for more information.

About ARC International plc

ARC International is the world leader in configurable subsystems and CPU/DSP processors that are used by semiconductor companies worldwide for next-generation system-on-chip (SoC) design. ARC's patented configurable processor technology enables the development of consumer, networking, mass storage and other cost-sensitive devices that are smaller and provide a higher degree of differentiation over what can be created using "fixed architecture" core alternatives.

ARC International maintains a worldwide presence with corporate and research and development offices in California and Elstree, UK. For more information visit www.ARC.com. ARC International is listed on the London Stock Exchange as ARC International plc (LSE:ARK).

ARC and the ARC logo are trademarks or registered trademarks of ARC International. All other brands or product names contained herein are the property of their respective owners. This press release may contain certain "forward-looking statements" that involve risks and uncertainties. For factors that could cause actual results to differ, visit the company's Website as well as the listing particulars filed with the United Kingdom Listing Authority and the Registrar of Companies in England and Wales.