ARC International plc Announces Trading Update for the Six Months Ended June 30, 2005

– ARC International (LSE: ARK), the world leader in configurable CPU/DSP processor cores and application subsystems, today announced that its unaudited turnover for the first half of calendar year 2005 will be approximately £5.4 million pounds, nearly 9 percent higher than the corresponding period and business in 2004. The company also disclosed a significant agreement with a new customer and the date for announcing its interim results. See accompanying press release entitled “ARC International Signs Licensing Agreement with a Leading Smartcard Technology Provider.”

Commenting on the trading update, Monica Johnson, chief financial officer, said, “We’re pleased to report that we signed seventeen new licenses for the first half of the year. However, the delay of one contract and expected delivery in the second half for 2 other contracts resulted in revenue below expectations. Headcount and expenses remain inline with management’s expectations and our significant cash position is substantively unchanged from the 2004 year end.”

Carl Schlachte, president and chief executive officer, said, “Although these results are slightly below our own expectations, we continue to be pleased with ARC’s increasing licensing momentum and with the growing adoption of our patented configurable technology by market leaders. The 2005 semiconductor market started slowly and with cautious outlooks from several industry analysts, due to overall inventory build-up in 2004. ARC was initially affected by this environment, but our licensing activity returned to expected levels in recent months. As a result, we remain optimistic about ARC’s business for the remainder of this calendar year and beyond as we continue with our strategy to bring the benefits of configurable CPU technology to the global embedded market.”

Announcement of Interim Results for the First Half 2005
On Wednesday July 27, 2005 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 low-power, high-performance 32-bit configurable CPU/DSP processor cores, subsystems, real-time operating systems and development tools for embedded system design. ARC’s configurable and extendible cores assist customers in the development of next generation digital media, consumer and communications devices, resulting in lower cost, higher performance SoC products.

ARC International maintains a worldwide presence with corporate offices in San Jose, California, USA and Elstree, UK. The company has research and development offices located in England and the United States. For more information please visit the ARC website at: 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.