ARC International plc Releases Trading Update

ARC International Plc
                  

ARC International (LSE:ARK), the world leader in configurable CPU/DSP processor
cores and application subsystems, today released a trading update for the year
ended 31 December 2005. Its unaudited revenue for the second half of financial
year 2005 will be approximately GBP 5.0 million. This reflects 19 licensing
agreements that were completed in the past six months, several of which were for
ARC's new multimedia subsystem products. The company's year-end backlog of
licensing agreements was more than GBP 1.0 million, an increase from less than
GBP 0.5 million compared to the corresponding reporting period in 2004.

ARC continued its drive toward delivering larger, more complex customer
engagements with higher average selling prices. This resulted in a number of
licensing agreements being deferred, taking longer than expected to close and
being delayed into the first half of 2006. These agreements had been expected to
be completed before the end of the financial year. Consequently, revenues in the
second half of financial year 2005 did not meet management's expectations.

Commenting on the trading update, Carl Schlachte, president and CEO, said, "ARC
International continues to benefit from the industry's increasing adoption of
configurability and our leadership position within this market. The environment
for intellectual property licensing is improving, and despite the revenue
shortfall, ARC continues to make good progress towards achieving its strategic
goals."

Announcement of Preliminary Results for Financial Year 2005

On Wednesday 15 February 2006 ARC International will announce results for the
twelve months ended 31 December 2005. A morning meeting will be held in London
for analysts. Interested parties should contact Tulchan Communications for more
information.

About ARC International

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 patented configurable
CPU technology assists 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.

    CONTACT: ARC International
             Lee Garvin Flanagin, 408-437-3433 (Media)
             or
             Tulchan Communications Group
             Julie Foster or Tim Lynch, [phone] (Analysts)