Re Agreement

Arc International PLC
2 May 2001



  Vaishali Semiconductor selects ARC's processor for its BluetoothTM product
                                    family

ARC International (LSE:ARK), a leading designer and developer of customisable,
high performance microprocessors, announced today that Vaishali Semiconductor
has selected ARC's technology for its BluetoothTM product family. ARC's
technology was selected because of its features suited to low cost,
battery-powered applications, and the library of peripheral functions
available from ARC to accelerate product development.

Vaishali Semiconductor is a California-based fabless semiconductor company,
focused on providing leading edge semiconductor products aimed at broadband
transceiver technology such as 10 Gigabit Ethernet, Infiniband and BluetoothTM
wireless networking application-specific standard products (ASSPs).

Dr. David Sear, CEO of Vaishali, said, 'We evaluated all of the leading-edge
suppliers of processor cores to ensure that we chose one which would give our
products a real competitive advantage. We have entered into a comprehensive
licence program with ARC and we have found the company to be extremely
responsive in helping us get the tools together and get trained in their use,
so that our project could get off the ground rapidly.'

He adds, 'Furthermore, we have found that ARC, through its subsidiaries, has
been busy building a powerful library of peripheral functions such as a USB
engine, which offers us a rapid time-to-market with substantial added value to
our products.'

Vaishali chose ARC's 32-bit RISC core because it is a synthesizable 'soft'
core with an extremely small die area. Chris Stacey, director of BluetoothTM
development at Vaishali, comments, 'It offers us plenty of performance at a
very low power consumption, making it ideally suited to the market demands for
low cost, battery-powered BluetoothTM-enabled semiconductor devices. From a
system designer's viewpoint, the ability to design custom ARC instructions so
that embedded software can be optimised for performance and memory utilization
is extremely attractive. Unlike cores only available as 'hard' macros, ARC's
processor can be engineered along with all the other functions to tailor the
design to the needs of the application.'



For more information contact:

ARC International plc:



Media:

Nitin Dahad

Director of Worldwide

Communications

[phone]



Investors:

Peter Aubusson

Investor Relations Manager

[phone]



About ARC International

ARC International plc, is a leading designer and developer of customisable,
high-performance microprocessor cores and related intellectual property
technology for telecommunications, voice and data networking, and consumer
electronics embedded systems. ARC's TangentTM processor is an application
specific processor (ASP) which can be customised for use in a wide variety of
increasingly sophisticated products. The innovative configurability of the
processor enables ARC to license its technology directly to original equipment
manufacturers (OEMs) as well as to semi-conductor merchant vendors. ARC's
technology enables designers to reduce time to market and to work with the
semiconductor manufacturers and technologies of their choice.



ARC's licensees include: Austria Mikro Systeme, BrightCom, Chameleon Systems,
Conexant, Fujitsu Microelectronics, Hyperchip, IBM, Infineon Technologies,
SanDisk, Texas Instruments, Vtech Communications and Xemics.

With headquarters in Elstree, England, ARC International plc and its group
companies employ 302 people in research and development, sales, and marketing
offices across North America and Europe. MetaWare Inc., Precise Software
Technologies Inc. and VAutomation Inc. are wholly owned subsidiaries of ARC
International, providing software development tools, hardware and software
intellectual property and real time operating systems offering multiple
integrated products for system on a chip development.

ARC International plc is listed on the London Stock Exchange (LSE:ARK). The
company's website is located at www.arccores.com



About Vaishali Semiconductor LLC

Vaishali is a privately held company that was founded in 1999 as a fabless
semiconductor company headquartered in Silicon Valley. Design centers in China
and India have been established and a European office has been opened in
Germany. Major investments have been made to develop ASSP products for
wireline, 10 Gigabit Ethernet and Infiniband and wireless BluetoothTM
technology which will use radio to allow notebook PCs, mobile phones, PDAs and
WAP (Wireless Application Protocol) smart phones to share access to the
Internet, a corporate intranet, and emerging data and voice services. Asian,
European, and domestic sales and distribution networks have been formed. The
company's website is located at www.vaishali.com

Statements made in this press release that are not historical facts include
forward-looking statements that involve risks and uncertainties. Important
factors that could cause actual results to differ from those indicated by such
forward-looking statements include, among others, market acceptance of the ARC
technology; fluctuations in and unpredictability of the Company's quarterly
results; general economic and business conditions; regulatory policies adopted
by governmental authorities; assumptions regarding the Company's future
business strategy; changes in technology; competition; ability to attract and
retain qualified personnel; risks associated with the Company's international
operations; and other uncertainties that are discussed in the 'Investment
Considerations' section of the Company's listing particulars dated 28
September 2000 filed with the United Kingdom Listing Authority and the
Registrar of Companies in England and Wales.



ARC International (UK) Ltd. and ARC Cores, Inc., both of which are wholly
owned subsidiaries of ARC International plc, trade under the name of ARC
Cores. ARC Cores is a trademark of ARC International (UK) Ltd. All other
brands or product names are the property of their respective holders.