Trading Statement

Arc International PLC
6 July 2001





         ARC INTERNATIONAL TRADING STATEMENT FOR SECOND QUARTER 2001



  * Second quarter 2001 turnover adversely affected by delays in concluding
    licence agreements
  * 7 design licences and 6 additional customers won in second quarter
    bringing the totals to 87 licences from 56 customers
  * New customers include a major semiconductor manufacturer
  * 4 revenue generating partner agreements signed
  * Market interest in ARC's technology remains high although timing of
    future revenues is uncertain
  * Cost containment measures are being implemented



Elstree, UK - 6 July 2001: ARC International plc (LSE: ARK.L), a leading
designer and developer of customisable, high-performance microprocessors and
related intellectual property solutions, today provided an update on trading
during the second quarter ended 30 June 2001.

Against a background of difficult market conditions for its US and European
customers, ARC International's preliminary, unaudited turnover for the three
months ended 30 June 2001 is expected to be approximately £3.6 million,
compared with turnover of £3.7 million in the three months ended 31 March
2001. The company expects to report a net loss of approximately £6.5 million
for the second quarter, compared with a net loss of £4.4 million for the first
quarter of 2001. Actual results for the quarter ended 30 June 2001, will be
reported on 1 August 2001.

By the end of the second quarter, total design licences had been increased to
87 licences from 56 customers compared with 80 licences from 50 customers at
the end of the first quarter. Our new customers include a major semiconductor
manufacturer who has contracted for a multiple-licence agreement. In addition
four revenue generating partner agreements were concluded during the quarter.

The company's cash position remains strong with approximately £130 million in
hand at the end of the second quarter. A programme of cost containment
measures is underway to ensure that the drive towards profitability is
maintained in the current challenging market conditions.

On 2 July Bill Caparelli joined the company as Senior Vice President Worldwide
Sales, adding extensive experience of growing businesses within the
semiconductor industry, having held senior sales and general management
positions in Advanced Micro Devices, VLSI Technology, Alliance Semiconductor
and Cirrus Logic.

Commenting on the second quarter, Bob Terwilliger, Chief Executive Officer,
said:

'Potential demand for ARC's technology has continued to be strong, as
reflected by our active customer prospect numbers, repeat usage by established
customers and the addition of major new licensees. However, the slowdown in
the semiconductor industry has resulted in customer hesitancy over concluding
licence agreements. In particular, during the critical final days of the
quarter, when normally many licensing agreements are concluded, a number of
deals were not confirmed. The principal reason given by customers for the
delays was uncertainty about their end markets.

'We have strengthened our sales management and are increasing the focus of the
sales team to ensure that we exploit our opportunities to the full. We fully
expect our market to return to its strong growth trend in due course but the
timescale for that is at present uncertain. While the visibility in our market
is currently limited, we are confident about the longer-term prospects for our
innovative technology.'



ARC will host a conference call for analysts and investors at 9.00 a.m. BST
today, 6 July. The dial in numbers for participants will be:

UK: 020 8240 8245

International: [phone]

Participants should quote: ARC International.

A replay of the call will be available for five days on the following numbers:

UK: 020 8288 4459. Access code: 683622

International: [phone]. Access code: 683622

A recording of the call will also be audio streamed on the Investor Relations
section of the website: www.arccores.com from approximately 2.00 p.m. on 6
July.



For further information, please contact:

Peter Aubusson

Investor Relations Manager

ARC International plc

[phone]



Citigate Dewe Rogerson

Sue Pemberton/Freida Davidson

[phone]



About ARC International

ARC International plc is a leading developer of customisable, high-performance
microprocessor cores, including ARCtangentTM, and related intellectual
property technology enabling designers to reduce time to market for their
system-on-a-chip products. 56 customers use ARC's technology, including:
BrightCom, Conexant, Fujitsu Microlectronics, IBM, Infineon Technologies,
SanDisk, Texas Instruments and VTech Communications. Products available based
on ARC's technology include digital still cameras, set-top boxes, and network
processors.

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 for an integrated approach to system on a chip development. ARC's
third party partners include Intrinsix, Flextronics, Wind River, Xilinx, TSMC,
UMC, Cadence and Synopsys.

With headquarters in Elstree, England, ARC International plc and its group
companies employ approximately 300 people in research and development, sales,
and marketing offices across North America, Europe and Israel. ARC
International plc is listed on the London Stock Exchange (LSE:ARK).

The company's website is located at www.arccores.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) Limited.

    All other brands or product names are the property of their respective
                                   holders.