ARC International plc Announces Trading Update For the Year Ended 31 December 2006

ARC's Full Year and Second Half 2006 Unaudited Revenues To Exceed Market Expectations

ELSTREE, England, January 10, 2007 – ARC International (LSE: ARK), the world leader in configurable subsystems and CPU/DSP processors, today announced that its unaudited revenue for the financial year ended 31 December 2006 is expected to be not less than £13.3 million, a 28 percent increase compared to financial year 2005. Unaudited revenue for the second half of financial year 2006 is expected to be not less than £7.3 million, reflecting a 22 percent increase compared to the first half of 2006 and a 46 percent increase compared to the same reporting period in the second half of 2005. These results exceed market expectations, and reflect progress toward achieving the strategic goals of attracting "tier 1" companies to adopt ARC's patented configurable solutions, increasing median deal sizes, and signing larger agreements that include multiple ARC products.

Carl Schlachte, president and CEO of ARC International, said, "We are pleased about our progress in 2006 and that unaudited revenues for the full year and second half of the financial year 2006 are expected to be higher than current market consensus. This reaffirms our company's strategy to provide value-added configurable solutions for high-growth consumer applications. ARC's leadership position in the field of media subsystems is driving a higher percentage of company revenue and licensing agreements."

Announcement of Preliminary Results for Financial Year 2006
On Wednesday 14 February 2007 ARC International will announce results for the twelve months ended 31 December 2006. A morning meeting will be held in London for analysts. Interested parties should contact Financial Dynamics or ARC International 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 to create system-on-chip (SoC) designs that provide a strategic competitive advantage. ARC's patented configurable products are smaller, consume less power, are less expensive to manufacture, 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).