ARC Acquires Tenison to Speed Time to Market of Customers' Complex SoC Designs; Establishes Cambridge Engineering Center

New Products Will Model and Simulate ARC® Customers' Chips That Integrate ARC with Non-ARC Intellectual Property

ST. ALBANS, England -- June 15, 2007 – ARC International (LSE: ARK) today announced that it has acquired Tenison Technology EDA, Limited, a privately held company that is a leading provider of software tools used to help develop system-on-chip (SoC) designs. Its customer list includes "Tier 1" companies such as Broadcom, Freescale, and Renesas. The acquisition includes fifteen key members of Tenison's engineering team, patents, and products such as the VTOC™ software suite and IP eXchange technology.

The acquired products will provide highly accurate models of ARC's configurable processors and multimedia subsystems. Moreover, they will allow customers to simulate virtually all logic on any ARC-Based™ chip, including those using non-ARC technologies such as customer-developed intellectual property (IP) and IP from other suppliers like ARM Holdings.

Additionally, ARC International announced the establishment of an engineering center in Cambridge, England, and the appointment of Dr. David Greaves to ARC's Office of the CTO (Chief Technology Officer). The office's charter is to advance ARC's technology innovation and leadership in the areas of configurability, multicore SoC design, and software development environments. Dr. Greaves is a faculty member and lecturer at the University of Cambridge Computer Laboratory, a founder of Virata, and the founder and chief scientist of Tenison; he is a technology advisor to companies such as AT&T and BT (British Telecommunications).

Founded in 1999 from work originating at Cambridge University, Tenison's advanced modeling, simulation, and verification products help chip designers accurately predict critical metrics of an SoC before the design is sent for manufacture. This speeds chip development, shortens time to market, and results in a more optimized solution.

Carl Schlachte, president and CEO of ARC International, said, "SoCs for consumer applications are increasingly dominated by chips incorporating multiple processors along with IP from multiple sources. To address the design challenges of customers using these technologies, ARC now will provide its own ‘Star IP' and software tools along with Tenison's technology to enable customers to create power-efficient, high performance, and low cost SoCs. This will enhance ARC's ability to service customers using ARC subsystems and cores as part of an SoC design that includes other design components."

The consideration will be £1 million in cash. The acquisition may have a cost impact of up to £350,000 on ARC's financial year 2007 operations. For the year ended December 31, 2006 Tenison reported a net loss of £1.4 million. Its gross assets as of May 31, 2007 were £275,000. Under the terms of the UKLA listing rules this acquisition is a Class 2 transaction and does not require shareholder approval.

About ARC International plc

ARC International is the world leader in configurable media subsystems and CPU/DSP processors. Used by over 140 companies worldwide, ARC's configurable solutions enable the creation of highly differentiated system-on-chips (SoCs) that ship in hundreds of millions of devices annually. ARC's patented subsystems and cores are smaller, consume less power, and are less expensive to manufacture than competing products.