ARC Announces Unaudited Preliminary Results for the Six Months Ended June 30, 2007

ST. ALBANS, England -- August 1, 2007 - ARC International (LSE: ARK), the world leader in configurable multimedia subsystems and CPU/DSP processor cores, today announced its unaudited financial results for the six months ended June 30, 2007.

Highlights

Continued Revenue Growth

Revenue up 18% to £7.0 million (1H 2006: £6.0 million)
Royalties up 82% to £2.8 million (1H 2006: £1.5 million)
Bookings up 61% to £13.4 million (1H 2006: £8.3 million)
Current backlog (including deferred revenue) up 14% to £4.1 million (1H 2006: £3.6 million)

Net Loss decreased 29% to £1.2 million, excluding incremental operating expenses of acquired companies (1H 2006: £1.7 million)

Net Loss decreased 9% to £1.5 million including incremental operating expenses of acquired companies

New First-Time Royalty Contributions; Increase in ARC-Based™ Unit Shipments

Post-2003 contracts contributing royalty revenues for the first time
Unit shipments reported by ARC customers up 65%

Completed 2 Strategic Acquisitions

Asset acquisition of Teja Technologies accelerates creation of software platforms and development environments for VRaptor™ Multicore Architecture
Acquisition of Tenison Technology EDA speeds time to market for customers' complex SoC designs

Landmark Agreements Deepen ARC's Partnerships with "Tier 1" Customers

$15 million multiyear license agreement with one of the largest consumer electronics companies
Broadcom standardized on ARC's configurable technology for multimedia applications

Commenting on the company's performance, Carl Schlachte, president and chief executive officer, said, "The industry's adoption of ARC's configurable solutions continues to strengthen. ARC's growth again outpaced the semiconductor market, and revenue increased at close to twice the rate compared to ARC's performance in the first half of 2006. The company continued to sign significant agreements with Tier 1 customers. Also in the first six months ARC completed two strategic acquisitions, which enhances the company's ability to solve customers' chip design challenges by providing more of a complete, integrated solution with optimized hardware and software elements. Increasingly this is one of ARC's competitive differentiators, and the acquisitions are expected to strengthen ARC's revenue growth in the coming years."

To view a full copy of the news release, click here (pdf).

About ARC International

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 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.

ARC International maintains a worldwide presence with corporate and research and development offices in Silicon Valley and St. Albans, UK. For more information visit www.ARC.com. ARC International is listed on the London Stock Exchange as ARC International plc (LSE: ARK).