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Atmel Adopts Configurable ARC™ Video Subsystem for Multimedia Handheld Devices

ARC's Configurable Subsystem Solution Wins Acceptance Over Fixed
Architecture Alternative at Major ASSP Manufacturer

ELSTREE, England, August 1st, 2006 - ARC International (LSE: ARK) today
announced that Atmel® Corporation (Nasdaq:ATML), a worldwide leader in the
design, manufacturing and marketing of advanced semiconductors, has taken a
license for the ARC™ Video Subsystem.

"We evaluated several alternatives before making our decision," said Tassos
Markas, Director of Multimedia at Atmel Corporation. "ARC's Video Subsystem
was compelling because it met the necessary criteria of low-cost and small size,
while observing our power budget. In addition, the ARC Video Configurable
Subsystem provided us with a solution that will enable us to quickly port our
video and imaging technologies on to a programmable platform.

"Atmel's adoption of the ARC Video Subsystem underscores the industry trend
toward configurable platforms and away from single-function products," said
Derek Meyer, senior vice president of sales and marketing at ARC International.
"By leveraging the power of ARC's patented configurability, our customers have
the ability to add their proprietary value so the resulting ASSP can command a
higher price in the marketplace. This is a benefit that fixed architecture vendors
cannot offer."

About the ARC™ Video Subsystem
The ARC Video Subsystem is based upon an ARC 700 family core that is
coupled with the company's award winning single instruction multiple data
(SIMD) accelerator, which was specifically designed for video and audio
processing. A media-centric DMA engine incorporated in the ARC Video
Subsystem is highly tuned to efficiently handle multimedia packet transfers.

The ARC Video Subsystem is programmable, enabling the customer to support a
wide range of codecs and algorithms. Because it's based upon an ARC 700
family core, the subsystem can run at up to 533 MHz in a 0.13 micron process,
and developers can use the same software development tools that support a
700-class processor.

The ARC SIMD accelerator in the Video Subsystem was developed to exploit
data parallelism that is abundant in media applications. A single instruction can
compute up to eight separate 16-bit video pixels in parallel through the use of a
128-bit wide data path. ARC's SIMD accelerator utilizes in excess of 100 new
vector instructions that were specifically selected to accelerate algorithms
commonly used in video and imaging applications, such as discrete cosine
transforms and filters. It is directly coupled with the configurable 700 family core
in the subsystem, and is more efficient than using a fixed core with a bus-
connected hardwired co-processor.

ARC, the ARC logo and ARC-Based are trademarks or registered trademarks of ARC International. All other brands or
product names contained herein are the property of their respective owners. This press release may contain certain
"forward-looking statements" that involve risks and uncertainties. For factors that could cause actual results to differ, visit
the company's Website as well as the listing particulars filed with the United Kingdom Listing Authority and the Registrar
of Companies in England and Wales.