IP company heads into SoC business

ARC International, the UK-based supplier of processor and multimedia cores for use in system-on-chip (SoC) designs has decided to get into the SoC business itself at the same time as trying to cut costs by shifting development to India and Russia.

As part of a reorganisation that will see it create a new, integrated sales operation and a multimedia software business unit, the company will focus on multimedia designs.
The reorganisation plan is expected to cost £3m in the second half of 2008, comprising a cash cost of £1.5m and provisions for future costs, principally relating to surplus property lease obligations of a further £1.5m. Full-year savings are expected to be more than £2m. The company claimed in a statement that although a small impact on revenue is expected over the remainder of 2008, fundamental trading conditions remain unchanged. 
Carl Schlachte, president and CEO, said, “The strategically targeted acquisitions that ARC has successfully executed and integrated, together with continued investment in new lower cost development capabilities, have enabled the company to significantly reposition itself. ARC has an exciting range of multimedia solutions, which are attracting strong and growing interest from OEM and chip customers around the world.

“The proposed restructuring announced today will enable ARC to more effectively and rapidly deploy these products to high volume consumer markets, reduce our cost base, improve margins, and accelerate our transition to profitability and positive cash flow.”

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