IMAGINATION TECHNOLOGIES AND ARM
SIGN STRATEGIC AGREEMENT

ARM To Offer PowerVR Cores To ARM Licensees

KINGS LANGLEY, UK and CAMBRIDGE, UK - Jan. 25, 2001 - Imagination Technologies (LSE:IMG) and ARM (LSE:ARM); (Nasdaq:ARMHY), the industry's leading provider of 16/32-bit embedded RISC processor technology, today announced that they have signed a long term joint development agreement for the integration of PowerVR® graphics cores alongside ARM® microprocessor cores. Initially the integrated cores will be marketed into the mobile phone, personal digital appliance, digital set top box, tethered Internet appliance and portable gaming markets.  The partnership will significantly increase the graphic capabilities of appliances in these markets and is receiving widespread industry support.

Mark Wilce, VP, technology at Symbian says: "Symbian welcome this partnership between ARM and Imagination Technologies.  In the next generation of wireless information devices, there is an increasing need for advanced graphics support.  We look forward to working with the results of this partnership."

Says Andy Trott, director of technology and strategic development, Pace Micro Technology: "The combination of ARM and Imagination Technologies has the potential to transform the capabilities of consumer electronics devices, delivering substantially improved content over current generation products. We are impressed with the potential of their united technologies."

Under the terms of the agreement, ARM will market and licence the PowerVR graphics and video cores to its customer base, for use with current and future ARM microprocessor families. Both parties will receive revenues from the agreement, the first of which are expected in CY2002. ARM is already in discussion with its customer base - which includes many of the world's leading semiconductor and electronics companies - about the integration of PowerVR into future computing and communication devices.

Hossein Yassaie, CEO, Imagination Technologies, says: "This is a significant strategic agreement that brings together the strongest patented technologies available for embedded RISC processing and advanced graphic rendering. The combined ARM and PowerVR architectures have the potential to become the standard technology across these markets enabling devices that far surpass the current generation."

Robin Saxby, Chairman and CEO of ARM, says: "This agreement underlines our commitment to working with industry leaders to bring innovative solutions to our partners. The combination of market-leading ARM microprocessor technology with Imagination Technologies' unique 3D graphics technology, will further enable a new breed of exciting media rich consumer products."

Licensees will be able to create system on chip (SoC) products that incorporate an ARM microprocessor core as the main CPU alongside PowerVR graphics and video technology.  This can be tailored to maximise the potential of digital devices, which are increasingly demanding advanced graphic capabilities and interactivity, including: personal digital appliances (PDA), mobile phones, digital set top boxes (STB), tethered Internet appliances and portable gaming devices.

About ARM
ARM is the industry's leading provider of 16/32-bit embedded RISC microprocessor solutions. The company licenses its high-performance, low-cost, power-efficient RISC processors, peripherals, and system-chip designs to leading international electronics companies. ARM also provides comprehensive support required in developing a complete system. ARM's microprocessor cores are rapidly becoming the volume RISC standard in such markets as portable communications, hand-held computing, multimedia digital consumer and embedded solutions. More information on ARM is available at www.arm.com.

About PowerVR Technologies
PowerVR Technologies - a division of Imagination Technologies - develops and markets the unique PowerVR graphics/video technology. Existing partners licensing the technology include NEC and STMicroelectronics. PowerVR Technologies design wins have included Sega's latest video games console, Dreamcast, the Naomi arcade system, which is used in the majority of new arcade machines worldwide, and numerous PC add-in and OEM customers. More information is available on the PowerVR Technologies web site at www.powervr.com.

About Imagination Technologies
Imagination Technologies Group plc is an international company that develops, licenses and supplies market-leading 2D/3D graphics, digital video, audio and speech technologies and products for consumer entertainment and PC Markets. The company has deployed and planned technologies for games consoles, PCs, arcade entertainment machines, digital set-top boxes, in car information/entertainment systems, and mobile devices. Since it was founded in 1985, the company has introduced, via licensing arrangements or directly, a succession of innovative technologies, silicon chips and add-in boards, which have played a major role in the development of multimedia and computer-based entertainment systems. Imagination Technologies Group plc has its corporate headquarters in the United Kingdom and is publicly traded on the London Stock Exchange (FTSE:IMG). More information is available on the Imagination Technologies web site at www.imgtec.com.