diff --git a/arch/arc/mm/cache.c b/arch/arc/mm/cache.c
index 4135abec3fb0..63e6e6504699 100644
--- a/arch/arc/mm/cache.c
+++ b/arch/arc/mm/cache.c
@@ -113,10 +113,24 @@ static void read_decode_cache_bcr_arcv2(int cpu)
 	}
 
 	READ_BCR(ARC_REG_CLUSTER_BCR, cbcr);
-	if (cbcr.c)
+	if (cbcr.c) {
 		ioc_exists = 1;
-	else
+
+		/*
+		 * As for today we don't support both IOC and ZONE_HIGHMEM enabled
+		 * simultaneously. This happens because as of today IOC aperture covers
+		 * only ZONE_NORMAL (low mem) and any dma transactions outside this
+		 * region won't be HW coherent.
+		 * If we want to use both IOC and ZONE_HIGHMEM we can use
+		 * bounce_buffer to handle dma transactions to HIGHMEM.
+		 * Also it is possible to modify dma_direct cache ops or increase IOC
+		 * aperture size if we are planning to use HIGHMEM without PAE.
+		 */
+		if (IS_ENABLED(CONFIG_HIGHMEM) || is_pae40_enabled())
+			ioc_enable = 0;
+	} else {
 		ioc_enable = 0;
+	}
 
 	/* HS 2.0 didn't have AUX_VOL */
 	if (cpuinfo_arc700[cpu].core.family > 0x51) {
@@ -1158,19 +1172,6 @@ noinline void __init arc_ioc_setup(void)
 	if (!ioc_enable)
 		return;
 
-	/*
-	 * As for today we don't support both IOC and ZONE_HIGHMEM enabled
-	 * simultaneously. This happens because as of today IOC aperture covers
-	 * only ZONE_NORMAL (low mem) and any dma transactions outside this
-	 * region won't be HW coherent.
-	 * If we want to use both IOC and ZONE_HIGHMEM we can use
-	 * bounce_buffer to handle dma transactions to HIGHMEM.
-	 * Also it is possible to modify dma_direct cache ops or increase IOC
-	 * aperture size if we are planning to use HIGHMEM without PAE.
-	 */
-	if (IS_ENABLED(CONFIG_HIGHMEM))
-		panic("IOC and HIGHMEM can't be used simultaneously");
-
 	/* Flush + invalidate + disable L1 dcache */
 	__dc_disable();