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The exploding complexity of new chips and the ever decreasing time-to-market window are forcing fundamental changes in the way systems are designed. The advent of Systems-on-Chip (SoC) based on pre-designed intellectual-property (IP) cores has become an absolute necessity for embedded systems companies to remain competitive. Designing an SoC, however, is extremely complex, as it encompasses a range of difficult problems in hardware and software design. This paper explains a wide range of SoC issues including market drivers and trends, technology and integration aspects, early architecture definition, methodology, hardware and software design and verification techniques.