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In this paper, we propose a new test data compression method for reducing test data volume and test application time. The proposed method consists of two steps: scan chain compaction and dictionary-based compression scheme. The scan chain compaction provides a minimum scan chain depth by using compaction of the compatible scan cells in the scan chain. The compacted scan chain is partitioned to the multiple internal scan chains for using the fixed-length index dictionary-based compression scheme that provides the high compression ratio and the fast testing time. The proposed compression method delivers compressed patterns from the ATE to the chip and drives a large number of multiple internal scan chains using only a single ATE input and output. Experimental results for the ISCAS-89 test benches show that the test data volume and testing time for the proposed method are less than previous compression schemes.