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In modern scan architecture, it is often desirable to compact the output response without jeopardizing the diagnostic resolution. In this paper, we propose an output masking scheme to meet such a stringent requirement. We consider a practical scenario in which an output compactor is in use. We aim to support the harshest condition called compound defect diagnosis, in which faults exist in both the scan chain and the core logic. To overcome the loss of the diagnostic resolution, we incorporate a split-masking scheme, by which one can easily separate the output responses of the faulty chains from those of the fault-free ones. The experimental results demonstrate that the proposed scheme can recover the diagnostic resolution loss induced by an output compactor almost completely without sacrificing the compaction ratio.