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Fault diagnosis is vital for power system operation. This paper presents a hardware-efficient algorithm and the implementation of its field-programmable gate arrays (FPGAs) for substation fault diagnosis. The developed algorithm uses logic-based matrix operations in the inference procedures, which lend itself suitable for hardware implementation. The hardware implemented fault diagnosis system (HIFDS) can achieve high-speed inference and has some advantages over traditional approaches. The performance of the proposed HIFDS is evaluated by the example of a typical substation of Taipower (Taiwan Power Company). The experimental results show that the hardware prototype is feasible for practical applications.