Advances in semiconductor process and design technology enable the design of complex system chips. Traditional IC design, in which every circuit is designed from scratch and reuse is limited to standard-cell libraries, is more and more replaced by a design style based on embedding large reusable modules, the so-called cores. This core-based design poses a series of new challenges, especially in the domains of manufacturing test and design validation and debug. This paper provides an overview of current industrial practices as well as academic research in these areas. We also discuss industry-wide efforts by VSIA and IEEE P1500 and describe the challenges for future research.