—In the past, software based scan chain defect diagnosis can be roughly classified into two categories (1) model-based algorithms, and (2) data-driven algorithms. In this paper we first analyze the advantages and disadvantages of each category of the chain diagnosis algorithms. Next, an adaptive signal profiling algorithm that can use manufacturing ATPG scan patterns is proposed for scan chain diagnosis. Finally, several case studies and their PFA results are presented to validate the accuracy and effectiveness of the proposed algorithm. Keywords-chain diagnosis, signal profiling, adaptive system, physical failure analysis