Scan testing and scan compression are key to realizing cost reduction and shipped quality. New defect types in ever more complex designs require increased compression. However, increased density of unknown (X) values reduces effective compression. A scan compression method can achieve very high compression and full coverage for any density of unknown values. The described techniques can be fully integrated in the design-for-test (DFT) and automatic test pattern generation (ATPG) flows. Results from using these techniques on industrial designs demonstrate consistent and predictable advantages over other methods.