The 2.5 years project is carried out in the framework of ELIKO - an electronic competence centre, which is financed by the state and EU funds. At different stages up to 15 students and engineers will be working on the project. The project contains two main branches - basic research and sw/tool design. Artec will contribute its existing cores and knowledge about cryptography/VPN. TTU is mainly involved in Test, verification and formal methods of specifications. The methods and tools will cover all design cycle from specification to implementation. Four major new IP blocks will be developed in tools/sw design branch with six months terms starting from Q2 2005.