There is provided a trace/failure observation system which is capable of comprehensive collection of information that is needed for checking a desired operation in a system or the like where the amount of information to be observed is large, and which allows easy analysis of the desired operation. The system includes, in a system LSI to be subjected to trace/failure observation: an event detecting means for observing behavior of a portion to be observed; a first data reducing means for performing observation data reduction processing so that observation data from the event detecting means has an amount of information processable to a second data reducing means; and the second data reducing means for performing one or more steps of observation data reduction processing.