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This lecture covers the design and synthesis of Finite State Machines (FSMs), focusing on steps such as completeness, consistency, and handling ghost states. It explains how to create transition tables and code tables, ensuring the FSM is both complete and consistent. Examples illustrate incomplete and inconsistent states, emphasizing the importance of meeting specific conditions for each state. The lecture concludes with the discussion of ghost states, unused codes in the code table, and different approaches to handling them.