Today's Smartcard- and Security-IC's are no longer just phone cards, they are now embedded cryptographic security processors and have to face special challenges concerning architecture, design methodology and technology. The requirements for power consumption and performance are quite contradictory. On the one hand, embedded Java capability needs the high computing power of a 16 bit or even 32 bit CPU core. On the other hand the contactless mode of operation requires lowest power ability. Smartcard IC's have specific co-processors for efficient execution of several cryptographic algorithms and a set of peripherals to enable a flexible use of the controller for many kinds of applications. The most important challenge of security IC's is their resistance against attacks. An overview of invasive and non-invasive attacks and examples for appropriate countermeasures in system and circuit design will be given.