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I am trying to use arm softcore along with my RTL in Kintex 7 board. What tool set is suggested? for both hardware and embedded development?
As far as I know you can use ISE webpack with Kintex 7 (free)
(https://www.xilinx.com/publications/matrix/Software_matrix.pdf)
Provided that you export the JTAG/Serial wire debug interface, you can use standard microcontroller development tools for software development. For example, if you are using Cortex-M processors, you can use Keil Microcontroller Development Kit (www.keil.com), IAR EWARM (www.iar.com), etc.