Cyclone III Latch Not Latching

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Would it be safe to say that it is caused by a glitch?

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In my view, a pure guess can't be "safe" because it possibly blinds out the actual reason. I don't see an option for glitch generation in the present test case, I think the possibility of a real interfering signal (crosstalk, ground bounce) should be considered. Depending on the required timing, changing the storage function implementation can reduce the interference susceptibility.

Avoiding latches is a good idea in most cases.