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From the cyclone II datasheet (same rules apply for other families):
There are accompanying waveforms as well. Unknown means unknown folks. It does not mean "New Data." If you are going to write and read from the same address at the same time, it had better be because you "Don't Care" what the read data is.
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After re-reading the datasheet, I see you are right. However, it doesn't make any sense to me. May be you or somebody else could elaborate.
What's the purpose of having a hardware configuration mode that doesn't give you anything, except uncertainty? Why not making the "OLD_DATA" the only option, let alone the default one?
If "Don't care" would give you something, more performance, less power consumption, or whatever, then it would make sense. But none is mentioned in the datasheet. So this mode seems even silly.
The option at the MegaWizard does make some sense. It might be useful when porting the design to a different family, or changing the RAM type. But at the hardware level, I cannot understant its purpose.
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