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In Circuit Emulators or ICE let you debug the code on your microcontroller in real time. They connect to your target circuit, using PC USB port. In your development environment, you can step through the code or run to breakpoints.
This lets you watch the values in registers or memory locations, see the state of hardware pins and check timings
Emulators are the essential tool for serious microcontroller code development. Kanda have emulators for PIC, AVR, ARM, Renasas, ST and NXP microcontrollers