This paper focuses on the challenges in the design of embedded real-time DSP SoCs. We first present a generic microarchitecture of an SoC based on a programmable DSP CPU. We then discuss customer requirements for a typical SoC and present SoC design as a multidimensional optimization problem. We highlight the need to look at the design objectives in the context of the complete solution and not just the chip. The paper looks at the challenges in both the SoC definition and the design phases. We propose a concurrent engineering approach for SoC definition and a platform based approach for SoC design. The paper uses DM642 programmable digital media processor SoC as an example to illustrate these approaches.