How do setup and hold times affect circuit design?

Setup time is the minimum time before the clock edge that the data input to a flip-flop must be stable. Hold time is the minimum time after the clock edge that the data input must remain stable. Violating these times can result in incorrect data being captured, leading to metastability. Designers must ensure that data is stable within these windows to ensure reliable operation of digital circuits. Proper timing analysis and margin allocation are essential to avoid setup and hold time violations.