Chip testing is an effective method to prevent defective or faulty chips from reaching the market. During test application, largescale test patterns are transmitted to a system-on-chip through chip pins. Test application time mainly depends on the transmission time with the limited chip pins. Code-based compressions can reduce the transmission time with no information for the circuit under test, and save storage space for test patterns. Therefore, it is widely applied to compress the test set composed of test patterns. However, codebased compressions fail to fully exploit the characteristics of the test set, resulting in poor compression efficiency. To solve this problem, this study proposes a transform-decomposing method based on significant components of the test set, which makes the current coding compression effect significant. First, extract the significant components that best represent the characteristics of the test set, and then use them as vectors to construct a matrix. Via performing matrix transform in mathematics between the matrix and the test set, the test set can be decomposed into a primary component set (PCS) and a residual component set (RCS). Compared with the original test set, the RCS has better compressibility. As the PCS can be generated on-chip, it does not occupy the transmission time. The experimental results on ISCAS′89 benchmark circuits show that the highest compression ratio for the proposed method reaches 80. 53% on average. Compared with the state-of-the-art transform-composing method, the average compression ratios for different code-based compressions are increased, and that for the most improved code-based compression is increased by 5. 27%.