System Generator uses the IP Catalog compilation type as the default generation target.
The IP Catalog compilation target allows you to package your System Generator design into an IP module that can be included in the Vivado IP catalog. From there, the generated IP can be instantiated into another Vivado user design as a submodule.
System Generator first generates an HDL NetList based on the block design. If there are Vivado IP modules in the design, all the necessary IP files are copied into a subfolder named IP. Finally, all the RTL design files and Vivado IP design files are included into a ZIP file that is placed in a subfolder named ip_catalog.