Carbon Nanotubes (CNTs) are grown using chemical synthesis, and the exact positioning and chirality of CNTs are very difficult to control. As a result, “small-width” Carbon Nanotube Field-Effect Transistors (CNFETs) can have a high probability of containing no semiconducting CNTs, resulting in CNFET failures. Upsizing these vulnerable smallwidth CNFETs is an expensive design choice since it can result in substantial area/power penalties. This paper introduces a processing/design co-optimization approach to reduce probability of CNFET failures at the chip-level. Large degree of spatial correlation observed in directional CNT growth presents a unique opportunity for such optimization. Maximum benefits from such correlation can be realized by enforcing the active regions of CNFETs to be aligned with each other. This approach relaxes the device-level failure probability requirement by 350X at the 45nm technology node, leading to significantly reduced costs associated with upsizing the...