Decoupling capacitors are widely used to reduce power supply noise. On-chip decoupling capacitors have traditionally been allocated into the white space available on a die or placed inside the rows in standard cell circuit blocks. The efficacy of on-chip decoupling capacitors depends upon the impedance of the power/ground lines connecting the capacitors to the current loads and power supplies. A design methodology for placing on-chip decoupling capacitors is presented in this paper. A maximum effective radius is shown to exist for each on-chip decoupling capacitor. Beyond this effective distance, a decoupling capacitor is ineffective. Depending upon the parasitic impedance of the power distribution system, the maximum voltage drop seen at the current load is caused either by the first droop (determined by the rise time) or by the second droop (determined by the transition time). Two criteria to estimate the minimum required on-chip decoupling capacitance are developed based on the crit...