Bypass capacitors play a key role in power distribution circuitry. Specifically, bypass capacitors create low-impedance paths between power and ground at particular frequency depending on the value. At low frequencies, a voltage regulator offers low-impedance paths between the terminal and ground. However, as higher frequency currents propagate through power traces, the source is quite often incapable of maintaining a low-impedance path to ground. Bypass capacitors are used to address this shortcoming. Usually, large bypass capacitors (10µF to 1000μF) at the board-level do a good job up into the kHz range. Due to the size and length of the leads, large capacitors tend to have large inductance values at the switching frequencies of modern digital circuitry. To solve this problem, one can resort to the use of smaller capacitors (nF to μF range) installed locally next to the integrated circuit.

Multilayer ceramic chip or surface-mount capacitors (size 0402 or 0603 or 0805) minimize lead inductances of bypass capacitors in high-speed environments, because the lead inductance is about 1nH. In addition, the inductance from the PCB trace length connecting V_CC to capacitor also impact resonance and effectiveness of the capacitor.

Figure 8-1 shows C1 and C2 close to supply pin.

Recommended value for C1 is 10nF and C2 should be based on operating frequency of the application and capacitor distance from the supply pin. For example at 100MHz operating frequency, use 10nF for C1 and 1nF for C2 with both C1 and C2 within 3mm of the supply pin. The recommended capacitor value need to change for 6mm distance. Do not have long trace between C1 and C2 which could create a resonance circuit that can make power supply noise worse. In that case just have C1 will be better.

Multiple C2 capacitors can used if the primary operating frequency could change based on application of the system. For example, 10nF, 1nF and 0.47nF can be used if the system can operate at 100MHz or 150MHz primary frequencies.