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In this paper, we present a new methodology for custom VLSI layout which aims at a low turnaround time and a high quality of design. VLSI circuits are highly complex, and to speed up the design process we exploit the hierarchical structure of a design, splitting the problem domain into several levels. The process of layout at each level is divided into steps such as placement of rectangular blocks, determining block dimensions, determining interconnection paths, etc. In order to obtain high quality designs, we have systematically analyzed the relationship among the parameters being computed at various steps and have accordingly organized the flow of data and control through these steps. There are two novel features in our scheme. First, we do not follow the usual pure top-down or pure bottom-up approach, so as to take into account the influence of design decisions at the higher levels on design decisions made at the lower levels, as well as vice versa. For example, we determine the geometry of a block taking into consideration the context in which it is placed, as well as the geometries of the lower level blocks it encloses. Second, we perform a look-ahead operation when the values of some. parameters are needed before they are actually deterministically computable by the process. For example, at the time of placement, the area required for routing is estimated statistically (before doing the actual routing) so that a more routable placement can be obtained, thereby avoiding some unnecessary iterations.