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A new (AlGa)As/GaAs MODFET integrated circuit simulator is described. Our simulator is a customized version of SPICE incorporating the extended charge control model for MODFET's and the velocity saturation model for ungated FET's used as the load devices. Comparison of our simulator results with the measured data show good agreement for both dc and transient responses. We also propose a set of analytically derived design guidelines for MODFET inverter stages. Design parameters such as the optimum ratio of driver to load saturation currents, noise margins and switching delays can be readily related to the device process parameters. Our simulation results indicate that the inverter speed increases with increasing driver threshold voltages but there is an optimum threshold voltage, of approximately 0.4 V for our devices, which provide the highest noise margin.