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In this paper, we describe the design of a 2 MHz CMOS frequency reference circuit based on a relaxation oscillator. The circuit provides the clock signal for a read-out circuit of a capacitive sensor. The frequency reference circuit is always active, thus low power consumption is an essential requirement. Supply independent biasing was used to allow supply voltages of 1.8-2.5 V without re-calibration. Simulations showed that the circuit consumes 3.0 μW with 1.8 V supply voltage and stays within ±10% of the nominal oscillation frequency in the operating voltage range and at temperatures from -40 to 85°C. A jitter approximation of Δtmax ≈ 5 ns and phase noise performance were obtained. The relative importance of different noise sources on phase noise are highlighted on the basis of phase transfer simulations. The circuit is being fabricated in a 0.13 μm CMOS process.