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A 2.45 GHz fully differential CMOS power amplifier (PA) with high efficiency and linearity is presented. For this work, a 0.18-μm standard CMOS process with Cu-metal is employed and all components of the two-stage circuit except an output transformer and a few bond wires are integrated into one chip. To improve the linearity, an optimum gate bias is applied for the cancellation of the nonlinear harmonic generated by gm3 and a new harmonic termination technique at the common source node is adopted along with normal harmonic termination at the drain. The harmonic termination at the source effectively suppresses the second harmonic generated from the input and output. The amplifier delivers a 20.5dBm of P1dB with 17.5 dB of power gain and 37% of power-added efficiency (PAE). Linearity measurements from a two-tone test show that the power amplifier with the second harmonic termination improves the IMD3 and IMD5 over the amplifier without the harmonic termination by maximally 6 dB and 7 dB, respectively. Furthermore, the linearity improvements appear over a wide range of the power levels and the linearity is maintained under -45 dBc of IMD3 and -57dBc of IMD5 when the output power is backed off by more than 5dB from P1dB. From the OFDM signal test, the second harmonic termination improves the error vector magnitude (EVM) by over 40% for an output power level satisfying the 4.6% EVM specification.