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In order to take full advantage of VLSI, new design methods are necessary to improve the yield and testability. Designs which incorporate redundancy to improve the yields of high density memory chips are well known. The goal of this paper is to motivate the extension of this technique to other types of VLSI logic circuits. The benefits and the limitations of on-chip modularization and the use of spare elements are presented, and significant yield improvements are shown to be possible.