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A generalized impedance boundary condition is developed to rigorously model on-chip interconnects in the full-wave surface integral equation by a two-region formulation. It is a combination of the electric-field integral equation for the exterior region and the magnetic-field integral equation for the interior conductive region. The skin effect is, therefore, well captured. A novel integration technique is proposed to evaluate the Green's function integrals in the conductive medium. Towards tackling large-scale problems, the mixed-form fast multipole algorithm and the multifrontal method are incorporated. A new scheme of the loop-tree decomposition is also used to alleviate the low-frequency breakdown for the formulation. Numerical examples show the accuracy and reduced computation cost.