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A novel wave optical simulation method [a localized boundary element method (BEM)] has been developed. This method enables us to execute 3-D wave optical simulation with much smaller memory space and much shorter calculation time than conventional BEMs or finite-difference time domain methods. The light gathering power dependence on cell size and microlens height and distance, the color shading characteristics of inner lens structures, and the light gathering power and cross talk of light waveguide were analyzed by this method. A smaller cell needs a shorter focal length microlens, which can be realized by inner lens structures in CCD or the waveguide structures in CMOS image sensors. It is shown that this method can optimize these structures by calculating the color shading dependence on the microlens shape and the cross talk dependence on the waveguide materials. This method was found to be powerful and useful for the 3-D wave optical analysis of image sensors.