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A headroom voltage for example can also be the minimum Vds voltage of a Nmos transistors before it goes from saturation into triode! It is always talked about within current mirrors and cascode mirrors.
it can be also the voltage necessary to keep ALL transistors working in the saturation region in some circuit. For example, in a cascode mirrors the headroom voltage is (Vgs-Vt)+Vgs, which is the minimum Vout to keep the upper MOS in saturation.
Even simpler, the voltage drop across a fully saturated NMOS is the threshold voltage. So if you have a Vdd of 1.2V and a 2 input nand gate (2 nmos in series) each with a threshold voltage of 600mV, then theoretically your NAND gate will work. Now what if you wanted a 3 input NAND gate - there is not enough head room to allow for this, since you need 1.8V. If the threshold voltage was 400mV thenm you might just get by but what if you wanted a 4 input nand gate? etc.
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