Latency is the measure of how long it takes to complete one or more operations in a digital circuit. You can measure latency at different granularities. For example, you can measure the latency of a single operation or the latency of the entire circuit.
You can measure latency in time (for example, microseconds) or in clock cycles. Typically, clock cycles are the preferred way to express latency because measuring latency in clock cycles disconnects latency from your circuit clock frequency. By expressing latency independent of circuit clock frequency, it is easier to discern the true impact of circuit changes to the performance of the circuit.
You may want to have low latency, but lowering latency might result in decreased fMAX.
For more information and an example, refer to Pipelining.
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