Until recent device nodes, lithography has been struggling to improve its resolution limit. Even though next generation lithography technology is now facing various difficulties, several innovative resolution enhancement technologies, based on 193nm wavelength, were introduced and implemented to keep the trend of device scaling. Scanner makers keep developing state-of-the-art exposure system which guarantees higher productivity and meets a more aggressive overlay specification. “The scaling reduction of the overlay error has been a simple matter of the capability of exposure tools. However, it is clear that the scanner contributions may no longer be the majority component in total overlay performance. The ability to control correctable overlay components is paramount to achieve the desired performance.(2)” In a manufacturing fab, the overlay error, determined by a conventional overlay measurement: by using an overlay mark based on IBO and DBO, often does not represent the physical placement error in the cell area of a memory device. The mismatch may arise from the size or pitch difference between the overlay mark and the cell pattern. Pattern distortion, caused by etching or CMP, also can be a source of the mismatch. Therefore, the requirement of a direct overlay measurement in the cell pattern gradually increases in the manufacturing field, and also in the development level. In order to overcome the mismatch between conventional overlay measurement and the real placement error of layer to layer in the cell area of a memory device, we suggest an alternative overlay measurement method utilizing by design, based metrology tool. A basic concept of this method is shown in figure1. A CD-SEM measurement of the overlay error between layer 1 and 2 could be the ideal method but it takes too long time to extract a lot of data from wafer level. An E-beam based DBM tool provides high speed to cover the whole wafer with high repeatability. It is enabled by using the design as a reference for overlay measurement and a high speed scan system. In this paper, we have demonstrated that direct overlay measurement in the cell area can distinguish the mismatch exactly, instead of using overlay mark. This experiment was carried out for several critical layer in DRAM and Flash memory, using DBM(Design Based Metrology) tool, NGR2170™.