In this paper, a detailed analysis of silicide induced stress is presented. Micro-Raman spectroscopy measurements of the silicide induced stress in the silicon substrate are combined with simulations by Finite Element Modeling down to 0.1 μm MOS technologies. It is shown that the scaling possibilities of TiSi2 and of CoSi2 are both hampered by the increasing silicide stress, which can even result in the generation of dislocations in the silicon substrate. Because of the difference in material properties between TiSi2 and CoSi2, TiSi2 induces a higher stress in the silicon substrate than CoSi2. It is also proven that the silicide induced stress affects the performance of transistors and diodes. Therefore, the mechanical characteristics related to the silicide formation become a critical parameter in the optimization of the silicide for sub-0.25μm MOS technologies.