Capillary instability poses a serious concern for applicability of thin layers in next generation of microelectronics devices. Two completely independent models, Mullins' Grain Boundary Grooving model and the Geometrical Agglomeration model have been used to explain capillary instabilities in CoSi2 layer formed on polycrystalline and single crystal substrates, respectively. Inadequacies of these separate models have been highlighted in our experimental work using cross-sectional transmission electron microscopy. A new empirical model, which incorporates both of these models, will be presented which shows the dependence of groove depth on annealing duration, diffusion coefficient, annealing temperature and grain diameter to film thickness ratio, D. The new model not only explains the various peculiarities of silicide grooving on both single and polycrystalline substrates, it also predicts the severe agglomeration of nanoscale layers experimentally observed during silicide formation by Co/Si reaction at 700 °C, 10 sec rapid thermal anneal. Also, experimental verification of agglomeration suppression schemes which are based on the above empirical model will be presented.