Fault simulation is not required to validate ATPG output. However, an ATPG tool will internally call a fault simulation tool. This is because once a pattern is generated to cover a specific fault, it is fault simulated to see if it covers any other faults that were not explicitly targeted. If other faults are covered they can be dropped from further consideration (unless a specific N-detect level is a requirement, but that’s a different discussion….)
Stand-alone fault simulators do also exist. They are typically used to fault grade functional vectors. Fault simulators are also included in LBIST solutions to fault grade the pseudo random patterns generated by the LBIST.

If Fault Simulation is not required to validate ATPG then why do we have an option to perform fault simulation in tools like fastscan?

Fastscan is a versatile test pattern generation and fault simulation tool. It can be used to fault grade any set of scan patterns against many types of user definable fault types. Again, for the fault types than Fastscan is capable of targeting, it is not necessary to perform a separate fault simulation run on the patterns Fastscan generates. However you can for example fault simulate those generated patterns on other fault types.

– Courtesy http://www.dftforum.com answered by Steve Pateras