In order to evaluate the effect of testing technologies such as electron beam (EB) testing and focused ion beam (FIB) reconstruction on the VLSI development cycle, the VLSI development period and cost are analyzed by using detailed fault models which make possible to take into consideration the effect of EB and FIB techniques. First, the specifications of fabricated VLSIs and the VLSI development cycle are modeled. Next the faults which can be diagnosed by such testing techniques are modeled. By using the parametric model of the VLSI development cycle, the development period and cost are analyzed. In the fault diagnosis stage, the use of an EB tester or the combinational use of an EB tester and an FIB equipment, instead of a traditional mechanical prober is considered. It is seen that the development period and cost are reduced by using EB and FIB diagnosis equipments by a factor of about 3. The effect of scan path method is also evaluated by making use of the same simulation method. Results show that the scan path design is effective for the reduction in both period and cost in the development cycle.