Binary collision simulations of high-fluence 1 keV Si+ ion implantation into 8-nm-thick SiO2 films on (001)Si were combined with kinetic Monte Carlo simulations of Si nanocrystal (NC) formation by phase separation during annealing. For nonvolatile memory applications, these simulations help to control the size and location of NCs. For low concentrations of implanted Si, NCs form via nucleation, growth, and Ostwald ripening, whereas for high concentrations Si separates by spinodal decomposition. In both regimes, NCs form above a thin NC free-oxide layer at the SiO2/Si interface. This, self-adjusted layer has just a thickness appropriate for NC charging by direct electron tunneling. Only in the nucleation regime the width of the tunneling oxide and the mean NC diameter remain constant during a long annealing period. This behavior originates from the competition of Ostwald ripening and Si loss to the Si/SiO2 interface. The process simulations predict that, for nonvolatile memories, the technological demands on NC synthesis are fulfilled best in the nucleation regime. © 2002 American Institute of Physics.