aaron_do
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Hi Gil,
following your math, lets let VD2=1V. Also, VD4 is determined by the load of the current mirror, so lets say for example, that VD4 = 4V. Now VGS4=3V, and VDS4=3V while VGS2=2V, and VDS2=1V. Clearly this is an impossible situation since based on the voltage, N4 should be passing a much larger current than N2. The only way this would work is if VD2 increases to 2V. Then VGS2=VGS4=2V, and VDS2=VDS4=2V. Also, in this situation, the same current flows through N2 as N1.
That was obvioulsy a simply example, but what if VD,n4 is equal to 3V? Well, again, the current through N4= that through N2, so in order to get the same current, the drain of N4 might reduce to 1.9V so that VGS2=2V, VDS2=1.9V, VGS4=2.1V, and VDS4=1.1V. Remember that a MOSFET's current is less sensitive to VDS than VGS. So in this situation, the VDS of N2 decreased from 2V to 1.9V. So the current is quite close to that through N1.
Take the case without the cascode, if VDS1=2V, and VDS2=3V, the difference in current could be quite great.
hope it helps, Aaron
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