Aspects of the invention relate to techniques for fault diagnosis based on circuit design partitioning. According to various implementations of the invention, a circuit design of a failing die is first partitioned into a plurality of sub-circuits. The sub-circuits may be formed based on fan-in cones of observation points. Shared gate ratios may be used as a metric for adding fan-in cones of observation points into a sub-circuit. Based on test patterns and the sub-circuits, sub-circuit test patterns are determined. Fault diagnosis is then performed on the sub-circuits. The sub-circuit fault diagnosis comprises extracting sub-circuit failure information from the failure information for the failing die. The sub-circuit fault diagnosis may employ fault-free values for boundary gates in the sub-circuits.