diff --git a/components/bt/controller/esp32c2/Kconfig.in b/components/bt/controller/esp32c2/Kconfig.in
index 69623987e0..a2c55c3738 100644
--- a/components/bt/controller/esp32c2/Kconfig.in
+++ b/components/bt/controller/esp32c2/Kconfig.in
@@ -693,6 +693,7 @@ config BT_CTRL_RUN_IN_FLASH_ONLY
         - For HCI_LE_Extended_Create_Connection command, only 1M phy's connection parameters will be applied.
           Other phys' will be ignored.
         - For extended scanning, we may be unable to receive the extended adv with 300us MAFS.
+        - To match performance, phy needs to be reduced, you need to disable ESP_PHY_IRAM_OPT.
 
 config BT_LE_PLACE_CONN_RELATED_INTO_IRAM
     bool "Place the connection-related code into IRAM"
diff --git a/components/esp_phy/Kconfig b/components/esp_phy/Kconfig
index 75b5be45cd..9fabce3e9b 100644
--- a/components/esp_phy/Kconfig
+++ b/components/esp_phy/Kconfig
@@ -177,5 +177,14 @@ menu "PHY"
             default n
             help
                 Select to support record and query phy used time.
+
+        config ESP_PHY_IRAM_OPT
+            bool "PHY IRAM speed optimization"
+            default y
+            help
+                Select this option to place frequently called PHY library functions in IRAM.
+                When this option is disabled, more than 1.1Kbytes of IRAM memory will be saved,
+                but PHY performance will be reduced. This config only affect esp32c2 now.
+
     endif
 endmenu  # PHY
diff --git a/components/esp_phy/lib b/components/esp_phy/lib
index 5466bfa8fd..af5ba3d475 160000
--- a/components/esp_phy/lib
+++ b/components/esp_phy/lib
@@ -1 +1 @@
-Subproject commit 5466bfa8fde26f45cb1f7fb5dc864cbb7e50e139
+Subproject commit af5ba3d475bda69a8492830587c402a19e5ae9a4
diff --git a/components/esp_phy/linker.lf b/components/esp_phy/linker.lf
index 5dc2f9f23b..4f79d1c357 100644
--- a/components/esp_phy/linker.lf
+++ b/components/esp_phy/linker.lf
@@ -10,12 +10,32 @@ if IDF_TARGET_ESP32 = y:
     entries:
         .phyiram+
 
+if IDF_TARGET_ESP32C2 = y:
+    [scheme:phy_iram]
+    entries:
+    if ESP_PHY_IRAM_OPT = y:
+        phy_iram -> iram0_text
+    else:
+        phy_iram -> flash_text
+
+    [sections:phy_iram]
+    entries:
+        .phyiram+
+
+[mapping:btbb]
+archive: libbtbb.a
+entries:
+    if IDF_TARGET_ESP32C2 = y:
+        * (phy_iram)
+
 [mapping:phy]
 archive: libphy.a
 entries:
     * (noflash_data)
     if IDF_TARGET_ESP32 = y:
         * (phy_iram)
+    if IDF_TARGET_ESP32C2 = y:
+        * (phy_iram)
 
 [mapping:rtc]
 archive: librtc.a
diff --git a/components/esp_wifi/Kconfig b/components/esp_wifi/Kconfig
index 0793d53fdf..96ab678d40 100644
--- a/components/esp_wifi/Kconfig
+++ b/components/esp_wifi/Kconfig
@@ -345,6 +345,7 @@ menu "Wi-Fi"
             select PM_SLP_DEFAULT_PARAMS_OPT
             select PM_SLEEP_FUNC_IN_IRAM
             select ESP_PERIPH_CTRL_FUNC_IN_IRAM
+            select ESP_PHY_IRAM_OPT
             default y if SOC_WIFI_HE_SUPPORT
             help
                 Select this option to place called Wi-Fi library TBTT process and receive beacon functions in IRAM.
diff --git a/tools/test_apps/configs/sdkconfig.flash_auto_suspend_iram_reduction b/tools/test_apps/configs/sdkconfig.flash_auto_suspend_iram_reduction
index 1dc627ce6c..d109712c02 100644
--- a/tools/test_apps/configs/sdkconfig.flash_auto_suspend_iram_reduction
+++ b/tools/test_apps/configs/sdkconfig.flash_auto_suspend_iram_reduction
@@ -60,7 +60,6 @@ CONFIG_LOG_IN_IRAM=n
 CONFIG_ESP_ROM_PRINT_IN_IRAM=n
 
 # Low power related options
-CONFIG_ESP_WIFI_SLP_IRAM_OPT=n
 CONFIG_PM_SLEEP_FUNC_IN_IRAM=n
 CONFIG_PM_RTOS_IDLE_OPT=n
 CONFIG_ESP_SLEEP_POWER_DOWN_FLASH=n
@@ -70,6 +69,15 @@ CONFIG_ESP_REGI2C_CTRL_FUNC_IN_IRAM=n
 # System common
 CONFIG_ESP_PERIPH_CTRL_FUNC_IN_IRAM=n
 
+# Phy related options
+CONFIG_ESP_PHY_IRAM_OPT=n
+
+# WiFi related options
+CONFIG_ESP_WIFI_SLP_IRAM_OPT=n
+CONFIG_ESP_WIFI_IRAM_OPT=n
+CONFIG_ESP_WIFI_EXTRA_IRAM_OPT=n
+CONFIG_ESP_WIFI_RX_IRAM_OPT=n
+
 #######################################################################################################################
 # Options that will enable IRAM reduction option that are not necessarily safe for all use-cases
 #######################################################################################################################