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Health management and reliability form a fundamental part of the design and development cycle of electronic products. In this paper compact real-time thermal models are used to predict temperatures of inaccessible locations within the power module. These models are then combined with physics of failure based reliability analysis to provide in-service predictions of crack propagation in solder layers and at the bond wire joints as a result of thermal cycling. The temperature estimates are combined with lifetime based reliability models to provide a tool for life consumption monitoring. Rainflow counting algorithms are applied to the temperature vs. time data to extract the occurrence frequencies of different thermal cycling ranges. Knowledge of the life consumed for each different cycle then allows the remaining life time to be estimated under arbitrary operational conditions. The technique can be employed to provide functions such as life consumption monitoring and prognostic maintenance scheduling.