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Superconducting single-flux-quantum (SFQ) circuits have so far been developed and optimized for operation at or above helium temperatures. The SFQ approach, however, should also provide potentially viable and scalable control and readout circuits for Josephson-junction qubits and other applications with much lower, millikelvin, operating temperatures. This paper analyzes the overheating problem which becomes important in this temperature range. We suggest a thermal model of the SFQ circuits at subkelvin temperatures and present experimental results on overheating of electrons and silicon substrate which support this model. The model establishes quantitative limitations on the dissipated power both for “local” electron overheating in resistors and “global” overheating due to ballistic phonon propagation along the substrate. Possible changes in the thermal design of SFQ circuits in view of the overheating problem are also discussed.