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Power Electronic Module (PEM) design requires simultaneous analysis of thermal, electrical, and mechanical parameters to design an optimal layout. The current design process being used by package designers involves a sequential procedure instead of a simultaneous process. Each design step involves the analysis of the thermal, electrical or mechanical aspects of the design. As a result, the designer has to iterate between the various design process steps in order to achieve an optimal design. This causes a substantial increase in the design cycle time. A new methodology has been developed and implemented in this work that helps to automate and optimize the PEM design process. Power-CAD uses an electrothermal simulation methodology, a parasitic extraction tool, and an optimization algorithm that helps to achieve an optimal layout for a discrete PEM. This approach promises to save time and money for the PEM design industry by significantly reducing the number of design cycles.