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Modern market requires smaller products with more functionalities which are driven by high speed Package Circuit Boards (PCBs) and Integrated Circuit (IC) packages. Thermal control of PCBs and IC packages is challenging in microelectronics because the power density increases when smaller and more complicated packages are designed. Temperature rise due to power dissipation, hotspot worsens harmful clock skew, jeopardizes reliability of products. To overcome these risks, PCBs and IC packages designers have to perform electromagnetic-thermal co-simulations at the early design stage. Usually the temperature rise of the whole package is easy to be calculated, it is difficult to detect the hotspots in the package due to local high current density because very high resolution simulations are needed. In this paper, an improved adaptive finite element method (FEM) is applied to detect hotspots. This method only requires one step adaptive refinements in every FEM solution for a given error threshold in the hotspot detection progress, so that it is very fast and uses much smaller computation resources. Test results show that the adaptive FEM only uses about 60 times memory and CPU time to detect all hotspots in the package comparing to the initial FEM solution.