Three dimensional thermo-electrical analysis was employed to simulate the current density and temperature distributions for eutectic SnAg solder bumps with shrinkage bump sizes. It was found that the current crowding effects in the solder were reduced significantly for smaller solder joints. Hot-spot temperatures and thermal gradient were increased upon reducing the solder. The maximum temperature for solder joint with 144.7 μm bump height is 103.15 °C which is only 3.15 °C higher than the substrate temperature due to Joule heating effect. However, upon reducing the bump height to 28.9 μm, the maximum temperature in the solder increased to 181.26 °C. Serious Joule heating effect was found when the solder joints shrink. The higher Joule heating effect in smaller solder joints may be attributed to two reasons, first the increase in resistance of the Al trace, which is the main heating source. Second, the average and local current densities increased in smaller bumps, causing higher temperature increase in the smaller solder bumps.