Abstract: An algorithm based on the fuzzy set theory for the placement of chips on multi-chips modules (MCM) substrate is presented. In this algorithm, any chip in MCM is suffered three apparent forces:the repulsive force between chips, the attractive force between substrate boundaries and chip, and the attractive force between substrate and substrate center. The fuzzy relationships between the forces and the placement of chips are analyzed by the fuzzy inference rules. After defuzzification by the height method, the optimal placement of chips is obtained, in which the resulting apparent force is minimized. Finally, the validity of the algorithm is verified by FEM. Furthermore, the results from the fuzzy thermal placement algorithm are compared with those from the quadrisection placement method. It shows that the chip placement obtained by the fuzzy thermal placement algorithm is more reasonable and robust than that by the quadrisection placement method.