With the arrival of flip-chip packaging, present tools and techniques are having increasing difficulty meeting failure-analysis needs. Recently a magneticfield imaging system has been used to localize shorts in buried layers of both packages and dies. Until now, these shorts have been powered directly through simple connections at the package. Power shorts are examples of direct shorts that can be powered through connections to Vdd and Vss at the package level. While power shorts are common types of failure, equally important are defects such as logic shorts, which cannot be powered through simple package connections. These defects must be indirectly activated by driving the part through a set of vectors. This makes the magnetic-field imaging process more complicated due to the large background currents present along with the defect current. Magnetic-field imaging is made possible through the use of a SQUID (Superconducting Quantum Interference Device), which is a very sensitive magnetic sensor that can image magnetic fields generated by magnetic materials or currents (such as those in an integrated circuit). The current-density distribution in the sample can then be calculated from the magnetic-field image revealing the locations of shorts and other current anomalies. Presented here is the application of a SQUID-based magnetic-field imaging system for isolation of indirect shorts. This system has been used to investigate shorts in two flip-chip-packaged SRAMs. Defect currents as small as 38 μA were imaged in a background of 1 A. The measurements were made using a lock-in thechnique and image subtraction. The magnetic-field image from one sample is compared with the results from a corresponding infrared-microscope image.