Liquid crystal method is one of the techniques for failure analysis. This technique is well known way to identify a failure point on a silicon integrated circuit. However, the tendency of LSI devices in recent years towards smaller feature size, higher density, lower electric power and larger chip size has created a demand for improvement of this technique towards higher accuracy and increased reliability of failure point localization. In this case, we developed a new technique for applying the liquid crystal method. With this technique, we improved four aspects of the analysis: *Automatjc adjustment of the temperature towards the transference point of the liquid crystal by image processing *Automatjc display of the "hot spot" by image processing *Automatic oscillation of the applied voltage for enhanced visibility of the current leakage point *Mjnute control of the temperature from the reverse side of the package using a Peltier element As a result of this improvement, we could realize improved accuracy for the liquid crystal analysis and reliability of failure point localization. This thesis reports how this technique can be established as a working technique for routine failure analysis, with a practical detection sensitivity of about 1.tW.This method should be called LCIP (Liquid Crystal with Image Processing method).