This study investigated the microstructural evolution and evaluated the thermo-mechanical reliability of a Sn-3.0Ag-0.5Cu (in wt.%) flip chip package during a thermal shock test. The reliability of the flip chip bonded packages was evaluated by means of the thermal shock in the temperature range of 233 K to 398 K. After 250 thermal shock cycles, cracks finally occurred at the corner solder bump joint on the chip side interfacial regions. In that, the crack initiated at the solder region near the intermetallic compound (IMC) layers. For the interpretation of the failure mechanism of the package, finite element analyses were conducted. From the finite element analysis or computational simulation result, the distribution of the plastic work in the corner solder bump was found to be most considerable. This means that the corner solder bump has the highest potential for first crack initiation and growth, because the thermo-mechanical failure of the solder joints is mainly caused by the accumulation of the plastic work. This matched well with the experimental results.