In this paper, a 3-D finite-element (FE) model was established based on real test samples. Coupled electrothermal and thermal-mechanical FE analyses were conducted to analyze the mechanical behavior of bonding wire under cyclic power loading. The current crowding phenomenon may be improved by increasing the wire number. The junction temperature can be decreased by decreasing the joule heat from the current crowding around the bonding wire. The findings suggest that the power module with wire configuration design shall be operated in a higher power load; meanwhile, the identical reliability can be guaranteed. The temperature predicted by the simulation was consistent with the experimental data. Incremental equivalent plastic strain was not observed when the current loading was low. However, the plastic ratio progressively enhanced with the current load. With a high current load, the yielding effect should be considered. Plastic strain dominated the failure mechanism. The concepts of high-and low-cycle fatigue should be incorporated into the life prediction model for modules subjected to low and high current loadings, respectively. After the simulation results were validated with the experimental data, two models for the design of power modules were proposed.