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Power dissipation occurs when electrical energy is converted into heat due to the resistance present in a circuit. When current flows through a resistor, some energy is lost as heat due to collisions between charge carriers and atoms in the material, described by Joule's law. This phenomenon is critical in electronic components, where excessive power dissipation can lead to overheating and potential failure. Proper thermal management is essential to mitigate these effects and ensure the reliability of electronic devices.

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