This paper presents the results of a systematic investigation of the thermodynamic ("simulated annealing") method applied to the placement of rectangular blocks on a chip. A new presentation of the fundamental ideas underlying this technique is proposed. It is shown that the analogies with physics, which have been at the origin of the method, may be partially forgotten, but that they are still useful to understand some results. Several simple examples are investigated, and the influence of various parameters is studied. Typical complex industrial applications are subsequently presented. Finally, an interactive implementation of the thermodynamic optimization algorithm, based on the results of the present investigation, is proposed.