Minor overstress eventually results in component failure, but without pyrotechnic display or release of smoke.
The name is a running in-joke that started among electrical engineers and technicians, which was later adopted by programmers and computer scientists.
The jargon file, a compendium of historical and current hacker jargon, defines: magic smoke: n. A substance trapped inside IC packages that enables them to function (also called blue smoke; this is similar to the archaic phlogiston hypothesis about combustion).
When a device is powered on for the first time it is sometimes called a "smoke test", as any purely electrical defects would be revealed.
Red Hat Linux 6.1 included the following text in the hardware compatibility guide:[2] Tier 3 Incompatible and Unsupported CPUs The joke in the above quotation is the concept of a Smokeless CPU—one in which the vital magic smoke has been released, rendering it inoperable.