Junction temperature is the highest temperature of the actual semiconductor

Semiconductor

A semiconductor is a material with electrical conductivity due to electron flow intermediate in magnitude between that of a conductor and an insulator. This means a conductivity roughly in the range of 103 to 10−8 siemens per centimeter...

 in an electronic device. In operation it is higher than case temperature and the temperature of the part's exterior. The difference is equal to the amount of heat transferred from the junction to case multiplied by the junction-to-case thermal resistance.

Maximum junction temperature is specified in a part's datasheet and is used when calculating the necessary case-to-ambient thermal resistance for a given power dissipation. This in turn is used to select an appropriate heat sink

Heat sink

A heat sink is a term for a component or assembly that transfers heat generated within a solid material to a fluid medium, such as air or a liquid. Examples of heat sinks are the heat exchangers used in refrigeration and air conditioning systems and the radiator in a car...

if necessary.

An estimation of the chip-junction temperature, T_J, can be obtained from the following equation:
T_J = T_A + ( R _θJA × P_D )

where:
T_A = ambient temperature for the package ( °C )

R _θJA = junction to ambient thermal resistance ( °C / W )

P_D = power dissipation in package (W)