Conventionally, reliability prediction of electronic components is carried out using standard handbooks such as MIL STD 217 plus, Telcordia, etc. But these methods fail to provide a realistic estimate of reliability for upcoming technologies. Currently, electronic reliability prediction is moving towards applying the Physics of Failure approach which considers information on process, technology, fabrication techniques, materials used, etc. Industries employ different technologies like CMOS, BJT and BICMOS for various applications. The possibility of chance of failure at interdependencies of materials, processes, and characteristics under operating conditions is the major concern which affects the performance of the devices. They are characterized by several failure mechanisms at various stages such as wafer level, interconnection, etc. For this, the dominant failure mechanisms and stress parameters needs to be identified. Optocouplers are used in input protection of several instrumentation systems providing safety under over-stress conditions. Hence, there is a need to study the reliability and safety aspects of optocouplers. Design of experiments is an efficient and prominent methodology for finding the reliability of the item, as the experiment provides a proof for the hypothesis under consideration. One of the important techniques involved is Taguchi method which is employed for finding the prominent failure mechanisms in semiconductor devices. By physics of failure approach, the factors that are affecting the performance on both environmental and electrical parameters with stress levels for optocouplers are identified. By constructing a 2-stage Taguchi array with these parameters where output parameters decides the effect of top two dominant failure mechanisms and their extent of chance of failure can be predicted. This analysis helps us in making the appropriate modifications considering both the failure mechanisms for the reliability growth of these devices. This paper highlights the application of design of experiments for finding the dominant failure mechanisms towards using physics of failure approach in electronic reliability prediction of optocouplers for application of instrumentation