In semiconductor manufacturing, defect detection and localization are critical to ensuring product quality and yield. While X-ray imaging is a reliable non-destructive testing method, it is memory-intensive and time-consuming for large-scale scanning, Magnetic Field Imaging (MFI) offers a more efficient means to localize regions of interest (ROI) for targeted X-ray scanning. However, the limited availability of MFI datasets due to proprietary concerns presents a significant bottleneck for training machine learning (ML) models using MFI. To address this challenge, we consider an ML-driven approach leveraging diffusion models with two physical constraints. We propose Physics Informed Generative Models for Magnetic Field Images (PI-GenMFI) to generate synthetic MFI samples by integrating specific physical information. We generate MFI images for the most common defect types: power shorts. These synthetic images will serve as training data for ML algorithms designed to localize defect areas efficiently. To evaluate generated MFIs, we compare our model to SOTA generative models from both variational autoencoder (VAE) and diffusion methods. We present a domain expert evaluation to assess the generated samples. In addition, we present qualitative and quantitative evaluation using various metrics used for image generation and signal processing, showing promising results to optimize the defect localization process.