How to manage more than 32k threads

The problem is that I will need around 500K threads for this task. And I run into a [memory error].

Sounds to me that you should be using a thread-pool so you can submit a large number of jobs but only run them in a smaller number of threads.

// create a thread pool with 10 threads, this can be optimized to your hardware
ExecutorService threadPool = Executors.newFixedThreadPool(10);
// submit your handlers to the thread-pool
for (PCHandler handler : handlersToDo) {
    threadPool.submit(handler);
}
// once we have submitted all jobs to the thread pool, it should be shutdown
threadPool.shutdown();
...

If this won't work then I'd like to know more details about a system that actually needs 500k concurrently running threads. You may be able to achieve this with some memory setting tweaking and increasing the core memory on your box but I suspect that re-architecting your application is in order.

As @Peter mentions in comments, to optimize the number of threads in the pool you can get the number of available processors and other system specs to figure this out. But it depends highly on how CPU intensive your PCHandler class is. The more IO it does, the more concurrency can be taken advantage of. Probably doings some test runs with different values passed to the newFixedThreadPool(...) method is in order to determine the optimal setting there.

Also, depending on how large the 500k job objects are, you may want to limit their creation. To do that, you could create a thread-pool with a bounded queue which would limit the number of jobs that can be outstanding at any one point in time.