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Power and power density increase in microelectronics is a major challenge for packaging high performance ASIC and microprocessor devices. The thermal interface material (TIM) used between the chip and the heat spreader of the Flip Chip Plastic Ball Grid Array (FC-PBGA) package plays a very important role in the package thermal performance. Not only does it affect package thermal performance, it can also affect assembly yield and package reliability during manufacturing and normal operation. In this study attention has been focused on improving thermal performance, manufacturing yield and reliability of the flip-chip PBGA single chip packages and the System in Package (SiP) modules. Computational Fluid Dynamics (CFD) software was used to investigate the effect of TIM on FC-PBGA thermal performance. The effect of thermal interface material was then studied for controlling the interaction between the heat spreader and the FC-PBGA SiP module to reduce module warpage and to improve module assembly yield. Qualification of TIM for FC-PBGA at both the component level and the system level was discussed. Component level testing data showed that the thermal characteristics and mechanical integrity of the TIM selected can be evaluated by using the same stress conditions used in package reliability qualification. Finally, system level non- operational humidity test results showed that good mechanical reliability at the thermal interface of the FC-PBGA can be achieved by optimizing the heat spreader attaching process.