In conventional packaging, the finished wafer is cut up, or diced, into individual chips, which are then bonded and encapsulated. Wafer-level packaging (WLP), as its name implies, involves packaging the die while it is still on the wafer: protective layers may be bonded to the top and/or bottom of the wafer, then electrical connections are prepared and the wafer is diced into individual chips.

To provide a baking analogy, traditional packaging is similar to frosting individual cupcakes, while WLP is like frosting a whole cake and then slicing it into pieces. Because the sides are not coated with WLP, the resulting packaged chip is small in size (roughly the same size as the chip itself), an important consideration in footprint-sensitive devices such as our smartphones. Other advantages include streamlined manufacturing and the ability to test chip functionality before dicing.