Abstract: A self-aligning method and apparatus for magnetically transferring semiconductor chips to corresponding fingers of a conductive lead frame for bonding thereto. A chip having a plurality of soft ferromagnetic integral leads on one face thereof is positioned face up, below overlying soft ferromagnetic fingers of the lead frame. A magnetic field is applied generally perpendicular to the underside of the chip and the fingers to produce lead-finger engagement. While producing this engagement, the chip is concurrently automatically oriented by the magnetic field to precisely align chip leads with corresponding lead frame fingers. In a preferred embodiment, a semiconductor flip chip having soft ferromagnetic contact bumps is placed face up on a tip of a soft iron probe extending from an electromagnet. The probe raises to position the chip into close proximity with the overlying lead frame fingers.