In one embodiment, a dielectric material layer embedding metal structures is ablated from the chip-containing substrate by laser grooving, which is performed on dicing channels of the chip-containing substrate. Subsequently, an underfill layer is formed over the dielectric material layer in a pattern that excludes the peripheral areas of the chip-containing substrate. The physically exposed dicing channels at the periphery can be employed to align a blade to dice the chip-containing substrate. In another embodiment, an underfill layer is formed prior to any laser grooving. Mechanical cutting of the underfill layer from above dicing channels is followed by laser ablation of the dicing channels and subsequent mechanical cutting to dice a chip-containing substrate.