The present study investigates the degradation mechanism of a methanesulfonic acid (MSA) based electroplating bath used for the electrodeposition of Sn–Ag alloy solder bumps, and its effects on the microstructure of the solder and on the collapse failure of flip-chip solder bumps. To examine the degradation behavior of the electroplating bath, a degraded electrolyte is prepared by accelerated aging treatment. In the presence of dissolved oxygen and Ag⁺ ions in the electrolyte, the chemical oxidation of Sn²⁺ ions to Sn⁴⁺ ions and the precipitation of SnO₂ nanoparticles with a diameter below 100 nm are promoted by the reduction of Ag⁺. Under cathodic bias, colloidal SnO₂ particles are adsorbed on the surface of the Sn–Ag solder bumps via electrophoresis, and incorporated into the layer by the electrodeposition layer of Sn–Ag. The presence of oxide layer mainly composed of SnO₂ on the surface of the bumps significantly reduces the friction coefficient of the solder surface by hardening the electrodeposits and deteriorates the solderability of the solder bumps, which leads to collapse failure during solder reflow.