Alignment error of the BGA lithography equipment is mainly caused by the dimensional change of the BGA panel which is generated during the manufacturing processes. To minimize the alignment error, ‘mark alignment’ algorithm in place of ‘center alignment’ algorithm was proposed and the optimal solution for the algorithm was derived by simple analytic form. The developed algorithm distributes evenly the alignment error over the whole panel which was evaluated by the numerical simulation. Finally, the developed algorithm was implemented to the controller of the lithography equipment and the alignment error was measured at the fiducial mark location. From the measurement, it is also concluded that the developed alignment algorithm be effective to reduce the maximum value of alignment error.