What's the damage incurred by the chip on this photo?
Thermal damage. Part of chip, mostly metal, overheated, melted and evaporated, after some pressure build up it exploded. Cause is shorting. Cause of shorting can be anything, from manufacturing defect, to ESD, extraterrestrial particle, overvoltage, mechanical stress, bad design, or even software.

The chip itself is not visible on picture. What fell off is only the mold/casing material.