Difference between HMC Upgrade & Update

It’s important to distinguish between updating and upgrading a system. The terms are not synonymous. 

Upgrade
To upgrade is to bring the system to a higher version or release of HMC code. When the HMC’s version number is incremented, such as going from Version 6 to Version 7, the upgrade method must be used in order to apply the new version of HMC code.

Update (Corrective Service)
In between HMC releases, or between upgrades, there will be times when interim fixes or cumulative service packs need to be applied. Interim fixes consist of security fixes or fixes that are considered critical to be released immediately to customers. Service packs are generally larger in contents. Both can be installed on the HMC by using the Install Corrective Service task under HMC Code Update, or by using the updhmc command on the HMC.