Die cutting

During the die cutting or dicing process, a wafer with sometimes thousands of identical integrated circuits is cut into individual pieces, called dies. In between the functional parts of the circuits, a thin non-functional spacing is foreseen where a saw can safely cut the wafer without damaging the circuit. This spacing is called the scribe. The width of the scribe is very small, typically around 100 μm. A very thin and accurate saw is therefore needed to cut the wafer into pieces. Usually the dicing is performed with a water-cooled circular saw with diamond tipped blades.

Die cutting is used for all kinds of manufacturing processes that have nothing to do with chips. Leather, fabrics, rubber, etc. are cut to patterns this way. Here is a good description: http://www.dieco.com/whatis.htm