THE USER DEMANDS THAT THE MODERN CUTTING TOOL MATERIALS SHOULD LEAD TO A PRODUCT WITH AN OPTIMAL SURFACE FINISH COUPLED WITH A LONG TOOL LIFE. THESE DEMANDS HAVE BEEN TAKEN INTO CONSIDERATION IN THE DEVELOPMENT OF NEW POLYCRYSTALLINE DIAMOND AND CEMENTED CARBIDE TIPPED TOOLS FOR DIFFERENT APPLICATIONS. NEWLY DEVELOPED SUBMICRON CEMENTED CARBIDES HAVE SHOWN IMPROVEMENTS IN TOOL LIFE OF 70-100%. ON THE OTHER HAND, LIFE OF THE PCD-TIPPED TOOLS COULD BE ABOUT 50 TO 300 TIMES THAT OF THE CEMENTED CARBIDE TOOLS. SINCE THE TOTAL COST OF THE PCD-TOOLS IS, HOWEVER, ABOUT 50 TO 80 TIMES THAT OF THE COMPARABLE CEMENTED CARBIDE TOOLS, ALL ECONOMIC FACTORS THAT AFFECT PRODUCTION COSTS ALSO HAVE TO BE CONSIDERED. IT IS SHOWN THAT TOTAL COST SAVINGS OF 60-80% CAN BE ACHIEVED IF PCD-TOOLS CAN BE USED IN PLACE OF CEMENTED CARBIDE TOOLS.