Dicing of semiconductor wafers is an example of an application requiring a processing quality superior to what can be achieved using classical laser techniques. For this reason, sawing the wafers with a diamond-edged blade has been developed into a high-tech process, that guarantees good and reliable cuts for Silicon wafers of more than 300 microns thickness. Today, wafer thickness is getting thinner; down to 50 microns and also more brittle III-V compound semiconductors are used more frequently. On these thin wafers; the laser begins again to compete with the diamond saw, because of laser cutting-quality and cutting-speed, are increasing with decreasing wafer thickness. Conventional laser cutting however has the disadvantages of debris deposition on the wafer surface, weak chip fracture strength because of heat induced micro cracks. An elegant way to overcome these problems is to opt for the water-jet guided laser technology. In this technique the laser is conducted to the work piece by total internal reflection in a 'hair-thin' stable water-jet, comparable to an optical fiber. The water jet guided laser technique was developed originally in order to reduce the heat affected zone near the cut, but in fact the absence of beam divergence and the efficient melt xpulsion are also important advantages. In this presentation we will give an overview on today’s state of the art in dicing thin wafers, especially compound semiconductor wafers, using the water-jet guided laser technology.