High efficiency and high automation are essential in the process of metal cutting. How to control the chip will affect processing quality, cutting tool life and productivity greatly. With the development of image processing technology, machine vision has been widely used in real-time monitoring of chip shape. A set of machine vision detection system is developed for realizing image capture, image processing, image pattern matching and image analysis in real time in this paper. Especially, dynamic template is designed to match the complex chip. In this system, LabVIEW is used as system platform, QP 300 picture capture card of Daheng-Image cooperation is used as image capture hardware, LED of CCS cooperation is used as light source. The actual operation shows that this system can identify typical C shape chip and spiral shape chip. Meanwhile, other functions are developed, such as parameter optimization and network transmission.