In this paper, two ideal formation models of serrated chips, the symmetric formation model and the unilateral right-angle formation model, have been established for the first time. Based on the ideal models and related adiabatic shear theory of serrated chip formation, the theoretical relationship among average tooth pitch, average tooth height and chip thickness are obtained. Further, the theoretical relation of the passivation coefficient of chip’s sawtooth and the chip thickness compression ratio is deduced as well. The comparison between these theoretical prediction curves and experimental data shows good agreement, which well validates the robustness of the ideal chip formation models and the correctness of the theoretical deducing analysis. The proposed ideal models may have provided a simple but effective theoretical basis for succeeding research on serrated chip morphology. Finally, the influences of most principal cutting factors on serrated chip formation are discussed on the basis of a series of finite element simulation results for practical advices of controlling serrated chips in engineering application.