With the rapid development of IC and photovoltaic industry, the requirements of larger-diameter, better productivity, higher machining accuracy and finer surface quality of silicon wafers challenge traditional wafer cutting technology. Therefore, in terms of increasing wafers’ diameter, lessening slicing thickness, reducing cutting loss and improving machining efficiency, research and application of precision cutting technology become necessary and urgent. The paper analyzes current well-developed technologies and equipments of free abrasive wire cutting in detail. It is recommended that bonded abrasive diamond wire cutting will be the development trend in the future as a highly-efficient, low material waste and environmentally friendly technology of precise cutting of silicon wafers. The paper also makes a discussion on construction, working principle, and manufacturing technology of bonded abrasive diamond wires.