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The purpose of this research is to demonstrate surface roughness and chip formation by the machining of Aluminium silicon alloy (AlSic) matrix composite, reinforced with aluminium nitride (AlN), with three types of carbide inserts present. Experiments were conducted at various cutting speeds, feed rates, and depths of cut, according to the Taguchi method, using a standard orthogonal array L9 (3 4). The effects of cutting speeds, feed rates, depths of cut, and types of tool on surface roughness during the milling operation were evaluated using Taguchi optimization methodology, using the signal-to-noise (S/N) ratio. The surface finish produced is very important in determining whether the quality of the machined part is within specification and permissible tolerance limits. It is understood that chip formation is a fundamental element that influences tool performance. The analysis of chip formation was done using a Sometech SV-35 video microscope. The analysis of results, using the S/N ratio, concluded that a combination of low feed rate, low depth of cut, medium cutting speed, and an uncoated tool, gave a remarkable surface finish. The chips formed from the experiment varied from semi–continuous t