Die chips can occur when a die starts to wear out and develops stress fractures. Basically, small portions of the steel die face chip off at the stress point. Dies chips can also occur due to a mechanical failure in the minting process but they are usually indistinguishable from fatigue chips which occur much more often. Some die designs have inherent weak points where die chips will continually develop. Look at the BIE wheat cents which were prevalent in the 50s but also occur with many other dates. A chip continually developed on dies between the B and E of LIBERTY, giving the "appearance" of an I between the letters. The complex plant designs of the Oklahoma and Arizona
State Quarters have also contributed to multiple die chips.
Taking it one step further, you can also develop die breaks and
Cuds. A die break forms from the expansion of a die crack and is usually quite noticeable without any magnification. Breaks are generally much larger than chips and they tend to be more collectible. As an example, a die crack will not be enough for a
VAM classification on a Morgan but many die breaks are listed as VAMs. A
Cud is a specific type of die break- one that affects the shank and face of a die. A
Cud will have the appearance of a large blob of "extra metal" at the rim of a coin extending across the field and a point of weakness on the opposite side of the coin. There is no actual extra metal involved though, the coin is formed between two die surfaces and when part of that surface is missing, the planchet flows to fill that void in the die and the weakness occurs because there is not complete opposing pressure on that part of the coin so it is not fully struck.
Cuds are very collectible and the larger they are, the more valuable they are.
Many times, die chips are called "
Cuds" but in reality, they are not the same thing at all. This confusion arises from a lack of knowledge and persistent misuse of nomenclature. Die chips are common,
Cuds have value.