This word can be used in more than one way if it is referred to while cutting it is a Swarf cutting operation check out some 5 axis tool paths they use swarf cutting operations
The most common use of it is the chips that are cut off the part when milling Drilling or turning Etc. are called swarf so Chips and Swarf are interchangeable both are the same thing
In the Photo of the Mill there are a lot of chips or Swarf around the machine
Here is a video on Swarf cutting