Electrically conductive zirconia tungsten carbide composites are attractive materials for manufacturing precision components by electrical discharge machining due to their high strength, toughness and electrical conductivity. In this study, nanocomposite ceramics with a ytterbia samaria co-stabilized zirconia 1.5Yb-1.5Sm-TZP matrix and 24–32 vol.% tungsten carbide dispersion were manufactured by spark plasma sintering (SPS) at 1400 °C for 15 min at 60 MPa pressure. The materials exhibited high strengths of 1300–1600 MPa, a moderate fracture resistance of 6 MPa√m and an ultrafine microstructure with grain sizes in the 150 nm range. Scanning electron microscopy and RAMAN spectroscopy revealed the in situ formation of carbon during the SPS process and carbon formation scales with tungsten carbide content, and this apparently impedes bending strength.