Herein, a palladium-coated copper wire was prepared using a halogen-free direct coating process, and the effects of the coating temperature on the morphology of the palladium coating and the mechanical properties of the wire were studied. The structural characteristics of the coating and copper matrix as well as the diffusion, reaction, and bonding characteristics of the elements at the copper–palladium interface were investigated. Results show that the deposition rate of palladium and the aggregation of palladium grains were accelerated with increasing coating temperature, promoting the formation of large palladium particles on the surface of the palladium-coated copper wire. The strength of the coated wire decreases and the elongation increases with increasing coating temperature. At 400 °C, the thickness of the coating was approximately 51 nm coating, consisting of approximately 4 nm nanocrystals. The improvement in plasticity was attributed to the distortionless recrystallized subgrain nucleus formed by the cell structure comprising dislocation tangles in the copper matrix, which reduces the matrix dislocation density. Positive and negative edge dislocations were present in the coating, and the two dislocation lines of the edge dislocation dipole offset each other. Numerous crystal defects were found in the copper–palladium bonding interface zone. Moreover, copper unidirectionally diffuses into the palladium coating, forming the intermetallic-compound CuPd in the interface bonding zone. Furthermore, the formation of twins was caused by the change in the stacking order of atoms due to the stacking fault occurring on the crystal surface, and the thickness of the diffusion zone was approximately 9 nm.
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