This study investigated changes in electrical and mechanical properties, as well as the highhumidity reliability of 18 m-diameter silver alloy wires with palladium contents of 1.1, 2.5, 3.0, and 4.0 wt%,for semiconductor packaging. We also compared the formation of Free Air Ball (FAB) and the high humidityreliability of joints in a reducing atmosphere with 4N (99.99%) gold wire of the same diameter. The wireresistance and hardness values were measured using a 4-point probe and a micro-hardness tester. The FABformed in atmospheric and reducing atmospheres, as well as the high humidity reliability after bonding, wereanalyzed using field emission scanning electron microscopy, energy dispersive spectrometry, and a mechanicalstrength analyzer. As the palladium content increased in the silver alloy wire, the electrical resistanceincreased, showing a similar level to gold wire up to 2.5 wt%, after which it exhibited a further increase. Thehardness values also increased sharply, but the rate of increase slowed down after 2.5 wt%. FAB exhibitedexcellent sphericity across the entire range of palladium content. After bonding, a uniform distribution ofpalladium was observed at the joint interface. The high humidity reliability showed improvement withincreasing palladium content. Palladium 1.1 wt% exhibited differences compared to 2.5 and 3.0 wt%, andfurther improvement was observed with an increase to 4.0 wt%. This is attributed to the incorporation ofpalladium into the vulnerable Ag3Al intermetallic compound, resulting in the formation of a corrosionresistant (AgPd)3Al phase. As a result, micro-diameter silver alloy wires with a diameter of 18 m or lessdemonstrated stable FAB formation, bonding processes, and properties that make them candidates to replaceconventional gold wires, particularly under conditions with palladium content exceeding 2.5 wt%.