Cathodic Arc Deposition (CAD) is a widely used industrial-scale process for applying high quality thin film coatings. CAD is characterized by relatively high-energy deposition ions and a nearly 100% ionized deposition plasma. The process is based on low-voltage (~25 V), high current (~100 A) cathodic arc physics that produce a dense, highly ionized plasma. CAD works using specially designed deposition heads. A voltage is applied by means of a power supply producing an arc discharge between an anode and cathode. Under vacuum conditions, the arc current is concentrated over a small surface area on the cathode producing an extremely high current density (~ 1012 A/m2) at what are generally called "cathode spots". This high current density is associated with an extremely high power density (~ 1013 W/m2) that produces a localized phase transformation of the solid target (the cathode material) to a nearly fully ionized deposition plasma. The plasma expands rapidly into the ambient vacuum towards the substrate where deposition takes place. The ion velocities of the deposition plasma have kinetic energies of about 20 eV for light elements and 200 eV for heavy elements. This is compared to sputter for example where the add-atom energy is a few eV at most. CAD can be operated in either DC or pulsed modes. Both approaches produce the same energetic, highly ionized plasma and have similar coating properties.

There are a number of advantages to the higher deposition ion energies. For example, CAD films tend to be denser and have better adhesion characteristics than films produced using other methods. The deposited atoms penetrate the surface, locking the coating to the surface. In addition to better adhesion, the energetic ions allow high-quality coatings to be deposited at lower substrate temperatures compared to other processes. This is the case because the CAD ions carry sufficient energy to form dense, compact films without the need for additional thermal energy to be provided by the substrate.

The high ionization fraction allows the deposition material to be controlled. For example by biasing the substrate, the impact energy of the ions on the substrate can be increased. The plasma stream can also be rastered using magnetic fields, which allows the deposition material to be moved about the surface, averaging the coating without moving the substrate.

For reactive deposition, CAD allows chemically accurate films to be produced over a wide range of gas pressures. This eases the necessity for precise pressure control, which increase yield and reduces reworks, reducing the cost of the coating. By contrast, in reactive sputtering, uniformity problems are often encountered because the sputter rate is influenced by the presence and distribution of oxides formed on the target by oxygen impinging on its surface. This is a common problem with sputtering and is known as target poisoning. Because of the energy associated with CAD processes, target poisoning does not occur as easily and more uniform films with fewer production problems are produced.

The CAD process produces so called "macro particles" or droplets along with the deposition plasma. Macro particles range in size from less than a micrometer to about 10 micrometers in diameter. For many coating applications (tool coatings for example) the macro particles are not detrimental and no measures are taken to eliminate them. However, for some applications (optical coatings is an example) the macros degrade the coating sufficiently that they must be removed. This is generally accomplished using 90 degree magnetic filters that guide the deposition plasma away from the straight line trajectories of the macros. Using a filter, over 99% of macros are removed, producing high-quality, particle-free coatings.