Silver nanoparticles were efficiently synthesized by large-area arc discharge in liquid and were found to be effective as bonding materials in power microelectronic packaging. The results showed that the production rate of silver nanoparticles depended on the heat input during processing and reached the maximum value of 350 mg/min at current 104 A, which was much higher than any previously reported productivity by the arc discharge method. The silver nanoparticles were characterized in terms of their microstructure, morphology, particle size, and distribution. Two Gaussian peaks were found in the nanoparticle size distribution curve, which were 33 and 220 nm, respectively. This mixed-size nanoparticle paste was naturally economical and effective for the packaging application due to the combination of the high surface energy of small nanoparticles and the efficient joint filling of the large nanoparticles. The cross-section microstructure and fracture surface of bonded joints indicated that atomic bonds formed between the sintered layer and the substrates. Additionally, the mechanism of arc discharge for synthesizing the silver nanoparticles was discussed.