A new design of contact detection algorithm is proposed for the z-axis of a wire bonder that interconnects between pads and leads in semiconductor manufacturing processes. Fast and stable contact detection of the z-axis is extremely important fer maintaining proper quality in the fine pitch gold wire bonding process, which has a small pad size of below 70um. The new method is based on a statistical approach and designed for the discrete Kalman filter. Real wire bonding experimental results are presented to demonstrate the advantages of the proposed algorithm.