The response of Ni-SiC powders, GDS deposited with various particle velocity and  their compaction behavior to the different packing densities were studied in parallel. Bulk compacts (90–99% dense), made in the form of 6 mm diameter by 3 mm thick disks, were analyzed to determine the structural changes occurring within the particles and at particle boundaries and to examine mechanical properties. Scanning electron microscopy observations revealed presence of laminar morphology and strong interparticle bonding in the composite coating. X-ray diffraction and transmission electron microscopy analysis revealed the retention of nanoscale structure and localized grain refinement. Adiabatic shear band areas were observed and thought to be responsible for the grain refinement. The powder layers shear compacted to the packing density (up to 90% dense) showed the best densification characteristics. Correspondingly, the best coating mechanical properties with strongest exchange coupling between hard and soft phases are obtained.