导 (lead, conduct) + 电 (electricity) — to 'lead/guide' electricity through a material. Same 导 appears in 导师 (mentor, one who guides), 导航 (navigation, guiding the way), and 导演 (director, who guides the production).
grammar
Used both as a verb (铜导电 'copper conducts electricity') and as a modifier (导电材料 'conductive material', 导电性 'conductivity').
