From ArchWiki

[edit] Introduction

During a package upgrade pacman may create a file with a .pacnew extension rather than overwrite the existing file in the filesystem.

[edit] Explanation

Pacman uses md5sum hashes to compare the versions of the files in the original package, the file on the filesystem and the file in the new package. If the file on the filesystem has been modified from the original package, pacman cannot know how to incorporate those changes into the new version of the file. Therefore instead of overwriting the modified file when upgrading, pacman saves the new version with a .pacnew extension and leaves the modified version on the filesystem untouched. The .pacnew file and the modified file can then be merged manually.