A Codec is an IC which digitally encodes or decodes data or signals. During the coding process, the analog signals are not digitalized loss-free; rather, a dynamic reduction of the analog signal takes place, and a data compression of the digital signal. This means that the memory capacity needed, and the band width for the transfer, can be reduced.
The majority of modern Codecs are already highly-integrated, as well as providing a whole range of additional functions. For example, a digital volume adjustment, outputs for headphones, normal loudspeakers, and special loudspeakers too, are in most cases integrated. In most cases, too, several channels are combined in one module, which means that a great deal of space can be saved on the PCB. The resolution of the ADC/DAC can be configured in very different ways, too, depending on the particular application. In the audio sector, for example, very high resolution is used. For speech alone function, this is not necessary, and very economically priced ICs can be produced.