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In digital communications, a chip is a pulse of a direct-sequence spread spectrum (DSSS)

code, such as a pseudo-noise code sequence used in direct-sequence code division


multiple access (CDMA) channel access techniques.

In a binary direct-sequence system, each chip is typically a rectangular pulse of +1 or –1


amplitude, which is multiplied by a data sequence (similarly +1 or –1 representing the
message bits) and by a carrier waveform to make the transmitted signal. The chips are
therefore just the bit sequence out of the code generator; they are called chips to avoid
confusing them with message bits.[1]

The chip rate of a code is the number of pulses per second (chips per second) at which the
code is transmitted (or received). The chip rate is larger than the symbol rate, meaning
that one symbol is represented by multiple chips. The ratio is known as the spreading
factor (SF) or processing gain:

In digital communications, symbol rate (also known as baud or modulation rate) is the
number of symbol changes (waveform changes or signalling events) made to the
transmission medium per second using a digitally modulated signal or a line code. The
Symbol rate is measured in baud (Bd) or symbols/second. In the case of a line code, the
symbol rate is the pulse rate in pulses/second. Each symbol can represent or convey one
or several bits of data. The symbol rate is related to, but should not be confused with, the
gross bit rate expressed in bit/second.

CDMA uses a digital modulation called spread spectrum which spreads the voice data
over a very wide channel in pseudorandom fashion using a user or cell specific
pseudorandom code. The receiver undoes the randomization to collect the bits together
and produce the original data. As the codes are pseudorandom and selected in such a way
as to cause minimal interference to one another, multiple users can talk at the same time
and multiple cells can share the same frequency. This causes an added signal noise
forcing all users to use more power, which in exchange decreases cell range and battery
life.

OFDM uses bundling of multiple small frequency bands that are orthogonal to one
another to provide for separation of users. The users are multiplexed in the frequency
domain by allocating specific sub-bands to individual users. This is often enhanced by
also performing TDMA and changing the allocation periodically so that different users
get different sub-bands at different times.

In theory, CDMA, TDMA and FDMA have exactly the same spectral efficiency but
practically, each has its own challenges – power control in the case of CDMA, timing in
the case of TDMA, and frequency generation/filtering in the case of FDMA.
For a classic example for understanding the fundamental difference of TDMA and
CDMA imagine a cocktail party, where couples are talking to each other in a single
room. The room represents the available bandwidth:

TDMA: A speaker takes turns talking to a listener. The speaker talks for a short
time and then stops to let another couple talk. There is never more than one
speaker talking in the room, no one has to worry about two conversations mixing.
The drawback is that it limits the practical number of discussions in the room
(bandwidth wise).
CDMA: any speaker can talk at any time; however each uses a different language.
Each listener can only understand the language of their partner. As more and more
couples talk, the background noise (representing the noise floor) gets louder, but
because of the difference in languages, conversations do not mix. The drawback is
that at some point, one cannot talk any louder. After this if the noise still rises
(more people join the party/cell) the listener cannot make out what the talker is
talking about without coming closer to the talker. In effect, CDMA cell coverage
decreases as the number of active users increases. This is called cell breathing.