They are used to read the signal from an analog sensor like a temperature sensor and convert it into a digital value so that the system understands.

It looks like you're describing the function of an Analog-to-Digital Converter (ADC). An ADC is a crucial component in many electronic systems, especially those that interface with analog sensors. Here's a breakdown of how it works:

1. Signal Reception: The ADC receives an analog signal (for example, from a temperature sensor) that can vary continuously over time.

2. Sampling: It samples the analog signal at specific intervals. The sampling rate is critical; it must be high enough to capture the necessary variations in the signal.

3. Quantization: Each sampled value is then quantized, which means it is assigned a discrete digital value. This involves dividing the continuous range of the analog signal into a finite number of levels.

4. Encoding: The quantized values are converted into a binary format, which can be processed by digital systems. For example, if the ADC has a resolution of 12 bits, it can represent the analog signal in $2^{12} = 4096$ discrete levels.

5. Output: Finally, the digital representation of the signal is sent to a microcontroller or other processing units, enabling the system to understand and react to the sensor’s readings.

Understanding this process is essential in numerous applications, including monitoring, data acquisition, and automation systems.