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Transformers play an important role in power transmission because they allow power to be converted to and from higher voltages. This is important because higher voltages suffer less power loss during transmission. This is because higher voltages allow for lower current to deliver the same amount of power as power is the product of the two. Thus, as the voltage steps up, the current steps down. It is the current flowing through the components that result in both the losses and the subsequent heating.

The choice of modulation affects the cost and performance of a system and these two factors must be balanced carefully by the engineer. Once the transmission characteristics of a system are determined, telecommunication engineers design the transmitters and receivers needed for such systems. These two are sometimes combined to form a two-way communication device known as a transceiver. A key consideration in the design of transmitters is their power consumption as this is closely related to their signal strength.

With the rise of integrated circuits, reducing the absolute number of chips used represented another way to save costs. The goal of a designer is not just to make the simplest circuit, but to keep the component count down. Sometimes this results in slightly more complicated designs with respect to the underlying digital logic but nevertheless reduces the number of components, board size, and even power consumption. For example, in some logic families, NAND gates are the simplest digital gate to build.

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