Could you help me to understand the following figure? What does modulator output mean?
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The modulator output is described in the section above this figure, but essentially the output of the modulator is a 1's and 0's bitstream, being output at the same frequency as the clock. The 1's and 0's density is dependent on the magnitude of the input signal. As you can see in the figure, when the input is near positive full-scale (+250mV) the modulator outputs a greater density of 1's compared to 0's. When the input is near negative full-scale (-250mV) the modulator outputs a greater density of 0's compared to 1's. This output bit stream is fed to a sigma delta filter module, which then decimates these 1's and 0's into output codes, as a sigma delta ADC does.
If you haven't seen it yet, this video may help: https://training.ti.com/ti-precision-labs-isolation-introduction-isolated-modulators