Digital Micromirror Device
In DLP projectors, the image is created by microscopically small mirrors laid out in a matrix on a semiconductor chip, known as a Digital Micromirror Device (DMD). Each mirror represents one or more pixels in the projected image. The number of mirrors corresponds to the resolution of the projected image (often half as many mirrors as the advertised resolution due to wobulation). 800x600, 1024x768, 1280x720, and 1920x1080 (HDTV) matrices are some common DMD sizes. These mirrors can be repositioned rapidly to reflect light either through the lens or onto a heat sink (called a light dump in Barco terminology).
Rapidly toggling the mirror between these two orientations (essentially on and off) produces grayscales, controlled by the ratio of on-time to off-time.
Read more about this topic: Digital Light Processing
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