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Near the sata port of an embedded system, I noticed 10nF 16V X7R 10% 0402s in line with the data pins. What is their function?

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Many high-speed serial communication standards use DC blocking caps to, well, block DC. SATA does this, as does PCI-Express.

The serial data stream is encoded in such a way that it is "DC balanced", meaning that there is an equal number of "zeros" as there are "ones". This is required so that the DC blocking cap doesn't do bad things to the signal.

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Interesting related links: SATA Physical Layer, and 8b/10b encoding (The encoding scheme used by SATA to achieve DC balance. – Connor Wolf Apr 8 '12 at 5:37

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