short for Surface Mounted Devices.
A technology for mounting electronical components onto printed circuit boards (PCBs).
In contrast to the conventional through-hole technology, where each component was attached to the board by sticking it's wires through a hole drilled into the board, and soldering it tight on the other side, SMD technology is "wireless".
Each component has a certain number of metal contact pads only, which are directly soldered to metal surfaces on the circuit board.
The fact that drilling holes is no longer necessary in order to mount the SMDs means that an entire production process can be omitted. This, together with the shorter mounting and soldering times, leads to a significant savings potential.
Other benefits of this technique are the improved temperature resistance of SMD components, the possibilty for a vastly increased package density on the printed circuit board (i.e. more components fit into the same area of the PCB), and easier mounting of components on both sides of the PCB.
One let-down of this technology is that mounting (and also removing) the components, requires special machinery (usually a fully automated process), therefore making it more difficult to use for hobbyists.