Fetch–Decode–Execute Cycle

In the decode stage, the CPU interprets the instruction that was fetched, determining what actions are required to complete it.

The CPU's control unit breaks down the instruction into parts, identifying the opcode (operation code) and the operands.

The opcode tells the CPU what operation to perform, while the operands provide any data or addresses required for that operation.

• As the name suggests it, a decoder circuit is used during the decode stage to direct the CPU to the right activity: it looks at the $n$ opcode bits, and directs the CPU to one of the $2^n$ possible computation/action types.

This breakdown helps the CPU understand exactly what needs to be done and prepares it for the execution stage.

Decoding is crucial because it translates the instruction into signals that the CPU's components can understand and act upon.