SACD audio is stored in DSD, which differs from the conventional PCM used by the compact disc or conventional computer audio systems.
A DSD recorder uses delta-sigma modulation. DSD is 1-bit with a 2.8224 MHz sampling rate. The output from a DSD recorder is a bitstream. The long-term average of this signal is proportional to the original signal. DSD uses noise shaping techniques to push quantization noise up to inaudible ultrasonic frequencies. In principle, the retention of the bitstream in DSD lets the SACD player use a basic (one-bit) DAC design with a low-order analog filter. The SACD format can deliver a dynamic range of 120 dB from 20 Hz to 20 kHz and an extended frequency response up to 100 kHz—though most current players list an upper limit of 80–90 kHz.
Most professional audiologists accept that the upper limit of human adult hearing is 20 kHz[23] and that high frequencies are the first to be affected by hearing loss.
The process of creating a DSD signal is conceptually similar to taking a one-bit delta-sigma analog-to-digital (A/D) converter and removing the decimator, which converts the 1-bit bitstream into multi-bit PCM. Instead, the 1-bit signal is recorded directly and, in theory, only requires a lowpass filter to reconstruct the original analog waveform. In reality it is a little more complex, and the analogy is incomplete in that 1-bit sigma-delta converters are these days rather unusual, one reason being that a one-bit signal cannot be dithered properly: most modern sigma-delta converters are multi-bit.
Because of the nature of sigma-delta converters, one cannot make a direct comparison between DSD and PCM. An approximation is possible, though, and would place DSD in some aspects comparable to a PCM format that has a bit depth of 24 bits and a sampling frequency of 88200 Hz.
Because it has been extremely difficult to carry out DSP operations (for example performing EQ, balance, panning and other changes in the digital domain) in a one-bit environment, and because of the prevalence of solely PCM studio equipment such as Pro Tools, the vast majority of SACDs—especially rock and contemporary music, which rely on multitrack techniques—are in fact mixed in PCM (or mixed analog and recorded on PCM recorders) and then converted to DSD for SACD mastering.