Refers to a set, usually a pair, of microprocessors that are present on the motherboard, and which controls the communication between every component of the system - the CPU, the RAM, the expansion cards, and other peripherals plugged into the system.
The CPU has garnered all the attention among computer users, but the system's performance is just as much determined by the much-ignored Chipset. The Chipset usually comprises the Northbridge and the Southbridge. The names are derived from the relative position of the microprocessors with respect to the CPU. The chip closer to the CPU is called the Northbridge, and the one placed further away is referred to as the Southbridge. The Northbridge has traditionally controlled the communication of the CPU with the rest of the system, namely the memory, the graphics subsystem (either onboard graphics or the graphic card(s)), and the Southbridge. The Southbridge is traditionally involved with controlling the communication between the Northbridge and the peripherals, namely expansion cards not plugged into the graphics slot like the sound card and internal modem, storage devices like the hard disks and optical drives, and the ports - COM, USB, etc.
Exceptions to the traditional roles exist in the form of the chipsets for the AMD Athlon 64 series of processors, since the RAM controller has been included in the CPU itself; the Northbridge is no longer burdened with this task.