The second type of sensor found of crank and camshafts known as a Hall Effect (this includes optical sensors) sensor. This style of sensor has a transistor and some electronics built into the sensor itself and will generally require a power supply and ground of some sort. For this reason a hall effect sensor usually has at least 3 wires. The output of this style of sensor is a digital square wave.

Because the output from a hall effect sensor is already in digital form, the ECU does not need to do any signal conditioning to be able to use it.

When given the option, a hall effect sensor is always the best option to put on an engine and it reduces the amount of work required of the ECU.

In applications where either direct fire ignition or sequential fuel injection is required, the ECU must have a way of determining where it is in the firing order at any point in time and which cylinders are on compression and which are on exhaust. The only way of determining this is to use a sensor connected to the camshaft that sends a signal to the ECU when the engine is approaching cylinder 1 TDC on the compression stroke.