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Conversion and Inversion Circuitry
All UPSes include core circuitry that manipulates electricity, converting it from the AC power produced by your utility company to DC power stored in the battery, and back again for use by your equipment. The exact type, nature, size and quality of this circuitry depends on the type of UPS, and more specifically the make and model you have chosen. As with all things, the better the unit, the higher the quality of the components. And as with all things, quality is often correlated to price--but not always.
Most modern UPSes are microprocessor-controlled. There is actually a small computer embedded within the UPS itself that controls the key functions of the UPS. This includes detecting AC power failures, handling switching between power sources, monitoring the status of the battery, controlling the status indicators and so on. It is quite rare for anything untoward to happen to this circuitry. Usually if something does occur to these internal components, the UPS will need to be serviced or replaced. Most do not have any user-serviceable components within them other than the battery.