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The MAX232 is a chip that converts signals from your computers serial port to signals suitable for usage in our circuits. It uses electrolytic capacitors to store and pump up 5V to the +12 and -12V required by the RS232 serial communications protocol (that's what comes out of your PC or USB serial port adaptor).

It can be directly replaced with a similar chip, the MAX202, that uses smaller - cheaper - 0.1uF ceramic capacitors to do the same job.