What is the Thumb instruction set and why is it used?

Thumb is a 16-bit instruction set encoding for ARM, providing improved code density (65-70% of ARM code size) with some performance trade-off. Thumb-2 (used in Cortex-M) combines 16-bit and 32-bit instructions for both density and performance. Benefits: Smaller program size (critical for flash-limited MCUs), Reduced memory bandwidth, Lower power consumption, and Better instruction cache utilization. Cortex-M processors use Thumb-2 exclusively. Interworking allows mixing ARM and Thumb code in Cortex-A processors for optimal balance of speed and size.