The Digital to Analog conversion process involves managing a lot of data in a short period of time. The density of data increases with resolution and part of the process requires decoding various data formats. Manufacturers use more powerful chips in improved circuits with better designed layouts and power supplies. Some manufacturers implement their own chip designs in architecturally configurable programable chips (FPGAs) as this allows them to have massive processing elements of the chip structurally laid out in silicon to execute very effeciently with minimal latency proprietory methods in the initial D to A conversion, subsequent filtering, noise shaping and output processes. In other words the processes determine the architecture, whereas with off-the-shelf chips, the processes have to be built around the fixed architecture of a chip that can not be modified.
Noise is a side effect of A to D and D to A processing. Oversampling, noise shaping and the type of digital filter used to remove the unwanted extra information that is introduced with digital conversion needs to be minimized. FPGA chips gives the designer more flexibility with regards to the extent of the efforts made to purify the analog output signal. Power supplies and quality of the final output stage are important to sound quality; not just the conversion itself.
It's not too hard to appreciate the difference in sound quality of a modern DAC compared to an older one. Bass is far better defined and high frequencies are sweeter and more delicate. Instruments with strong energy transients, such as drums and pianos, sound more natural with greater dynamic impact and rhythms are more intentionally defined. The sound stage is better organized with greater separation, depth, space and layering. There is less of a gap between the end of one track and the start of another because decays are heard for longer while complex passages with a lot happening sound less homogenized.
Higher resolution recordings are more easily handled offering more of everything with less penalty and a more natural sound. The art of microphone placement and the talents of the recording and mastering engineers are still appreciated in the better recordings that not only have clarity and balance but also a dynamic range that can be comfortably reproduced in domestic listening environments and according to the loudness contours of our hearing apparatus. Nevertheless the better recording technolgy and mastering tools can be heard with a good system.
For a given level of performance, the cost of DACs has come down considerably. However new developments and understanding of how to get a more analog-like digital component means there is still a steady stream of new products. kemela maintains close contact with manufacturers as new products are released. Reviews usually don't appear for some months later. Many great products don't get a review or the review may be so late that the product is at the end of it's life cycle. Fortunately some manufacturers design products so that they may be upgraded as new technology appears. This is a valuable feature with DACs as they become more obsolete and harder to sell used than other HiFi components.