It’s not the heat itself, exactly. As long as the temperature isn’t high enough to cause physical damage to the processor, the processing speed isn’t affected. The problem is that if the cpu is getting hotter and hotter, and the cooling system can’t compensate (e.g. by spinning the fans harder), then at some point the only way to stop it from getting dangerously hot is to reduce how hard the cpu is working. And that’s exactly what happens: the cpu gets slowed down in order to prevent damage from overheating. This is called “throttling”.
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