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It was only with the development of the low cost integrated circuit that the Hall effect sensor became suitable for mass application. Many devices now sold as "Hall effect sensors" are in fact a device containing both the sensor described above and a high gain integrated circuit (IC) amplifier in a single package. Recent advances have resulted in the addition of ADC (Analog to Digital) converters and IC (Inter-integrated circuit communication protocol) IC for direct connection to a microcontroller's I/O port being integrated into a single package. Reed switch electrical motors using the hall effect IC is another application.
Its use as an ignition timing device in various distributor types is as follows. A stationary permanent magnet and semiconductor Hall effect chip are mounted next to each other separated by an air gap, forming the Hall effect sensor. A metal rotor consisting of windows and tabs is mounted to a shaft and arranged so that during shaft rotation, the windows and tabs pass through the air gap between the permanent magnet and semiconductor Hall chip. This effectively shields and exposes the Hall chip to the permanent magnet's field respective to whether a tab or window is passing though the Hall sensor. For ignition timing purposes, the metal rotor will have a number of equal-sized tabs and windows matching the number of engine cylinders. This produces a uniform square wave output since the on/off (shielding and exposure) time is equal. This signal is used by the engine computer or ECU to control ignition timing. It is worth noting that many automotive Hall effect sensors have a built-in internal NPN transistor with an open collector and grounded emitter, meaning that rather than a voltage being produced at the Hall sensor signal output wire, the transistor is turned on providing a circuit to ground though the signal output wire.
Source: Wikipedia > Hall Effect
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