In an op amp, the voltage output of the amp can never exceed its rail voltages (the Vcc and Vee) of the component. Effectively, the rail voltages can then be thought of as the maximum and minimum voltages the op amp can output. Any output signal that tries to exceed the max and min bounds is clipped at a voltage slightly less than the rail voltage. This clipping is called saturation.

Figure 1. Saturation example.

If you were to look at voltage over time of an output signal (like in Fig. 1), you would see the output of the signal (in green) levels out when it approaches one of the rail voltages. The output signal should be a sine wave, but op amp saturation causes the peaks of the signal to be clipped. Likewise, if the output signal tried to go below the voltage level of Vee it would be clipped as well.

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