When an amplifier becomes non-linear it will begin to produce harmonics of the amplified inputs. The second, third and higher harmonics are usually outside of the amplifier bandwidth, so they are usually easy to filter out if they are a problem. However, non-linearity will also produce a mixing effect of two or more signals. If the signals are close together in frequency, some of the sum and difference frequencies called intermodulation products produced can occur within the bandwidth of the amplifier. These cannot be filtered out, so they will ultimately become interfering signals to the main signals to be amplified.
That’s why every effort must be made to control the biasing, signal levels and other factors to ensure maximum possible linearity, greatly reducing the intermodulation distortion (IMD) products. The 1-dB compression point is important since it shows you the input power point where compression begins and distortion will occur.
Amplifiers should be operated below the compression point. Third-order products are the most troublesome of the intermodulation effects caused by non-linear operation. The IP3 value is an imaginary point that indicates when the amplitude of the third-order products equals the input signals. This point is never reached, as the amplifier will saturate before this condition can occur. Nevertheless, it is a good indicator of amplifier linearity.