A turbocharger or supercharger is used to increase the volume of air in the engine cylinder by compressing the air above atmospheric pressure. More air in a cylinder means more oxygen molecules available for combustion, which means more fuel can be completely burned, giving greater power output.
However, when air is compressed, it heats up, which causes the volume of the gas to increase, and that lowers the air density. Hot air under pressure in a cylinder contains fewer oxygen molecules than cooler air at the same pressure in the same volume.
The purpose of an intercooler is to reduce the intake air temperature up to 390 degrees Fahrenheit, or 200 degrees Celsius, before it enters the intake manifold. This increases the density of the pressurized air and improves engine efficiency.
The intercooler works at its most efficient when the turbo boost exceeds 15lbs or 100Kpa. At lower pressures, there are still enough oxygen molecules in the air to provide for complete combustion of the air/fuel mixture.
Most intercoolers operate on an air-to-air principle, by feeding compressed air from the turbocharger through the intercooler and into the intake manifold. The intercooler works like a radiator. Inside it, the air passes through small tubes with thin fins attached. The heated compressed air flowing through the intercooler heats up the fins and the tubes, and as the vehicle moves forward, the cool outside air flowing across the fins pulls heat away from the tubes and fins. This heat transfer occurs constantly during engine operation.
Some larger engine applications have a liquid operated intercooler. In this system the air is fed through small tubes in a heat exchanger, and the vehicle coolant absorbs the heat and transfers it to the engine cooling system.