A voltage regulator module or VRM, sometimes called PPM (processor power module), is a buck converter that provides a microprocessor the appropriate supply voltage, converting +5 V or +12 V to a much smaller voltage required by the CPU. Some are soldered to the motherboard while others are installed in an open slot. It allows processors with different supply voltage to be mounted on the same motherboard. Most modern CPUs require less than 1.5 volts. CPU designers tend to design to smaller CPU core voltages; lower voltages help reduce CPU power dissipation, often referred to as TDP or Thermal Design Power
Some voltage regulators provide a fixed supply voltage to the processor, but most of them sense the required supply voltage from the processor, essentially acting as a continuously-variable resistor. In particular, VRMs that are soldered to the motherboard are supposed to do the sensing, according to the Intel specification.
The correct supply voltage is communicated by the microprocessor to the VRM at startup via a number of bits called VID (voltage identificator). In particular, the VRM initially provides a standard supply voltage to the VID logic, which is the part of the processor whose only aim is to then send the VID to the VRM. When the VRM has received the VID identifying the required supply voltage, it starts acting as a voltage regulator, providing the required constant voltage supply to the processor.
Modern GPUs also use VRM due to a need of more power and high current.